Ashtead – Accelerating Into 2022 As Recovery Gathers Pace
Ashtead Group plc (LON:AHT) reported fourth quarter revenue of £1.3bn, up 23% on last year at constant exchange rates. Full year revenue came in at $5.0bn, up 3% year-on-year. Full year operating profits fell 3% to £1.1bn, although lower interest and tax expenses meant underlying earnings per share fell just 1% to 166.0p.
Get The Full Ray Dalio Series in PDF
Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues
Q1 2021 hedge fund letters, conferences and more
The group proposed a final dividend of 35.0p, taking the full year total to 42.15p per share, up 3.7% year-on-year.
The shares were broadly flat in early trading.
Acceleration In Ashtead's Performance
Nicholas Hyett, Equity Analyst at Hargreaves Lansdown:
“Ashtead’s performance accelerated into the year end, with the amount of equipment on rent accelerating over the fourth quarter. That bodes well for 2022, especially as large government infrastructure development plans have yet to get underway, providing a supportive backdrop to the wider construction sector that Ashtead supplies.
However, the real stand out feature of full year results is how flexible Ashtead has proven, despite a relatively fixed operating cost base and deciding not to make any staff redundant. In particular delaying the replacement of old equipment has boosted free cash flow substantially, allowing the group to trim debt while still making extra acquisitions this year.
The improved balance sheet also underpins the recently announced £1bn buyback. However, while we always welcome shareholder returns from genuinely financially strong businesses we do wonder whether buybacks are really the best way to go at the moment. The shares currently trade on a PE ratio they have rarely touched in in the past, and using surplus cash to buy back expensive shares is a common route to shareholder value destruction. Still, with a positive market outlook and strong balance sheet, Ashtead deserves to be riding high.”
About Hargreaves Lansdown
Over 1.6 million clients trust us with £132.9 billion (as at 30 April 2021), making us the UK’s largest digital wealth management service. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
The post Ashtead – Accelerating Into 2022 As Recovery Gathers Pace appeared first on ValueWalk.
Source valuewalk