Subsea equipment specialist Ashtead Technology (AIM: AT.) has seen a surge in revenue in its 2023 full year results as a flurry of M&A deals bear fruit.
The company’s revenue grew 51% to £110.5 million (compared to £73.1m in 2022), driven by strong organic growth (35%) and mergers and acquisitions (17%).
In addition, the company made a gross profit of £86.3m for 2023 (up from 2022’s £54.3m), representing a gross margin of 78.1% (2022: 74.2%).
This was driven by a combination of higher cost utilisation and improved pricing.
The results reflect the full-year impact of Ashtead Technology’s acquisition of WeSubsea and Hiretech, both completed in 2022. In addition, it includes one month of the company’s purchase of ACE Winches, which was completed on the 30th of November 2023.
Both 2022 purchases performed ahead of their acquisition cases with combined revenue growth of 30% on LTM revenues at acquisition.
Ashtead Technology saw its adjusted EBITA reach £36.2m (an 82% increase from 2022’s £19.9m), representing an adjusted EBITA margin of 32.8% (2022: 27.1%).
Revenues from both the offshore renewables and the oil and gas markets up 50% and 52%, respectively, with renewables revenue growth representing 31% of total revenue.
The ACE Winches results delivered on expectations.
The company also increased investments in its rental fleet compared to 2022, £19.1m over £13.1m.
Employee headcount grew by 25% organically to further support business development and reach with an additional 203 joining via the ACE Winches acquisition, taking total headcount to 527 at year end.
For the future, the company is targeting low double-digit organic revenue growth in the medium-term with sustainable EBITA margins in the high 20%s.
Growth in the offshore renewables market remains particularly significant, with the company’s addressable market within offshore wind to increase at 25% CAGR to 2027.
Market growth across both oil and gas, and renewables will drive the group’s continued customer backlog build with a combined CAGR of 11% across Ashtead Technology’s addressable markets to 2027.
With the acquisition of ACE Winches supported by an approximately 30% expansion of total accessible market, this is forecast to increase to $3.5bn by 2027 from $1.2bn at IPO.
Furthermore, the company noted that its strong performance in 2023 positions Ashtead to continue to pursue selective, value-accretive M&A opportunities.
The board also noted that it is encouraged by the company’s Q1 2024 performance, leaving its full year 2024 expectation unchanged.
Chief executive officer Allan Pirie, commented: “2023 was another successful year for Ashtead Technology as we made great progress in delivering our strategic goals and reported strong financial growth during the period.
“We grew ahead of our markets in 2023, highlighting the efficiencies and value add we provide our customers’ offshore operations. We are investing for the future, expanding our market reach through both organic and inorganic investment as we continue to broaden our fleet and build strength and depth of expertise which ensures we are well-positioned to continue to capitalise on upcoming market opportunities in a sector supported by long-term structural tailwinds.”
Recommended for you
