Ashtead – Enjoying The Spoils Of A Reopened World

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Ashtead Group plc (LON:AHT)’s first half revenue rose 18% to $3.9bn, with Rental Revenue rising 20% to $3.5bn. Growth was largely weighted to the second quarter, where total revenue rose 15%. Underling pre-tax profit rose 42% to $979m in the half.

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An interim dividend of 12.5 cents per share was announced, up 28%.

The group said this has been a record performance, and now expects full year results to be ahead of management’s previous expectations.

The shares rose 4.1% following the announcement.

Ashtead's Performance

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown:

“Ashtead’s heavy duty industrial rental equipment fell out of favour during the peak of the pandemic, which is why new results look so spritely in comparison. However it’s been achieved, knocking the lid off full year expectations is good going. As the world, and more specifically, industrial work, has started to resume, Ashtead stands to benefit. Plans to build out other revenue streams have merit, but for now, it’s still the traditional equipment rental business that’s bringing home the bacon.

The group’s enjoyed favourable market sentiment over the last few months, boosting the valuation in a big way. While the optimism can be understood, it shouldn’t be forgotten that Ashtead is an operationally leveraged business. As a cyclical company, its fortunes wax and wane with the wider economy too, so all-in, there could be some volatility if there are any unwelcome economic surprises.”

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