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City News: Results season round-up Catherine Stratton reviews the calendar year end results from Brandon, Aggreko and Hewden Stuart, as well as Ashtead’s nine month figures. Recent weeks have seen the announcement of 2005 results from those hire companies with calendar accounting years and also third quarter figures from Ashtead. The overall trend has been very satisfactory and this has been reflected in the strength of the share prices, with all the quoted hire companies hitting new ‘highs’ during March with the exception of Andrews Sykes, which, by contrast, saw its shares hitting a ‘low’ of 90p in the middle of the month. A fortnight before, the company had announced the early retirement of Robert Stephens who had been Chief Executive of the company since January 2000; and the appointment of Paul Wood as Director of Operations. Although our Executive Hire Forum confirms the hot-off-the-press news that Wolseley has acquired the company, Brandon’s 2005 results show its strong performance in the second half of last year, as it began to reap the benefit of its aggressive expansion policy. The first half results had disappointed by showing an 18% rise in turnover but a 19% drop in pre-tax profits, but the Board had signalled clearly that the tide had turned towards the end of the first half and the second six months produced a significant improvement with turnover up by 18% and pre-tax profit by 22% over the same period of 2004. Brandon says that the current year has started well with double-digit like-for-like turnover growth. Brandon Finance Director Chris Sims says that last year’s push for growth has given the company more credibility in terms of national coverage. Aggreko produced some impressive figures as the company clearly benefited from the re-organisation undertaken in 2004. Both its North American and its International (i.e. Middle East, Asia-Pacific and South America) divisions achieved revenue growth in excess of 30%; growth in Europe was more modest at around 8%. Chairman Philip Rogerson reports that the company has entered 2006 ‘with strong momentum’. The performance of Ashtead’s US subsidiary Sunbelt continues to be impressive; it has the advantage of being the fourth largest operator in a fast growing market and it is out-performing most of its leading competitors. In the third quarter of 2005 Sunbelt saw a rise of 22.2% in rental revenues compared with the 14% achieved by market leader United Rentals and 13.0% by RSC, the Atlas Copco subsidiary. A-Plant is still finding growth elusive in the UK, but, in its third quarter (i.e. three months ending January 2006) revenues were up 6% and EBITDA for the period rose from £0.1m to £1.1m, suggesting that the company is building up its recovery. Over the nine month period, the UK operation saw EBITDA advance by 14.7% to £10.0m, on a fleet that was 1% smaller than a year earlier. Nevertheless, A-Plant has also seen a significant expansion in its capital expenditure to maintain and grow the fleet. Expenditure in the nine months rose to £42.7m, compared with £27.2m in the same period of 2005. Last year’s restructuring of the A-Plant sales force has clearly had a positive impact on revenues, which the company says since November have consistently exceeded the prior year. It reports that revenues from its largest customers are continuing to grow and accounted for some 40% of the total in the nine months. Hewden’s basic results for last year suggest little in the way of real growth. The company remains the largest plant and equipment operation in the UK, but current trends suggest that Speedy is catching up fast. Its turnover growth at the half year stage to the end of last September was 21% indicating that revenues for the year just ending are likely to be in the range of £240-£250m. The beginning of 2005 had seen Hewden integrating its plant and tool hire business into ‘one entity, enabling customers to deal with one organisation for all their plant and tool needs’. The company states that revenue from customers using the entire Hewden range grew 21% last year. Last autumn the company announced a £13.8m investment in IT systems to improve the quality of customer information and service and to reduce transaction costs. Grafton Group, the Irish-based builders’ merchants and DIY company, which has tool hire operations in both the UK and Ireland, has also recently announced its 2005 results. It reported a 40% increase in sales to 2.63 billion euro and a 35% advance in operating profits to 215.9 million euro. There was a significant profit rise at its Irish tool hire company Sam Hire due primarily to operating cost reductions. Sam now has 14 branches with three more planned for this year. In the UK, builders’ merchant Buildbase added Hirebase tool and equipment centres to a further eight branches in the course of the year to take it to a total of 23. • Executive Hire News › Archives › April 2006 › City News › Results season round-up
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