US hurricanes putting wind in Ashtead’s sales

Hurricanes have proved to be good news over the past year for equipment rental firm Ashtead.

after three major storms last year boosted revenues at the group – which supplies tools from concrete mixers to industrial chillers – it said it was setting up a ‘crisis centre’ in the carolinas as Hurricane Florence approaches.

The centre will have around 30 staff and will rent out clean-up equipment such as power generators and pumps.

even before the worst of the hurricane season hit the us, ashtead – which makes most of its money through its us business sunbelt – had been raking it in.

it announced yesterday that rental revenues for the three months to July were up 19pc to £961m, as profit before tax shot up 23pc to £285.6m.

nicholas Hyett, an analyst at Hargreaves Lansdown, said: ‘Donald Trump’s economic policies are playing out quite nicely for ashtead. a massive cut to corporation tax has done wonders for profits this year, and it’s also sparked a round of investment in the domestic us economy which is seeing demand for ashtead’s construction equipment soar.’

Management said full-year profits would be ahead of previous expectations, and it would extend its share buyback scheme.

When a company scoops up its own shares, this makes those left in investors’ hands more valuable.

ashtead also set out plans to go on a spending splurge, to fill out its rental fleet while demand was strong. However, Hyett warned of the need to keep debt to a minimum. He said: ‘a construction downturn would hit earnings far quicker than ashtead can pay down debt. With the boom being fuelled by a presidential administration that’s erratic to say the least, we’re pleased to see leverage at the lower end of target, and would really rather it stayed there for the time being.’

shares grew 5.2pc, or 118p, to 2398p yesterday. Despite ashtead’s gains, the

FTSE 100 ended the day down 0.08pc, or 5.76 points, at 7273.54 as sterling climbed on higher-thanexpected wage growth.

since many firms on the bluechip index sell their products abroad, a stronger pound generally pushes the FTse100 lower. sterling hit highs of $1.309 in the morning, before settling at $1.301. Tobacco companies Imperial Brands and British American Tobacco were particularly vulnerable, falling 3.3pc (or 90p, to 2608.5p) and 2.7pc (or 99p, to 3554.5p) respectively.

in the FTse 250, Metro Bank’s flamboyant founder and chairman Vernon Hill splashed out £818,700 as he bought 30,000 shares in the company. investors took the purchase as a sign of confidence, causing shares to creep up 1.2pc, or 32p, to 2760p.

Hill, who is often accompanied to meetings by his Yorkshire terrier sir Duffield ii, owns 5.1pc of Metro Bank.

Outside the uK’s biggest companies, another building business was stacking up gains. Alumasc, which supplies premium building products, climbed 10.4pc, or 13p, to 138.5p. its full-year results, despite being lower than last year, matched previous guidance. it has been a tough year for alumasc, which suffered from poor winter weather, the collapse of contractor carillion and a lower number of large construction projects.

asthma inhaler maker Vectura, meanwhile, was preparing for harder times ahead. The company said it was thinking about stockpiling its products in case the uK left the eu with no Brexit deal and its supply chain was disrupted.

The company slid the warning into its half-year results, which showed revenue was up 1.4pc to £79.9m. shares rose 0.1pc, or 0.1p, to 74.1p.