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Ashtead profits jump 50% to record high

17 Jun 14 Ashtead Group, the parent company of A-Plant, saw its pre-tax profits leap 50% to £362m last year, a new high for the company.

For the year ending 30 April 2014, rental revenue grew 24% to £1,475.3m, while total group revenue was up 22% to £1,634.7m.

Although most of Ashtead's money is made in the USA through its Sunbelt subsidiary, the much smaller UK operation at A-Plant actually saw the stronger growth last year, albeit helped by the acquisition of Eve Trakway.

Sunbelt revenues were up 18% to £1,366.2m (2013: £1,155.8m) and its operating profits were up 37% to £394.0m (2013: £287.4m). This was driven by a 17% increase in fleet on rent and 4% improvement in yield.

A-Plant’s revenues were £268.5m last year, up 30% on the £207.1m revenues of fiscal 2013. Operating profit of £25.2m was more than double the previous year’s £11.9m. This reflects 21% more fleet on rent and a 9% improvement in yield. Rental revenue growth excluding Eve was 19%, reflecting 10% more fleet on rent and a 9% yield improvement.

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Chief executive Geoff Drabble said: "2013/14 was a very successful year for the group, enabling us to deliver record 12-month underlying pre-tax profits of £362m, up 50% from the prior year.  It is particularly pleasing that we achieved this growth whilst also delivering on our long-stated commitments of return on investment progression, now 19% for the group, and maintaining debt leverage below two-times EBITDA.

“Our performance reflects the benefits of the consistent execution of our strategy focussed largely on organic growth, supplemented by greenfield openings and bolt-on acquisitions.  We invested £741m in our rental fleet and a further £103m on acquisitions during the year.  We anticipate growing our fleet in the coming year in the low to mid teens percent range and will continue to open greenfields and make bolt-ons to further grow our market share and profitability.  Current planning suggests around 50 new locations in the new financial year, another measured step towards our medium term objective of 600 locations.”

He concluded: “With both divisions performing well and beginning to enjoy recovering markets, we are well positioned for further growth and the board looks forward to the medium term with continued confidence."

As a result of investment, the group's rental fleet at 30 April 2014 at cost was £2.6bn with an average age of 28 months (2013: 32 months).

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