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.
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 Bedford Park Opportunities Fund returned 13.5% net of all fees and expenses in the second quarter of 2021, bringing its year-to-date return to 27.6%. Q2 2021 hedge fund letters, conferences and more In the fund's second-quarter investor letter, which ValueWalk has been able to review, Jordan Zinberg, the President and CEO of Bedford Read More
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.”
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