16 June, 2015

Audited results for the year and unaudited results for the fourth quarter ended 30 April 2015

Read and download the audited results for the year and unaudited results for the fourth quarter ended 30 April 2015. You can also view the latest webcast

Financial summary

 Fourth quarterYear
Underlying results2      
Rental Revenue479.1355.724%1,837.61,475.324%
Operating profit129.582.641%556.9409.236%
Profit before taxation110.269.442%489.6362.135%
Earnings per share14.2p9.8p29%62.6p46.6p34%
Statutory results      
Profit before taxation104.770.832%473.8356.533%
Earnings per share13.4p10.3p17%60.5p46.1p31%

1   at constant exchange rates
2   before intangible amortisation


  • Group rental revenue up 24%1
  • Record Group pre-tax profit2 of £490m, up 35% at constant exchange rates
  • £1bn invested in the rental fleet (2014: £657m)
  • £236m spent on bolt-on acquisitions (2014: £103m)
  • Net debt to EBITDA leverage1 of 1.8 times (2014: 1.8 times)
  • Group RoI of 19% (2014: 19%)
  • Proposed final dividend of 12.25p, making 15.25p for the full year, up 33% (2014: 11.5p)

Ashtead’s Chief Executive, Geoff Drabble , commented:

"2014/15 was another very successful year for Ashtead. The consistent execution of our well-established strategy focused on organic growth supplemented by bolt-on acquisitions has delivered both excellent financial results and significantly enhanced our geographic footprint and the breadth of the markets we serve.

Our financial performance speaks for itself with Sunbelt and A-Plant achieving rental revenue growth of 25% and 19% respectively. Underlying Group pre-tax profit rose 35% to £490m and we generated a strong return on investment of 19%.

We invested £1bn in the rental fleet and £236m on bolt-on acquisitions during the year. We expect to again invest around £1bn in capital expenditure in the coming year and we will continue to open greenfield locations and make bolt-on acquisitions to further broaden our market exposure. This growth will, as always, be undertaken responsibly and we will maintain our leverage at, or below, two times EBITDA.

Our markets continue to provide both structural and cyclical opportunity. The business model established over recent years has a track record of exploiting these opportunities and we are supported by a strong balance sheet. Therefore the Board looks forward to the medium term with confidence."


Geoff DrabbleChief executive+44 (0)20 7726 9700
Suzanne WoodFinance director+44 (0)20 7726 9700
Will ShawDirector of Investor Relations+44 (0)20 7726 9700
Becky MitchellMaitland+44 (0)20 7379 5151
Tom EckersleyMaitland+44 (0)20 7379 5151


Geoff Drabble and Suzanne Wood will hold a meeting for equity analysts to discuss the results and outlook at 9.30am on Tuesday, 16 June 2015 at The London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS. The meeting will be webcast live via the link at the top of this release and a replay will also be available via the same link shortly after the call concludes. A copy of this announcement and the slide presentation used for the meeting will also be available for download at the top of this release. The usual conference call for bondholders will begin at 3pm (10am EST).

Analysts and bondholders have already been invited to participate in the analyst call and conference call for bondholders but any eligible person not having received dial-in details should contact the Company's PR advisers, Maitland (Astrid Wright) at +44 (0)20 7379 5151.

Forward looking statements

This announcement contains forward looking statements. These have been made by the directors in good faith using information available up to the date on which they approved this report. The directors can give no assurance that these expectations will prove to be correct. Due to the inherent uncertainties, including both business and economic risk factors underlying such forward looking statements, actual results may differ materially from those expressed or implied by these forward looking statements. Except as required by law or regulation, the directors undertake no obligation to update any forward looking statements whether as a result of new information, future events or otherwise.

Trading results

 RevenueEBITDAOperating profit
Sunbelt in $m2,742.32,188.51,293.2987.6832.6631.1
Sunbelt in £m1,715.91,366.2809.2616.5520.9394.0
Group central costs   -   -(10.3)(10.0)(10.3)(10.0)
Net financing costs    (67.3)(47.1)
Profit before exceptionals, amortisation and tax489.6362.1
Exceptional items       -4.2
Amortisation    (15.8)(9.8)
Profit before taxation    473.8356.5
Taxation    (170.4)(125.3)
Profit attributable to equity holders of the Company303.4231.2
Sunbelt  47.2%45.1%30.4%28.8%
A-Plant  33.9%29.3%14.3%9.4%
Group  44.6%41.9%27.3%25.0%

Group revenue for the year increased 25% to £2,039m (2014: £1,635m) with strong growth in both Sunbelt and A-Plant. This revenue growth, combined with ongoing operational efficiency, generated record underlying profit before tax of £490m (2014: £362m).

The Group's growth is driven by strong same-store growth supplemented by greenfield openings and bolt-on acquisitions. In the US this growth is across a range of market sectors. The dynamics of same store growth and that through greenfields and bolt-ons are different, which is impacting a number of Sunbelt's metrics in the short term. To aid the understanding of our performance, we have analysed Sunbelt's year on year revenue growth as follows:

2014 rental only revenue 1,530
Same stores (in existence at 1 May 2013)17%247
Bolt-ons and greenfields since 1 May 201310%158
2015 rental only revenue27%1,935
Ancillary revenue22%540
2015 rental revenue25%2,475
Sales revenue 267
2015 total revenue 2,742

We continue to capitalise on the opportunity presented by our markets which were up circa 7% last year and are forecast to grow around 8% this year. Our same-store growth of 17% demonstrates that we continue to take market share as we grow at more than double the market rate. In addition, bolt-ons and greenfields have contributed another 10% growth as we execute our long-term structural growth strategy of expanding our geographic footprint and our specialty businesses. Our specialty businesses accounted for 25% of Sunbelt's revenue in 2014/15.

