Have you ever felt the need to hire an Autonomous Underwater Vehicle to map the ocean floor in the middle of the North Sea? Well, Ashtead Technology LON:AT. might be the company for you.
The Aberdeen-based company published its unaudited results for the six months ended 30th June 2023 today (4th September). Ashtead was founded in 1985 to support the offshore oil and gas sector and has also started to work in the offshore wind sector, having supported the Hornsea Project One offshore wind farm – the world’s largest offshore wind farm, as well as Dogger Bank C and Ideol Hibiki offshore wind farm in Japan, the world’s first floating offshore wind farm.
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Ashtead Technology increased pricing
The company seems to have had a good year – no doubt buoyed by rising energy prices in the wake of Russia’s invasion of Ukraine as the UK Government announced “hundreds of new North Sea oil and gas licences to boost British energy independence and grow the economy” at the end of last month.
The company reported 1H23 revenue of GBP49.8m, up 57.1% from revenue of GBP31.7m in 1H22. This translated into gross profit of GBP39.3m, an increase of 68.7%. Adjusted earnings were GBP21.3m, up 73.7m year-on-year.
Revenue growth was driven by continued high demand across both offshore renewables and offshore oil and gas. Ashtead saw offshore renewables revenue increase by 74.1% to GBP16.3m from GBP9.4m the year previous, whereas offshore oil and gas revenue increased by 50.0% to GBP33.5m.
Although inflation has been a headache for many, it allowed the AIM-listed company to increase its pricing, which contributed to its increased gross profit. The spike in exploration following the rise in energy prices also saw Ashtead’s equipment get more use and installation.
Strong cash generation
The company’s cash generation helped Ashtead reduce its leverage from 1x to 0.7x. However net debt was up from GBP21.2m in 1H22 to GBP26.4m. The company placed 7,208,742 shares at 360p in May.
Allan Pirie, chief executive, said in a statement to the market this morning: “I am extremely pleased to announce our strongest ever set of interim results. We have continued to see positive momentum through the first half of 2023 with the group benefiting from our strategic investment in people and equipment, together with further increases to both utilisation and pricing. Our recent acquisitions of Hiretech and WeSubsea have performed ahead of our expectations, and we are benefitting from our increased breadth of capabilities.”The company is optimistic about the coming year, believing that market fundamentals will remain strong, given the new exploration licences in the North Sea and in other markets. The company did note that because growth was so strong at the end of 2022, that performance might be more moderate subsequently, but the company still believes that it year-end performance will be ahead of expectations. The company also mentioned that it was actively reviewing merger and acquisition opportunities to complement its organic growth, and was aiming to consolidate its position in a highly fragmented market.
Ashtead was founded in 1985, and since then has grown through acquisitions and organic growth, become one of the leading providers of underwater technology to the oil and gas sector, boasting a fleet of over 17,000 assets and operating out of 10 offices in five countries.
The company opened trading today at 415p but had dropped to 407p by lunchtime. Over the year-to-date the company’s shares were up 31.7% and over one-year were up 59.3%. The company has a market capitalization of GBP313m.
