UK-based Ashtead is finding it more difficult to deliver value to its shareholders, yet it is not paying much attention to its core online strategy, according to our SEO analysis.
We delved into the two websites that the company operates, and here are our key findings.
Preliminary SEO Audit
Ashtead is the owner of sunbeltrentals.com, which targets the US market (84% of group revenue), and aplant.com, a website that focuses on the UK. Both present a technical set-up that is backed by relatively high performance metrics (robots.txt, HTTP status code, sitemap), although the sitemap of aplant.com contains wrong urls, which is a problem, of course.
Sunbeltrentals.com and aplant.com offer a poor mobile user experience, and speed metrics are similarly disappointing; as far as desktop is concerned, a performance below average has been detected by our team.
Both websites are relatively big but the path journey is smooth, based on their size.
For different reasons, the basic site hierarchy requires intervention at sunbeltrentals.com, while there are even bigger issues with aplant.com.
All our findings will be disclosed on Thursday in two separate SEO audits.
Financials
Its first-quarter results for the period ended 31 July showed:
· Group rental revenues up 20%
· Q1 pre-tax profit of £161m, up 23% at constant exchange rates
· £349m of capital invested in the business (2014: £284m)
· Net debt to Ebitda of 1.8x (2014: 1.9x)
Chief executive Geoff Drabble confirmed guidance for the year and said that the strength of the quarter reflects “the benefits of another strong execution of a consistent strategy to diversify the markets we serve, both in terms of geography and sector.“
“Sunbelt’s 23% rental revenue growth clearly demonstrates the overall health of our broader markets and the benefits of our more transactional business model.”
“Our seasonal improvement in demand was very strong, resulting in record levels of physical utilisation in July on a fleet that was 26% larger.” Mr Drabble added that the group is on track to achieve its plans of “mid to high teens fleet growth” in the US and open 50 new locations.
The group is burning more cash than in the past, but its financials and debt maturity are reassurung.
Value
Ashtead is an industrial equipment rental group with a market cap of £4.7bn (EV of £6.6bn); its stock has fallen 17% since the turn of the year after a very strong performance since mid-2012.
Today’s trading update pushed up the stock 4.6% at 8.58 BST; trading multiples indicate fair value based on the group’s projected growth rate and a few other metrics, but there are caveats.
For instance, in its annual results, which were released on 16 June, there was no trace of anything like a detailed online strategy, which should be addressed in the light of the nature of its core business.
The same conclusion could be drawn from its quarterly results today.
If you want to discuss the prospects of higher tangible returns for Ashtead’s online strategy, please contact our team at info@hedgingbeta.com
Alessandro Pasetti and Hedging Beta are not invested in any of the companies mentioned in this article.