Ashtead has been a very good recovery stock.One to watch leading up to results 13th December and beyond.

Current broker target set 26.5.08 is 76p.
Any idea where this is heading based on the news, or is this just a hopeful punt?

Harrycat: article from The Times, 28May2008 alerted me to this one:

"This is a gloomy time for the construction industry, particularly companies with exposure to the US, such as Ashtead, the forklift truck and crane hire group. So dealers were dumbfounded yesterday when its shares shot up 11 per cent on 12 million traded - some six times the usual volume.
"The shares closed up 7p at 75p, sparking talk of a bid. An approach from management had been mooted late last year. The rise on such high volumes is too big for the broker upgrade initially rumoured. More likely is that Ashtead is close to selling its oil and gas technology business, which hires underwater cameras and portable weather stations to the booming energy industry. A deal is likely to be concluded in time for results on June 26.
"The company said recently that sale talks were progressing well, having appointed N M Rothschild in April to find buyers for the arm, expected to fetch up to 100 million, which will help to bring down its 1 billion debt. Matthew Earl, who covers Ashtead for Investec, its house broker, said: The most likely thing on the cards is the sale of the oil service business.

Ouch! 1b debt!!! 100m isn't going to make much of a dent in that. So short term spike in the sp then?

By my rough calculations,the results just announced(76 million profit ) puts the company on a P E of just 2!

Maybe, but the sp looks at the future and building sector is dire - look at Estate agents going out of business and homes half-built. Hence the Hire industry will not have the resources to replace their old/rusting kit... IMHO...arrgh!

I can't argue about the economic problems,but Ashtead results look much better than expected,and with Obama stimulus plans and the like,tool hire may be the option more widely used.
There follows an article from The Daily Telegraph.

Ashtead lifted by US and UK infrastructure spending plans
Ashtead Group shares jumped after the construction equipment hire company said Government plans to increase infrastructure spending could start to boost the market by the end of 2009.

By Graham Ruddick
Last Updated: 1:42PM GMT 09 Dec 2008

Ashtead Group
The company said statements from political leaders in the US and UK were "encouraging" and that they could benefit as smaller rivals collapse and contractors increasingly choose to rent equipment rather than invest in their own because of financial constraint and uncertain order books.

Alistair Darling, the Chancellor, has said 3bn of public sector spending in the UK will be brought forward into 2009 and the Barack Obama, the US president-elect, has announced that he plans investment in national infrastructure not seen since the creation of the highway system in the 1950s. Both schemes are designed to stimulate the economy as concerns about rising unemployment grows.

However, Ashtead warned they were yet to see "firm financial commitments" from governments.

Ashtead, which conducts 85pc of its business in the US, was speaking as it revealed mixed results for the six months to October 31 and unveiled a cost-cutting programme to ensure the business is the "right size" for the anticipated levels of demand.

Pre-tax profits slumped 44pc to 39.5m in the half-year as the company incurred 37.1m of exceptional charges through the downsizing of the business. Underlying pre-tax profits rose to 76.6m from 71.5m.

Ashtead, which rents out a range of industrial equipment from diggers to small tools, has launched the cost-cutting programme after being hurt by the slump in housing and commercial construction.

The outlook for infrastructure construction in utilities, prisons, schools and transportation remains "good" for the medium term but future strength will depend on the Government proposals, it added.

Store closures, headcount reductions and a downsizing in the number of delivery vehicles have been applied by Ashtead with the aim of saving 45m in costs annually. The company reduced its staff from 9,594 worldwide to 9,381 during the period, although 130 of those were from the sale of Ashtead Technology.

The 89.8m generated from the sale of its oil and gas technology division was used to pay off the company's troublesome debts, which still managed to rise to 1.1bn from 963m because of the strengthening dollar. However, the company said the debt facilities were long-term and were structured to be "effectively covenant free".

Geoff Drabble, the chief executive, said: "Ashtead has continued to perform well against the background of weakening market conditions. Our strong and diversified market positions have and will continue to benefit the group but it is also important that we take prompt actions based upon realistic assumptions of the future trading environment.

"Longer term, our strong market positions, long-term committed debt facilities, cash generative and flexible business model and the decisive restructuring exercise which we are undertaking allow the board to view the future with confidence."

Shares in the company were trading up 5.5p - or 18pc - to 36.50p at lunchtime.

Text Size Email this article
Print this article
Share this article
delicious
Digg
Facebook
Fark
Google
Newsvine
Reddit
StumbleUpon
http://www.telegraph.co.uk/finance/newsbysector/epic/aht/3689686/Ashtead-lifted-by-US-and-UK-infrastructure-spending-plans.html
Related Content
More on Ashtead GroupMore on ...
Ashtead Group Get feed updatesFinance Get feed updates

Goes ex-div on the 28th jan '09.
Set to yield 6.0% in 2009.

