Ashtead lifts profit by 25% in Q1

Ashtead continues to sparkle as latest financial figures show that a company from over here (the plant hire group’s UK operations trade as A-Plant) is doing rather well over there (trading in the USA under the Sunbelt brand name).

Figures released this morning cover the first quarter of Ashtead’s financial year – the three months to 31 July 2008.

They give two reasons to smile:

• Pre-tax profit was higher at £35m – representing a rise of £7m.
• Turnover was also ahead at £260m – up from £250m in the same period in the previous year.

Geoff Drabble, chief executive, said: “In the US we delivered profit growth as we benefited from improvements in operational performance. We improved utilisation on a larger fleet and continue to benefit from our broad geographic and market exposure.

“We performed well in the UK, underpinned by our exposure to the larger non-residential projects.

“Despite the economic uncertainty, our operating businesses continue to perform well and our financing costs continue to be lower than last year as we reduce debt.”

The sale of Ashtead Technology in June for £96m generated net cash of £90m. The money was used to pay down debt. The sale price triggered an exceptional profit of £67m.

During the three months, Ashtead repurchased 20m company shares at an average price per share of 67p.

The value of Ashtead’s property, plant and equipment stands at £1.2bn.

Capital expenditure in the quarter ran to £109m with £97m of this sum being spent on the rental fleet while plant disposals recouped £15m of this.

The average age of Ashtead’s rental fleet is 31 months (comparable figure a year ago: 29 months).

In the full financial year, Ashtead expects to run up a capital spend of £230m which will predominantly be replacement expenditure.

Net debt at 31 July stood at £850m and during the second quarter it is expected that the usual seasonal increase will take this figure higher.

Segmental analysis shows:

Sunbelt – the US operation

• £204m turnover
• £46m operating profit

A-plant – the UK operation

• £55m turnover
• £7m operating profit