Sunbelt in US drives Ashtead ahead in first half

10th Dec 2013 08:24

- H1 PBT up 49 per cent- Sunbelt in US is main driver- FY guidance towards upper end of expectationsContinued powerful growth from the US building sector drove record first-half results at equipment rental group Ashtead.The FTSE 250 group grew pre-tax profits 49% to £212m in constant currencies on revenues up 23% to £439.2m in the six months to October 31st, driven by 21% growth from US arm Sunbelt in the second quarter. With earnings per share up 44% to 14.3p per share, or 52% on an underlying basis, analysts consensus forecasts were beaten by 6%. Chief Executive Geoff Drabble said the strong performance continued into November and with this continuing momentum in the business he now anticipated a full year profit towards the upper end of current expectations."Activity on the ground and lead indicators remain very healthy and, as a result, we have increased our full year capital guidance to £700m to support our customers during an anticipated strong spring of 2014," he said.The record profits in the first half came as good momentum in the first half continuing through the second quarter, with Sunbelt in the US was again the main driver of growth, although A-Plant in the UK delivered a strong performance. Drabble explained that strategy continued to be focused largely on organic growth, supplemented by a range of bolt-on acquisitions.Ashtead invested £61m on acquisitions during the first half and a net £401m in its fleet, especially during the seasonally stronger summer months. Management expect to a net capital expenditure for the full year of £600m as a result of the good market conditions.Despite this spending, robust margins allowed the company to reduce leverage from 2.4 to 2.1 times earnings before interest, tax, depreciation and amortisation. The interim dividend was raised 50% to 2.25p per share.Shares in Ashtead were up 2.03% to 728p at 09:05 on Tuesday.OH