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Ashtead posts solid full-year revenue growth
Equipment rental company Ashtead posted a 20% improvement in revenue in its final results on Tuesday to £3.71bn, with rental revenue rising 21% to £3.42bn.
The FTSE 100 firm said its pre-tax profit was £927m in the year to 30 April, up from £793m a year earlier, with earnings per share 26% higher at 127.5p.
Its post-tax profit was £969m, almost double the £501m it reported in the 2017 financial year.
A total of £1.2bn in capital was invested in the business during the year, up from £1.1bn, with £386m of free cash flow generation, rising from £319m.
Ashtead spent £392m on bolt-on acquisitions during the period, which was less than the £437m outlay it reported 12 months earlier.
Net debt-to-EBITDA leverage was 1.6x, comparable to the 1.7x from the prior results.
The board proposed a final dividend of 27.5p, making total distributions of 33.0p for the full year, which was a year-on-year improvement of 20% from 27.5p in 2017.
"I am delighted to be able to report another very successful year for Ashtead with rental revenue increasing 21% and underlying pre-tax profit increasing 21% to £927m, both at constant exchange rates," noted chief executive Geoff Drabble.
"Our end markets remain strong and are supported by the continued structural changes in our market as customers rely increasingly on rental while we leverage the benefits of scale.
"We continue to execute well on our strategy through a combination of organic growth and bolt-on acquisitions, investing £1.2bn by way of capital expenditure and £392m on bolt-on acquisitions in the year."
Drabble said the company's "strong" margins and lower replacement capital expenditure were delivering good earnings growth and significant free cash flow generation.
"This provides us with significant operational and financial flexibility, enabling us to invest in the long-term structural growth opportunity and enhance returns to shareholders while maintaining leverage within our target range of 1.5 to 2.0 times net debt to EBITDA.
"We have spent £200m under the share buyback programme announced in December."
All of the firm's divisions were continuing to perform "well" in supportive end markets, Drabble explained.
"Looking forward, we anticipate a similar level of capital expenditure in 2018/19 consistent with our strategic plan.
"So, with all divisions performing well and a strong balance sheet to support our plans, the board continues to look to the medium term with confidence."