Ashtead Group announces record annual profits

20th Jun 2013 07:24

Equipment rental company Ashtead Group reported a record year of pre-tax profit, bolstered by revenue growth, operational efficiency and lower financing costs.Pre-tax profit for the year to end of April was £50.3m, up 65% from the previous year's £31.9m.Revenue grew 20% to £1.3bn from £1.1bn, driven by the strong performance of its US construction and industrial equipment rental division, Sunbelt, which saw revenue climb 21% to $1.8bn from $1.5bn.During the period, the company invested £580m in capital expenditure, of which £521m was rental fleet and the balance for delivery vehicles, property improvements and IT."We are delighted to report another excellent set of results with key financial and non-financial metrics at record levels," said Chief Executive, Geoff Drabble."Our largely organic investment strategy has again delivered strong revenue growth together with margin and return on investment improvement."We continue to make significant investment in the business with capital expenditure of £580m in the year and a similar level planned for the coming year. As a result of our strong margins, we are able to support this investment while at the same time continuing to deliver."The group's debt increased, as expected, reflecting expenditure on renewing and growing the fleet. Year-end net debt was £1.0bn compared to £854m last year.Organic growth was broadly self-funded from cash flow with a net free cash outflow of £34m. In addition, £34m was spent on acquisitions, while dividends paid totalled £20m.Net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) leverage reduced to 2.0 times (2012: 2.2 times). The company recommended a final dividend of 6.0p per share, up from 2.5p in 2012, bringing the total for the year to 7.5p, compared to the prior year's 3.5p. Based on the momentum established in the business, upcoming cyclical recovery and a strong balance sheet to support growth opportunities, the firm anticipates profits in the coming year will be ahead of earlier expectations.RD