Subsea services group Ashtead Technology (AT.) posted FY25 earnings well above the consensus, while revenue was in line with estimates. The firm issued upgraded guidance in January after H2 trading exceeded expectations.
Strong market fundamentals
For the year to December, revenue rose 21% to £203.2 million as per the firm’s revised guidance. The acquisitions of Seatronics and J2 Subsea contributed 19% growth, while underlying growth net of currency moves was 2%.
Adjusted EBITA increased 17.5% to £59.1 million, representing a 29.1% margin, towards the top end of guidance. Adjusted EPS increased 9.8% to 49.4p against the company-compiled consensus of 44.7p.
The firm said the integration of Seatronics and J2 had released synergies earlier than expected as well as broadening its international presence. By the end of last year, a third of revenue was generated from operations outside Europe.
Growth is supported by ‘strong market fundamentals’ and a record level of multi-year customer backlog. The company estimates the total addressable market for its services is set to grow to $3.4 billion by 2029.
Meanwhile, trading in January and February has been in line with forecasts although the Iran war has created timing uncertainty for some projects. Absent an extended conflict or wider disruption, the firm is sticking to its FY26 forecasts.
These are solid results, and the EPS beat is a nice bonus, but the firm is understandably cautious on the FY26 outlook. The more it grows and diversifies, however, the more services it can offer across a wider geography.
That won’t insulate it completely from trouble in the Middle East, but in a sense the current situation plays to its strengths. The need for energy security around the world means firms which offer integrated solutions to the offshore industry will be in high demand.
Meanwhile the business is highly cash generative and has a strong balance sheet. That not only offers protection, it also positions the group to capture growth opportunities as and when they arise.
Read the press release here: https://www.ashtead-technology.com/investors/
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