UPDATE 2-Ashtead to buy back shares, full-year profit beats estimates
(Adds CEO, analyst comments, details, share movement)
By Esha Vaish
June 14 (Reuters) - Ashtead Group Plc announced a share buyback of up to 200 million pounds ($284 million) for the current financial year, after strong North American growth helped the industrial equipment hire group beat full-year profit estimates.
The company also raised its full-year dividend by 48 percent to 22.5 pence, citing expectations of significant free cash flow generation due to strong margins and lower costs for fleet replacement in the current year.
Shares in Ashtead, which hires out diggers and tools on short-term contracts, rose almost 4 percent, making it the top percentage gainer on London's bluechip index.
The company said it expected "good" earnings growth, as seasonally higher demand for fleet on rent seen during spring had continued into the new financial year.
Chief Executive Geoff Drabble told Reuters that the company expected capital expenditure to grow by double digits to mid-teens in North America and by mid- to high-single digits in the UK.
"Two-thirds of our growth continues to be structural growth, not market growth, so we will grow as we open new locations, take market share and as our customers choose to rent rather than own," he said.
The London-listed firm has greatly benefited from the rebound in U.S. construction markets, particularly in the private sector. Continued...