If readers had bought £100 worth of shares in Ashtead on 13 March 2003, their stake would now be worth just under £6,000. To put it mildly, the tool hire group's performance over the past two-and-a-half years has been impressive and forecast-busting second-quarter results from the company yesterday extended the winning run for the stock. Ashtead unveiled a pre-tax profit of £27.9m, nearly double that predicted.
Admittedly it would have been an ultra-brave investor who bought into the group in March 2003. In those days it looked to be heading for administration amid tough trading conditions and problems servicing its debt. But those times are long gone. Ashtead is now back on the dividend list, promising to pay investors an interim 0.5p a share.
The key to Ashtead's success has been the US construction boom. The tool hire group generates 83 per cent of its profits from across the Atlantic, where demand for its services has been boosted by the massive clean-up operation after this year's extreme hurricane season.
The consensus among brokers in the Square Mile is that Ashtead shares have further to run. And they are probably right, making the stock a hold. But anyone who bought into Ashtead two-and-a-half years ago would do well to take some of their chips off the table.
