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A-Plant continues to thrive

6 Dec 16 While some listed plant hire companies struggle, A-Plant has reported double-digit percentage growth in half-year revenue and profit.

A-Plant’s rental revenue was up 16% to £152m (2015: £131m) for the six months to 31st October 2016.  But with less equipment being sold out of the fleet in the period, total revenue increased by only 12% to £199m (2015: £178m).

Profit before interest, tax, depreciation and amortisation (Ebitda) was up 11% to £76.2m (2015: £68.9m). Operating profit was up 8% to £37.9m (2015: £35.0m).

Parent company Ashtead Group, which also owns the much larger Sunbelt equipment hire business in the USA, made a first-half pre-tax profit of £413.3m, up 9% on last year’s £331.9m. Group revenue was up 8% to £1,551.7m for the six months.

On 22nd November, after the reporting period, A-Plant acquired certain assets of Hewden Stuart from EY, the administrator, for £29m. [See our previous report here.] It seems further acquisitions can be expected.

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Ashtead chief executive Geoff Drabble said: “The underlying performance of the business continues to benefit from a clear and consistent strategy of organic growth supplemented by bolt-on acquisitions.  In the six months, the reported results were positively impacted by weaker sterling (£53m) but this was partially offset by the impact of lower gains on fleet disposals (£14m) as we reduced our replacement capital expenditure.

“I am pleased with the continued improvement in our margins - group EBITDA margin is now a record 49% (2015: 47%).  These healthy margins and our strong balance sheet provide flexibility to continue to invest in our long-term structural growth opportunity and enhance returns to shareholders.

“We continue to grow responsibly, adhering to the capital allocation priorities we have outlined.  We have therefore invested £683m by way of capital expenditure and a further £142m on bolt-on acquisitions.  With the continuing opportunity for profitable growth, we have increased our full year capital expenditure guidance.”

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