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City News: Good news all round Catherine Stratton considers strong trading results from both A-Plant and Aggreko and finds Speedy in buoyant mood. Aggreko has achieved impressive growth in the first half of the year. This follows a doubling of profits last year. The company reports that all its businesses generated strong revenue growth. North America continues to be an expanding market with revenues up 37% in US dollar terms at $129.3m and trading profit up 141% at $22m. European revenues grew 14% to £58.8m with profits up marginally at £0.5m; here the group expects a much stronger performance in the second half than last year. The International division continues to prosper with revenues up 40% at $63.1m and trading profit up 52% at $13.4m. Chairman Philip Rogerson indicated that the Board expects Aggreko’s performance for the full year to be “ahead of previous expectations”. The shares have recovered well since the Stock Market rout in May and are currently trading at 322p, just 20p below their high in April. Aggreko remains the most highly valued quoted hirer with a market capitalisation of £868m. As we went to press, the company announced a major acquisition, that of GE Energy Rentals for a maximum cash consideration of £111m. We will comment further in our next issue. Ashtead’s first quarter saw the continuation of strong trading at US subsidiary Sunbelt and mounting evidence of the improving performance of A-Plant in the UK. Dollar revenues at Sunbelt were up 25% at $234m and operating profits were up 48% at $57m. Same-store revenues were up 21%. A-Plant saw revenue growth of 13% to nearly £44m in the three months, while operating profits were up by over 25% at £4.5m. The company says that utilisation rates improved from 64% to 69% but that, while rental rates were “broadly similar” to those of the previous quarter, they were 3% down on the first quarter of 2005/2006. The cumulative effect of the restructuring of the A-Plant sales force is clear with the quarter’s 13% upturn in revenues, following the 6% and 8% growth in the third and fourth quarter respectively of 2005/2006. The company has increased its capital expenditure in response, spending £31m in the quarter, compared with £16.9m last year. This has reduced the average age of the fleet to 31 months, compared to 42 months a year ago. Of course, the Ashtead Group business has changed substantially since July; the end of August saw the completion of the NationsRent acquisition (see City News, August). The company states that continuing growth is forecast for non-residential construction in the US, which is its core market there. With its position strengthened by the NationsRent deal, the Ashtead Board “expects the Group to continue to make good progress.” City news digest • At the company AGM in early September Vp chairman Jeremy Pilkington told shareholders that the Board was pleased with “the continuing progress being made in Hire Station and the performance of the significant acquisitions made in the previous financial year.” • Wolseley has recently announced its results for the year ended 31 July 2006; it was another record year for the company with pre-tax profits advancing by 15% to £769m. In the UK, trading profit increased by nearly 10%, mainly as a result of the acquisitions of Brandon and several other companies; Wolseley indicated that all these acquisitions had outperformed expectations. Executive Hire News › Archives › October 2006 › City News › Good news all round
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