Ashtead (AHT) - The recovery continues

Afternoon All,

Good article in FT. Thanks Hatto/Srpactive.

I had a look at the Q3 results of Atlas Copco. Rental revenues up 13% (8% rental rates, 5% volume). Same store rental revenue up 15%. Number of stores was 465 vs 475 in previous year. This explains why rental revenue growth was below same store revenue growth. Given Sunbelt is expanding its stores its revenue growth should outperform Atlas.

Bodes well for December interims. Remember EVO's upgraded turnover forecasts still only predicts 8% growth (AHT Q1 12.3% and Q2 US performance looking strong as well based on Atlas results so similar growth may be expected in Q2). In addition we have the recent bolt on acquisitions as well.

A c.4% differential between EVO's upgraded forecast and current AHT performance may not seem like a lot, however, the 12.3% turnover growth in Q1 drove 52.5% operating profit growth and 150% PBT growth. Therefore, if AHT is able to beat EVO turnover growth by 4% (excludes acquisitions) this would suggest there may be a significant profit upgrade later in the financial year, possibly after the interims.