Results round-up

FTSE 250 housebuilder Crest Nicholson reported a rise in profit and revenue for the half year and said it is on track to deliver full-year revenue growth, but cautioned that the UK election could bring about uncertainty.

In the six months to 30 April, pre-tax profit rose to £76.2m from £72.6m on revenue of £419.7m, up 3% from the same period a year ago and above consensus estimates of £399m. Meanwhile, the dividend per share was upped to 11.2p from 9.1p in 2016.

Open market average selling prices excluding the private rental sector were up 12% to £418,000, while unit completions excluding PRS were broadly in line with last year at 1,021 compared to 1,033. Overall unit completions were down to 1,064 from 1,206, as expected, mostly due to PRS delivery timing.

Forward sales at mid-June were up 4% on the previous year at £540.4m, while forward sales for the full year 2017 including year-to-date completions at mid-June were 6% ahead of 2016.

Chief executive Stephen stone said: "Crest Nicholson has delivered solid foundations for another year of growth in the first half of 2017. We have taken the first steps to establish a new division in the Midlands, increased outlets, built momentum in 2017 forward sales and pursued disciplined expansion of the land pipeline.

"The outcome of the UK General Election may introduce some uncertainty in the short term but we expect the new build housing market to remain robust. Strong levels of employment, low interest rates and good mortgage access - including through the Help to Buy Scheme - should all contribute to a sustainable new build housing market."

The company added that it is on target to deliver on its plans for 4,000 homes and £1.4bn sales by 2019.

Ashtead Group proposed hiking its dividend by almost a quarter after the construction equipment hire firm beat the City's profit forecast and foresaw another good year ahead.

Rental revenue rose 13% in the year ended 30 April to £2.9bn and underlying pre-tax profit leapt 23% to £793m, beating consensus forecast by £1m.

After earnings per share grew 8% to 100.5p and the business generated £319m of free cash flow, the board proposed a final dividend of 22.75p, making for a 22% increase for the full year to 27.5p.

Weaker sterling helped reported numbers but increased reported debt by £228m in the year, leaving net debt at 30 April at £2.5bn.
"The reported results were impacted favourably by weaker sterling but, with 13% growth in Group rental revenue at constant exchange rates, we have good momentum," said chief executive Geoff Drabble.

He pointed to strong end markets and "most importantly, we continue to see structural change as our customers increasingly rely on the flexibility of rental".

After spending £437m on bolt-on acquisitions and £1.1bn in capital expenditure, the company plans to continue grabbing market share via organic growth and bolt-on acquisitions.

"Looking forward, our markets remain good and spring has seen a good seasonal uplift in fleet on rent, with record levels of physical utilisation for this time of year. We expect a similar level of capital expenditure in 2017/18, consistent with our 2021 strategic plan.

"A number of the investments we made were in the seasonally quieter second half of the year and we incurred one-off costs associated with acquisition and integration. Now that this work is behind us, we anticipate seeing the full benefit of these investments in the coming year.

"Based on our plans we will, once again, see strong free cash flow which will provide us with further flexibility to enhance shareholder value. So, with both divisions performing well and a strong balance sheet to support our plans, the board continues to look to the medium term with confidence."

The shares were up 1.6% to 1,668p in early trading on Tuesday.

Analyst Nicholas Hyett at Hargreaves Lansdown noted that after enjoying a very strong run in the wake of Donald Trump’s election, shares in Ashtead have come off the boil a bit in recent months amid worries that the promised infrastructure binge might not materialise.

"Ashtead doesn’t seem overly fazed though. The group is continuing to roll-out new stores across North America, and demand looks to be more than keeping up, with the amount of fleet on rent breaking seasonal records. With 87% of revenue generated in the US, sterling weakness is an added bonus as well," he said.

"The group is seeing some weakness in pricing, as are competitors, but remains bullish on the longer term. Investment in growth remains a priority over capital returns to shareholders, although a 22% increase in the dividend today will mean shareholders are feeling far from neglected."