How saving dolphins has lifted hire firm’s shares
A CLEAN-up effort following the devastation caused by hurricanes Irma, Maria and Harvey helped lift equipment hire firm Ashtead.
Shares in the company soared after it revealed it had seen a surge in demand for its fleet following the disaster that savaged much of America and the Caribbean earlier this year.
Ashtead said demand for its generators was particularly high in regions like Puerto Rico, which lost nearly all of its electricity after Hurricane Maria wiped out power across the island.
Earlier this year Ashtead had no generators to rent in the country, it now has 850.
The firm, which also supplies the emergency generators that help keep dolphin tanks running in Sea World, said it had also assisted in the clean-up of Disney World which was hit by Irma in Florida.
The clean-up efforts lifted its profits by 16pc to £493m in the six months to the end of October, while sales surged 19pc to £1.9bn.
The results sent the firm’s shares up 2pc, or 41p, to 2060p. Mixing the good news with the bad, Ashtead revealed its chairman Chris Cole will be retiring next September after ten years at the firm and it had begun a search for his successor.
Ashtead also announced that it was commencing a share buyback programme of between £500m to £1bn over the next 18 months – though the news received a mixed response from analysts who questioned whether the move was too risky. Nicholas Hyett, equity analyst at Hargreaves Lansdown, said the buyback was ‘good news for shareholders in the short term but we’re still not entirely convinced about the decision.
‘Ashtead’s a highly cyclical business and while things are looking good at the moment we feel it’s important to protect its strong balance sheet position.’ Recruitment firm Robert Walters soared after revealing profits for the full-year will be higher than anticipated. The firm, which has already raised its profit forecasts twice this year, said the boost was largely due to strong trading in October and November.
It places people in finance, engineering, legal and marketing jobs and was set up in 1985 by chief executive Robert Walters, who still retains a 2.9pc stake.
It raised its profit forecast in July, before bumping it up again in October, saying that banks had continued to hire ‘significant numbers’ of people in London, despite concerns Brexit would lead to a slowdown in hiring.
The update caused Investec to raise its price target for the firm to 670p from 600p and Panmure to raise its target to 640p from 585p.
Shares yesterday jumped 7.7pc, or 42.5p, to 593.5p.
The FTSE 250 finished up 0.04pc, or 8.40 points, to 20,073.02 while the FTSE 100 finished up 0.63pc, or 46.93 points, to 7500.41.
The lift was helped by Centrica, which surged 2.3pc, or 3.3p, to 144.8p after an explosion in Austria hiked up the price of gas.
Also up was addiction treatment specialist Indivior which jumped 1.5pc, or 5.6p, to 380.5p after the FDA accepted its application for its schizophrenia treatment.
But supermarkets Sainsbury’s and Morrisons slipped after the latest Kantar grocery figures showed the pair had lost market share in the 12 weeks to December 3 and grocery inflation had hit its highest level since 2013.
Morrisons’ share fell to 10.6pc from 10.8pc in the same period a year before, despite sales rising 1.4pc year-on-year.
Sainsbury’s market share dropped to 16.3pc from 16.5pc while sales edged up 2pc.
Sainsbury’s was one of the biggest casualties on the FTSE100, dropping 4.1pc, or 10.1p, to 234.6p while Morrisons dropped 4.5pc, or 9.9p, to 211.5p.