Subsea services firm Ashtead Technology (AT.) has revealed 2025 trading was better than expected. The shares – which are among the most-shorted in the UK market – jumped 12% on today’s update.
| Share price: 375p (+12%) | PE: 9.7x |
| Market Cap: £270m | Yield: 0.4% |
HIGHER MARGINS
Full year revenue is now expected to be £203 million, up 21% and in line with the consensus of £205 million. Trading in the second half was strong, and visibility improved as some delayed projects were mobilised.
Moreover, synergies from the Q4 2024 acquisitions of Seatronics and J2 Subsea were ahead of forecasts. Together with a higher margin business mix and increased efficiencies, that means EBITDA will be ahead of market forecasts.
Strong cash conversion means gearing has dropped to 1.4 times and is projected to below one time by end-2026. Capital allocation remains ‘disciplined’ with capital expenditure pegged at £35 million this year.
‘We are pleased with our performance and have made significant progress in widening and deepening the offering to our customers during the year,’ said CEO Allan Pirie.
We’re not sure why hedge funds were so negative on the stock, but it was the third most-shorted in December. A total of 7.4% of the capital was out on loan at the end of last year, according to FCA data.
What’s particularly encouraging is not just that business is improving but growth is profitable. The 2024 acquisitions have reduced their lower-margin activities which has had the effect of lifting group profits.
We aren’t experts on the energy services sector but Ashtead Technology isn’t the first firm to have pleased the market. Offshore support firm Gulf Marine Services (GMS) has also delivered positive news recently, so maybe this is an area to watch?
Read the press release here: https://www.ashtead-technology.com/investors/
For related news, see here: https://sharesify.com/which-are-the-most-shorted-uk-stocks/
For Gulf Marine Services news, see here: https://sharesify.com/gulf-marine-services-adds-to-backlog/
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