Total rental only revenue growth of 27% can be broken down to a 24% increase in fleet on rent and a net 2% improvement in yield. The improved yield reflects the combination of good rate growth, the drag of greenfield and bolt-on activity as we capitalise on market opportunities and the negative impact of mix which we highlighted in previous quarters. Average physical utilisation for the year was 70% (2014: 71%).

A-Plant continues to perform well as it executes on its strategy to broaden its markets and delivered rental only revenue of £238m, up 21% on the prior year (2014: £197m). This reflects 13% more fleet on rent and a 7% improvement in yield. Yield has benefitted from an improved pricing environment and the diversification of the product line. Total rental revenue increased 19% to £289m (2014: £244m).

Sunbelt's strong revenue growth and focus on operational efficiency is driving improving margins resulting in an EBITDA margin of 47% (2014: 45%) as 58% of revenue growth dropped through to EBITDA. Drop through reflects the drag effect of greenfield openings and acquisitions. Stores open for more than one year saw 67% of revenue growth drop through to EBITDA. This contributed to an operating profit up 32% at $833m (2014: $631m). A-Plant's EBITDA margin improved to 34% (2014: 29%) and operating profit rose to £46m (2014: £25m), with drop through of 56%. As a result, Group underlying operating profit increased 36% to £557m (2014: £409m).

Net financing costs increased to £67m (2014: £47m), reflecting the higher average debt during the period and the higher cost of the additional $400m of senior secured notes issued in December 2013 and the $500m senior secured notes issued in September 2014.

Group profit before amortisation of intangibles and taxation was £490m (2014: £362m). After a tax charge of 36% (2014: 36%) of the underlying pre-tax profit, underlying earnings per share increased 34% to 62.6p (2014: 46.6p). Following the introduction of accelerated tax depreciation by the US government for 2014, we do not become a significant cash tax payer in the US until 2015/16. As a result, the cash tax charge for the year was 4%.

Statutory profit before tax was £474m (2014: £357m) and basic earnings per share were 60.5p (2014: 46.1p).

Capital expenditure and acquisitions

Capital expenditure for the year was £1,063m gross and £942m net of disposal proceeds (2014: £741m gross and £642m net). Investment in the Group's rental fleet was £979m, resulting in a fleet cost at 30 April 2015 of £3.6bn. Our average fleet age is now 26 months (2014: 28 months).

We spent £236m (2014: £103m) on 21 bolt-on acquisitions during the period as we continue to both expand our footprint and our specialty businesses. The long-term objective of this strategy is to ensure we are not too dependent on any one market. The benefits of this have been demonstrated in recent months when oil and gas markets have suffered.

Our current expectation for 2015/16 is that the percentage growth in our rental fleet will be in the mid teens with capital expenditure around £1bn. This level of expenditure is consistent with our strategy at this stage in the cycle of investing in organic growth, opening greenfield sites and continuing to reduce our leverage. As always, our capital expenditure plans remain flexible depending on market conditions and currently, our principal focus is on fleet deliveries through the first quarter of fiscal 2016.


Return on Investment1

Sunbelt's pre-tax return on investment (excluding goodwill and intangible assets) in the 12 months to 30 April 2015 was 26% (2014: 26%), well ahead of the Group's pre-tax weighted average cost of capital. In the UK, return on investment (excluding goodwill and intangible assets) improved to 13% (2014: 9%), which is now ahead of the Group's cost of capital. For the Group as a whole, returns (including goodwill and intangible assets) are 19% (2014: 19%).

1   Underlying operating profit divided by the sum of net tangible and intangible fixed assets, plus net working capital but excluding net debt and deferred tax.


Cash flow and net debt

As expected, debt increased during the year as we invested in the fleet, made an increased number of bolt-on acquisitions and due to increased working capital to support the growth in the business.

Net debt at 30 April 2015 was £1,687m (2014: £1,149m) while, reflecting our strong earnings growth, the ratio of net debt to EBITDA remained constant at 1.8 times (2014: 1.8 times) on a constant currency basis.

The Group's debt package remains well structured and flexible, enabling us to take advantage of prevailing end market conditions. Following the issue of the $500m 5.625% senior secured notes due in 2024, the Group's debt facilities are committed for an average of six years. At 30 April 2015, ABL excess availability was $756m, with an additional $1,741m of suppressed availability - substantially above the $200m level at which the Group's entire debt package is covenant free.



In accordance with our progressive dividend policy, with consideration to both profitability and cash generation at a level that is sustainable across the cycle, the Board is recommending a final dividend of 12.25p per share (2014: 9.25p) making 15.25p for the year (2014: 11.5p). If approved at the forthcoming Annual General Meeting, the final dividend will be paid on 4 September 2015 to shareholders on the register on 14 August 2015.


Current trading and outlook

Our strong performance continued in May. Our markets continue to provide both structural and cyclical opportunity. The business model established over recent years has a track record of exploiting these opportunities and we are supported by a strong balance sheet. Therefore the Board looks forward to the medium term with confidence.


Directors' responsibility statement on the annual report

The responsibility statement below has been prepared in connection with the Company's Annual Report & Accounts for the year ended 30 April 2015. Certain parts thereof are not included in this announcement.

"We confirm to the best of our knowledge:

  1. the consolidated financial statements, prepared in accordance with IFRS as issued by the International Accounting Standards Board and IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; 
  2. the Strategic Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces; and 
  3. the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide information necessary for shareholders to assess the Group's performance, business model and strategy. 

By order of the Board

Eric Watkins
Company secretary
15 June 2015"