Plant hire and equipment rental group Ashtead is celebrating its return to corporate health - with its first dividend payment for three years.
And the company said yesterday it would step-up its capital expenditure programme to around £220 million in 2005-06, which may include further bolt-on acquisitions.
The group, which has undergone a period of financial and corporate restructuring, said it would look to invest at least £100 million in growth areas and that it was currently reviewing a number of potential opportunities in North America.
The second-quarter quarter and half-time figures from the company showed a continuing strong recovery from its operations, particularly from its US-based Sunbelt division, which grew first-half revenues and operating profits by 18.9 per cent and 55.7 per cent respectively.
This, together with good performance from A-plant in the UK and a strong effort from Ashtead Technology, helped the group to more than double first-half pre-exceptional pretax profits to £40.2 million in the six months to October.
The Ashtead group operates from a number of sites in the Midlands including Aston, Coventry, Erdington, Redditch, Walsall Wood and Wolverhampton.
Sales for the half increased by 14 . 2 per cent to £313.8 million.
As a mark of confidence in the business going forward, the group is resuming dividends with a 0.5p interim payment.
Given the strong trading conditions, it is also planning to step-up its gross capital expenditure programme by £40 million to £220 million this year with some £100 million of this earmarked for growth.
Chief executive George Burnett said: "We'll be looking to grow the Sunbelt rental fleet size in the US and the number of locations we operate from."
Currently, Sunbelt has 206 locations across the US and is the country's fourth largest equipment rental group.
Sunbelt recently picked up a lot of work following the hurricanes that hit the Gulf of Mexico and New Orleans.
At A-plant, first-half operating profits were 3.5 per cent cent ahead to £8.9 million, while Ashtead Technology grew profits by 66.9 per cent to £ 2 . 3 million reflecting increased investment by the oil and gas industry.
Mr Burnett said: "The group has made a strong start to the year and we are confident going into the third quarter of 2005-06. Utilisation figures during November and December have held up well and we are encouraged by industry research that shows non-residential construction is set to grow by eight per cent per annum over the next two years."
In the UK, Mr Burnett said growth in the rental equipment market was being underpinned by the continued investment in road and rail infrastructure, while the Government's PFI and PPP schemes were also driving demand.
He said: "The UK rental market is stable, but there are some big projects coming along... most notably the London Olympics in 2012."
Yesterday's results were much better than anticipated, while the return to the dividend list also came earlier than expected.