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City News: Set fair for 2007 Catherine Stratton considers the latest results from Ashtead and Hire Station. Leading hire shares have found increasing favour with investors as we move into the New Year. Speedy hit a new ‘high’ of 1229p on 3 January and Aggreko reached 455.75p two days later. The latter is now capitalised in excess of £1.2 billion, while Speedy is valued at £560m. These new ‘highs’ compare with ‘lows’ over the past twelve months of 235p for Aggreko in June and 790p for Speedy a month earlier. Ashtead’s latest figures show the company continuing to grow well across all its divisions. The bottom line figures are much affected by the costs attached to its bold acquisition of NationsRent, completed at the end of August, which has turned Ashtead’s US subsidiary Sunbelt into the second largest player in that expanding marketplace. In the two months to the end of October NationsRent contributed £58.9m to Group revenues. Segmental analysis In the UK, A-Plant continues to grow in both revenue and profitability; revenues were up nearly 15%, well ahead of the overall market (c. 3.5%). The A-Plant fleet is 5% larger than a year ago and, this coupled with higher levels of utilisation (69% against 65% a year ago) and the stability of hire rates, has led to the acceleration in growth. October saw A-Plant’s first major acquisition for seven years (that of Lux Traffic Controls) and the company states it expects to invest in both organic growth and selected areas of the market where good returns are foreseen. Commenting on the outlook for Ashtead Group as a whole, the new Chief Executive Geoff Drabble states, “ongoing favourable market conditions, supported in the US by the continuing shift from ownership to rental, allow the Board to view the second half with confidence.” The very strong recovery in profitability at Hire Station was a major factor in Vp’s 42% uplift in interim pre-tax profits; of Vp’s seven divisional operations, the tool hirer was the second largest contributor to profits; Groundforce continues to be the largest with operating profits of £2.75m (2005: £2.55m). Vp Chairman Jeremy Pilkington summed up the outlook for the Group: “Overall the markets we serve are in good health with strong growth prospects over the short to medium term and we enjoy the human and financial resources to take advantage of expansion opportunities as they arise. Our strategy remains to lead in our chosen markets.” • • We understand that Longville (parent company of SLD Pumps and Chiller Rental Services) has been acquired by the US company Carrier which is part of United Technologies Corporation. Executive Hire News › Archives › Jan/Feb 2007 › City News › Set fair for 2007
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