MARKET REPORT: Investors cheer equipment rental giant Ashtead’s pledge to pay out its £151m final dividend
Investors breathed a sigh of relief after equipment rental giant Ashtead pledged to pay out its £151million final dividend.
The FTSE 100-listed group hailed a ‘resilient’ performance in the year to April 30.
Ashtead, which rents out everything from generators and portable cabins to tools and cranes, suffered in the initial downturn in March and April, with profits almost halving in the final quarter.
FTSE 100-listed group Ashtead hailed a ‘resilient’ performance in the year to April 30
But across the year as a whole, profits fell by a much smaller 4 per cent to £1.1billion, while rental revenue rose 8 per cent.
Its businesses in the US, Canada and the UK, which operate under the ‘Sunbelt’ brand, have been deemed essential, and work has continued at a number of construction sites.
It has also been providing vital equipment to first responders and hospitals, and products such as metal barriers that can be used to create socially distanced queuing areas.
Stock Watch – Puretech Health
The US Food & Drug Administration has given Puretech Health the all-clear for its Endeavor Rx video game to be prescribed to children with attention deficit/hyperactivity disorder.
The treatment is targeted at eight to 12-year-olds, and clinical studies found parents saw a meaningful change in their children’s ability to concentrate after a month.
After two months, its effect was even greater. Shares in the FTSE 250-listed group rose 7.5 per cent, or 19.5p, to 259.5p.
As well as not needing to furlough any staff it also hasn’t had to make redundancies, which presumably fed into its decision to keep the dividend.
With around half of Footsie companies having cut, axed, or deferred making decisions on their shareholder payouts, Ashtead’s news was a boost for investors, who sent its stock soaring 9.6 per cent, or 232p, to 2649p.
The share price is now nearly 10 per cent higher than at the start of the year.
Traders will be hoping the same recovery is on the cards for the wider market too.
After a downbeat start to the week the FTSE 100 advanced 2.9 per cent, or 178.09 points, to 6242.79 – though it still has some way to go before it is out of the woods, being down around 17 per cent so far this year.
The latest boost followed the US Federal Reserve’s announcement on Monday that it would kick off a new round of bond-buying.
Rumours are also doing the rounds that the US government is preparing an £800billion spending package to stimulate the economy.
The FTSE 250 also climbed, rising 2.2 per cent, or 375.53 points, to 17464.70.
Mid-cap cinema chain Cineworld was on the up after outlining its plans to reopen.
Some UK sites will start showing films again towards the end of this month and it wants all of them to be open in July.
It will also open the doors on a number of its cinemas in the US, ahead of the lucrative summer blockbuster season.
It will bring in additional cleaning and social distancing measures, such as only having screens 50 per cent full, in British cinemas – though it’s not clear if popcorn and other snacks will be on sale.
Shares rose 1 per cent, or 0.8p, to 79.74p. A clutch of firms all accelerated after sealing – or coming close to sealing – new contracts.
Oil and gas services firm Wood Group jumped 9 per cent, or 18.9p, to 229.8p, after it won two solar deals in the US state of Virginia with an unnamed American power and energy company.
Outsourcing heavyweight Capita leapt 7.6 per cent, or 3p, to 44p, after clinching a £9million contract with Irish Water to provide its customer support services with new software and other digital skills.
The deal could be extended for another two years, which would net Capita a further £15million.
And Clipper Logistics said it is close to inking an agreement with Sir Philip Green’s Arcadia Group, which owns Topshop and Burton, on a transport contract for its store delivery network, which would see Clipper making some 3,000 deliveries a week starting from August. Its stock rose 3.2 per cent, or 9.5p, to 305p.