Shares in Ashtead (LON:AHT) have jumped in London this morning as the rental company updated investors on its interim performance, lifting its full-year outlook and unveiling plans to return cash to shareholders. The group further announced that its chairman was planning to step down next year.
As of 09:32 GMT, Ashtead’s share price had added 3.98 percent to 2,099.36p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.09 percent higher at 7,459.86 points. The group’s shares have added more than three percent to their value this year, as compared with more than a seven-percent rise in the Footsie.
Ashtead updated investors on its interim performance today, reporting that its rental revenue had climbed 20 percent in the six months to October 31, while its operating profit came in 21 percent higher. The group further recorded £38 million of free cash flow generation, as compared with an outflow of £20 million in the prior-year period.
“We continue to enjoy support from good end markets, a strong balance sheet and impressive operational execution,” the company said in the statement, adding that while it “would anticipate that activity levels would normalise during the second half, post hurricane clean-up, we expect full year results to be ahead of our prior expectations”.
Ashtead also hiked its payout to shareholders by 16 percent to 5.5p per share, and announced that it was starting a share buy-back programme of at least £500 million and up to £1 billion over the next 18 months.
Chairman to step down
Ashtead said in a separate statement that Chris Cole who has been group Chairman since 2007, had unveiled plans to step down next year. The group noted that a process to recruit a new chairman was starting, “with the aim of affecting an orderly handover at the Annual General Meeting in September 2018”.