US building recovery to boost Ashtead and Wolseley, says broker

24th Sep 2014 17:38

Builders merchant Wolseley and plant hire group Ashtead are set to benefit from a bounceback in the US construction market, according to broker Brewin Dolphin. The broker said that while the non-housing construction recovery had taken longer than expected to occur, indications were now looking more positive with US construction spending up 1.8% month-on-month in July and private construction hitting its highest since 2008.Ashtead, which owns A-Plant, believes it is now clearly seeing signs of early recovery with its end markets up 8% year-on-year and management predicts four or five years of steady growth ahead, Brewin Dolphin said.Wolseley, which announces annual results on 30 September, continues to generate a lot of cash and management is expected to expand the business internally by opening branches and gaining market share rather than making significant acquisitions."With gross margins remaining steady, and the careful control of costs a key part of the strategy, Wolseley should be geared into any recovery in worldwide building conditions," Brewin Dolphin said.