Ashtead Technology stock surges on upbeat trading update

Investing.com — Shares of Ashtead (LON:) Technology surged by 9% today following a positive trading update that suggested the company’s financial performance would exceed market expectations.

The company’s announcement indicated that revenues for the fiscal year 2024 are projected to be approximately £168 million, slightly above the consensus estimate of £167 million and in line with RBC’s estimate of £172 million.

Additionally, Ashtead Technology anticipates its full-year adjusted EBITA to be ahead of the consensus forecast of £46.6 million.

The company’s robust trading towards the end of 2024, consistent market demand, and record customer backlogs have instilled confidence among investors that Ashtead Technology’s growth trajectory will extend into 2025.

This optimism is supported by the company’s projections for a 36% increase in revenue and a 30% growth in EBITA for 2025. These figures are buoyed by the positive contributions from the recent acquisitions of Seatronics and J2, as well as organic growth within the company.

An RBC analyst provided further context to the company’s performance, stating, “A large proportion of Ashtead Tech’s customers, particularly in oil and gas, are ending FY24 with near-record backlogs which will be executed in 2025-2028, and drive a high level of sustained offshore activity.

“Into 2025, we anticipate offshore contracting to continue, and help to prolong this cycle. These market fundamentals help to set a strong platform for higher offshore utilisation and in turn for Ashtead Tech’s enlarged business to see continued pricing power, deliver growth, and increase margins and returns.”

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