Ashtead is up from under 30p ,so has had a good run of late.Some pullback is now taking place.
Prospects look better with the Obama stimulus package set to kick in.
Also,Ashtead has done the rags to riches thing before,going from 10p to 240 a few years ago!

Chess

Or done the riches to rags before - depending on when you start your chart !!!!

Quite right!
At least however,they are at the stage where they are putting on new clothing!
That dividend loks good.

IMHO any rise is due to USA having a new President - but until he produces the stability required over there, we are only Trading a false dawn.
What's surprising is the purchase of their own shares . . .. when will companies stop destroying shareholder funds by this stupid activity?
If they'd wanted to - they should have done so a few months ago with the sp abt. 30p - - - but I suspect it will return, making recent buy-backs the same as burning the cash.

Surely it's easy to say now that they should have bought at 30p. It's possible that they now expect the sp to rise further, in which case 42p will seem a good price.
I have got to agree that share buy backs have been generally bad news for companies recently, but in a falling market that will always be the case. Assuming that the market is now going to sideways trade for a while before the upturn, this particular buyback may seem a good idea in 12 months.
I am happy to hold my stake in AHT for now in anticipation of better times towards the end of 2009.

It's not looking like a good idea at the moment, distinct lack of support at the moment, looks like your comments (hangon) were spot on. Unfortunately I bought in last week and am now 15% down, if it hits 30p again will top up as that could possibly be a double bottom, or just an opportunity to suffer a little more for the next few months. Should do well on a long term basis, so more profit later.

steveo - did similar buying in this week, and have every intent to add should the price hit 30.5 (easier to get the order filled).

Have swung between a pro-buy back and anti buy-back person over the months but looking back it has to be anti. The pro-argument is EPS based, but the SP graph is market based, and carries much, much more weight.

One of the oldest adages on the market is not to fight/buck the market - we seem to have to learn the same lessons over and over. Perhaps buy backs would make sense on a rising trend ?

MoneyAM
"Equipment hire company Ashtead's pre-tax profits fell 41% in the third quarter to 11m.

But the firm says the 45m cost-cutting programme announced in December is now substantially implemented.

It said third quarter performance in line with expectations in its seasonally most uncertain period and revenue for the nine months to the end of January rose 8% to 798.6m.

It said all debt is committed for the long term and structured to remain covenant free.

Chief executive Geoff Drabble said: Whilst we are operating in difficult and uncertain markets we have been preparing for these conditions for some time.

'Our actions in right sizing the business, which are already evident in our performance, together with our strong balance sheet allow the Board to anticipate full year results for profit and cash in line with our expectations'."

BROKER NEWS - MoneyAM - Ashtead upgraded to hold from sell at Panmure Gordon, target price stays 35p.

From the Blue Index Blog

Ashtead Vulnerable
May 11th, 2009

The signs are there that things may be bottoming out for the housing market and in particular housebuilders. Plant hire group Ashtead (AHT) has fared well in recent weeks, as the fortunes of its business depends heavily on the strength of the construction sector.

But this morning the group warned the markets that it expects underlying full year pre-tax profits to 30 April 2009 to be within the lower end of current forecasts. Added to this the group said recent rental rate and revenue trends suggests that profits in fiscal 2009-2010 are also likely to fall below the boards earlier expectations. Although rental volume continue to hold up well, and in line with expectations, as expected, construction markets in the UK and US are weaker with private sector projects particularly impacted by the shortage of funding. The Ashtead board alo said it had reduced net debt by GBP100m to GBP1.04bn, and it remains highly confident in its strength for the longer term.

Full transcript here
http://blog.blueindex.co.uk/2009/05/ashtead-vulnerable/

The debt is 4x the Mkt Cap . . . (DYOR), grief this is a dull business - and I don't think the "Housing Market" is ready to jump-start too soon.
First, there are plent of reposessions available for anyone with cash.
Second, there are few mortgages available, esp for properties not yet built (which increases risk and makes a forced-sale quite difficult)
Third, AHT is a supplier of kit that is lying about on many sites, or which can be picked-up on the cheap. . . . . . yet in reality there are plenty of "stopped" building sites if there should be anyone daft enough to want a new house quickly.
Finally, the housing market was in "bubble" territory for the last 5+years IMHO - and until prices fall further there will not be a restart . . . . sadly there are also many B2L properties about to be dumped on the Market - as amateur landlords are squeezed dry by falling rents, arrears, etc. while the Landers demand regular payments.
AHT may be a Bellwether for construction, but once the London-Olympic Joker is played-out there is only Crossrail.

Ashtead Group target moved to 1.10 from 84p by RBS

strong support at 80p, looking good for a quick move to 83p before the next leg up which should be next week, if not later today IMHO