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City News:

A-Plant’s clear sign

Catherine Stratton considers the latest financial results from A-Plant and Aggreko.

March has seen some turbulence on Stock Markets across the world but the UK listed hire companies appear to be weathering the storms relatively well.

Ashtead’s nine months results have been much affected by its bold acquisition of NationsRent at the end of August last year, which took Ashtead’s Sunbelt subsidiary to No.3 in the US market place.
At the time of the acquisition, the Group anticipated that it would be “significantly earnings enhancing” in the year to April 2008. In the meantime the integration has forged ahead with the NationsRent fleet reconfiguration on track; since this January, Sunbelt has begun to benefit fully from the integration savings but the current results reflect the costs of the integration measures.

The size of Ashtead’s US operations tends to overshadow the performance of its UK business but A-Plant remains one of the key players in the UK market and it continues to make strong progress in recovering its position here. Its acquisition of Lux Traffic Controls in October was a clear sign of growing confidence and gave the company leadership of a niche market. Chief Executive Officer Sat Dhaiwal commented that the integration of Lux with A-Plant’s own traffic systems hire operation was going well and the benefits were now coming through. Overall A-Plant now operates from a total of 231 depots, with 107 now offering tool hire; the traffic systems operation has 48 standalone outlets.

Ashtead stated that A-Plant enjoyed organic growth of about 11% in the three months ended January 2007, indicating that the company is winning an increasing share of the UK hire market. It is achieving a high level of time utilisation (over 70%) and is now examining its hire rates.

Star performer

The star performer of recent weeks has been Aggreko, which issued a sparkling set of results, accompanied by a confident statement on its prospects for the current year. The shares hit a new ‘high’ of 490p on the day of the announcement and have since progressed to touch 518p on 26 March.

Last December Aggreko acquired GE Energy Rentals, a major competitor, which expanded the company’s fleet by 30% and enhanced its geographical coverage in Europe as well as North, Central and South America. Integration is said to be going well and Aggreko states that it has secured cost savings more quickly than had been anticipated.

Aggreko chairman Philip Rogerson says that, if current trends continue, the board anticipates “a strong first half” and, for the year as a whole, “to achieve a material increase in profits compared to 2006”, which was a record year for the group.

Executive Hire NewsArchivesApril 2007City News › A-Plant's clear sign

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