Ashtead Technology (AT.:AIM) 414p

Gain to date: 65.6%

We added Ashtead Technology (AT.:AIM) to our Great Ideas portfolio a little less than a year ago at 250p and since then it has made great strides, rewarding our faith in spades.

We saw scope for the company, which hires out underwater equipment to the renewable and oil and gas industries, to benefit from two key themes – energy security and energy transition, and that’s proved to be the case to date.

WHAT’S HAPPENED SINCE WE SAID TO BUY?

The business and its share price have reached new highs in the interim, with first-half results (4 September) providing the latest catalyst.

Offshore oil and gas revenue grew by 50% to £33.5 million, and renewables revenue increased by 74% to £16.3 million, while group like-for-like turnover rose 40% with acquisitions contributing around 14% growth and around 3% coming from currency movements.

Gross profit grew faster than revenue, up almost 69% to £39.3 million, taking the gross margin to 78.8%.

Although growth is expected to moderate in the second half, after the ‘unseasonal’ strength of the final quarter of 2022, ‘market fundamentals remain strong’ and the full-year performance is expected to be well ahead of previous guidance according to chief executive Allan Pirie.

The strength of its performance underlines the fact this is not just a simple rental business – it also provides additional value through its technological capability, servicing and assembly offering.

WHAT SHOULD INVESTORS DO NOW?

We still think Ashtead Technology is an excellent business and see big long-term potential. However, it may be prudent to book some profit given the shares are at a record level.

This stance reflects the company’s own, entirely understandable, warning of moderating growth in the second half and wider issues in the offshore wind market where costs are soaring and developments are being cancelled.

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