Ashtead Group (LON:AHT) has updated investors on its first-quarter performance this morning.
Highlights from Ashtead's statement:
Group revenue increased 14% to £707m (2015: £619m) with strong growth in both Sunbelt and A-Plant. As expected, Group revenue reflects a lower level of used equipment sales due to lower replacement capital expenditure, broadly offset by the benefit from weaker sterling. This revenue growth, combined with ongoing operational efficiency and strong drop-through, generated underlying profit before tax of £184m (2015: £161m).
Ashtead's chief executive, Geoff Drabble, commented:
"The Group delivered a strong quarter with rental revenue increasing 12% and underlying pre-tax profit of £184m. The underlying performance of the business continues to benefit from a clear and consistent strategy of organic growth supplemented by bolt-on acquisitions. In the quarter, the reported results were positively impacted by weaker sterling (£17m) but this was broadly balanced by the impact of lower gains on fleet disposals (£12m) as we reduced our replacement capital expenditure.
The continued improvement in our margins is particularly encouraging - with Group EBITDA now a record 48% (2016: 46%). These healthy margins and our strong balance sheet provide flexibility to continue to invest in our long-term structural growth opportunity and enhance returns to shareholders.
We will continue to grow responsibly, adhering to the capital allocation priorities we have outlined. We have therefore invested £328m by way of capital expenditure and a further £64m on bolt-on acquisitions. In addition, we spent £17m under the share buyback programme and all of this was achieved whilst maintaining leverage well within our stated range of 1.5 to 2.0 times net debt to EBITDA.
Both divisions are performing well, our end markets are strong and with the benefit of weaker sterling, we expect full year results to be ahead of our expectations and the Board continues to look to the medium term with confidence."
Current trading and outlook
Both divisions are performing well, our end markets are strong and with the benefit of weaker sterling, we expect full year results to be ahead of our expectations and the Board continues to look to the medium term with confidence.