CITY
NEWS
A-Plant expects it will continue to gain market share.
POSITIVE SIGNS?
Catherine Stratton sees some cause for optimism in the recent performance of Aggreko and Ashtead.
Share prices amongst the leading hire stocks have rallied somewhat in recent weeks. Aggreko hit a new ‘high’ of 1259p in early April, reflecting the strength of its 2009 results and its continuing success in securing contracts. Over the past couple of months, it has announced the signing of a two-year contract to provide temporary power to the Cote d’Ivoire, worth approximately €35m and it has also secured, with its joint venture partner Shanduka Group, a contract to supply temporary power for broadcast and technical services at the 2010 FIFA World Cup in South Africa. Aggreko remains a Stock Market favourite and its market capitalisation of over £3 billion dwarfs the current valuations placed on the other UK quoted hire companies by an enormous margin.
Ashtead also saw its shares hit a new 52-week high in early April when they reached 104p, capitalising the company at over £500m. Group Chief Executive Geoff Drabble claims that the company’s operational performance has been “good relative to both our UK and US peers” and that the company is “clearly gaining market share”. Ashtead reports “encouraging signs” in the third quarter when rental revenues in the US and the UK were down by 22% and 19% respectively.
Ashtead expects market conditions to remain difficult throughout this year but states that lead indicators are showing that the US cycle is at, or close to, the bottom. The company adds that the recovery in the UK is likely to lag behind that in the US, but it anticipates that A-Plant will continue to gain market share. Ashtead directors believe the company to be “increasingly well placed to benefit when markets recover”.
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ASHTEAD: RESULTS FOR THE NINE MONTHS ENDED 31 JANUARY 2010
31.01.10 (£m) 31.01.09 (£m) % change
Revenue
Sunbelt (US) A-Plant (UK)
EBITDA
Sunbelt A-Plant
Central costs
Operating Profit
Sunbelt A-Plant
Central costs
505.5 121.2 626.7
165.8 32.0 (4.0)
193.8
56.7 1.3
(4.0) 53.9
676.1 165.3 841.4
241.1 50.9 (4.1)
287.9
128.2 14.5 (4.1)
138.6
AGGREKO: RESULTS FOR THE YEAR ENDED 31 DECEMBER 2009
Revenue Trading profit Profit before tax
31.12.09 (£m) 31.12.08 (£m) % change
1,023.9
946.6 255.0 246.5 202.2 191.6 +8.2 +26.1 +28.7
-25.2 -26.7 -25.5
-31.2 -37.1 -2.4
-32.7
-55.8 -91.0 -2.4
-61.1
9
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