Ashtead sees significant growth

UK-based Ashtead Group has announced a 20% year-on-year increase in its group rental revenues for the first half of 2017. The company has also promoted Brendan Horgan to group chief operating officer, who will begin his role on 1 January 2018.

Ashtead’s half-year rental revenues were £1.77 billion (€2 billion) for the period, up from £1.44 billion (€1.63 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) also grew 20% for the company during the first six months, to £933.7 million (€1.1 billion), up from £757.4 million (€858 million).

The company operates two main division – A-Plant in the UK, and Sunbelt in the US. It also operates Sunbelt in Canada.

Its biggest division, Sunbelt in the US, saw its revenues grow 20% to £1.6 billion (€1.81 billion), while its EBITDA grew to £826.2 million (€935.8 million), from £680.1 million (€770.3 million) – an increase of 21.5%.

In July, Sunbelt acquired Contractors Rental Supply (CRS) for an initial cash consideration of C$275 million (€182 million) with an additional earn out of up to C$20 million (€13.2 million) dependant on future performance. It also purchased Pride Equipment Corporation in a deal worth US$279 million (€261.6 million), in April.

A-Plant, meanwhile, recorded half-year revenues of £245.1 million (€277.6 million), which represents an increase of 23% year-on-year. A-Plant’s EBITDA also increased 21.6% year-on-year, to £92.7 million (€105 million).

The company’s Sunbelt operations in Canada saw a revenues increase of 164% year-on-year for the first six months, to £54.4 million (€61.6 million), while its EBITDA was £22.1 million (€25 million), showing an increase of 160%.

Speaking after the company’s results were published, Geoff Drabble, Ashtead’s CEO, said, “Our end markets remain strong and a wide range of metrics have shown consistent improvement. We continue to execute well on our strategy through a combination of organic growth and bolt-on acquisitions.

“We made significant investments in the period, spending £708 million (€802 million) on capital expenditure and £298 million (€337.5 million) on nine acquisitions. Our strong margins ensured that, despite these levels of investment, we remain comfortably within our target range for net debt to EBITDA of 1.5 to 2 times.”

Drabble added that the company would continue to invest at the upper end of its leverage range over the next five years. He said that the company would also begin a share buyback programme of at least £500 million (€566.3 million) and up to £1 billion (€1.13 billion) over the next 18 months.

Personnel changes

Meanwhile, Ashtead has announced that Brendan Horgan is to be promoted to group chief operating officer, and will begin his role on 1 January 2018.

Horgan joined Ashtead in 1996 and was appoint CEO of Sunbelt and to the Ashtead board in January 2011. Going forward, Horgan will retain his day-to-day responsibilities for Sunbelt and will work alongside Geoff Drabble on the operational strategic development of the wider group.

The company has also announced that Chris Cole, chairman of Ashtead since 2007, has notified the board of his intention to retire from the company next year. The company said the process to replace Cole had begun, and a handover will take place at its annual general meeting in September next year.

Drabble said, “I would like to congratulate Brendan on his well-deserved promotion to group chief operating officer. I look forward to working with him on the on-going delivery of our successful strategy to grow the group through a combination of organic growth and acquisitions.

“There will be plenty of time next year to thank Chris for his significant contribution to the board and to the group over a number of years and for overseeing what has been a period of significant progress for the business as we have grown into one of the largest and most successful rental companies in the world.”