Ashtead kicks off fresh $500m share buyback programme

Equipment rental company Ashtead Group announced the launch of a new share buyback programme on Tuesday, worth up to $500m.

The FTSE 100 firm’s previous buyback programme, which was announced in April 2021, came to an end on 28 April this year.

It said it remained disciplined in its approach to capital allocation, with a primary objective of enhancing shareholder value.

As such, Ashtead’s capital allocation framework remained unchanged, prioritising organic fleet growth, same-stores and greenfields, as well as bolt-on acquisitions and a progressive dividend.

In addition to those priorities, the company stated that it had also considered further returns to shareholders.

The amount allocated to buybacks was determined by available capital after organic growth, bolt-on mergers and acquisitions, and dividends, while allowing the company to operate within its 1.5x to 2x target range for net debt-to-EBITDA pre-IFRS 16.

At its third quarter results on 7 March, Ashtead announced initial plans for gross capital expenditure in the 2023-2024 period to be in the range of $4bn to $4.4bn.

The firm also said it remained acquisitive, with a strong pipeline of potential acquisitions.

“In this context and subject to ongoing shareholder approval, the group is announcing the launch of a new share buyback programme with an aggregate purchase price of up to $500m over the period commencing the date hereof, until 30 April 2024,” the company said in its statement.

“Because of the significant opportunities to deploy capital for growth detailed above, the group intends to commence the programme at a relatively low level and to flex this amount taking into account such factors as the macroeconomic backdrop, ongoing organic investment in the business, acquisition opportunities, cash generation, net debt and leverage.”

At 1050 BST, shares in Ashtead Group were up 2.29% at 4,682p.

Reporting by Josh White for Sharecast.com.