Ashtead Technology Holdings – with significant progress and increased confidence in its growth, subsea and offshore energy specialist could switch to the Main Market, shares 458p, TP 700p

19.05.2025

This coming Thursday, 22nd May, will see Ashtead Technology Holdings (LON:AT.) hold its AGM to approve its Report & Accounts for its 2024 Trading Year.

The £368m-capitalised group, which is a leading subsea equipment rental and solutions provider for the global offshore energy sector, is growing at quite a pace.

Strong market fundamentals underpin its growth strategy supported by record levels of multi-year customer backlogs.

The group’s addressable markets within its focussed end-markets of Oil & Gas and Offshore Renewables are forecast to grow at a 9% compound annual growth rate through to 2028.

That is just the right background that will attract further institutional investors, especially if it switches to the Main Market later this year.

Its shares, now at 458p, could well put on fair amount in value over the next year.

The Business

The company began trading in Aberdeen in 1985, providing clients in the North Sea and beyond with high-specification survey and remotely operated vehicle equipment on a rental or sale basis.

Over the last forty years, Ashtead Technology, has successfully expanded through strategic acquisitions to become one of the leading providers of equipment rental solutions, advanced underwater technologies and support services to the global offshore energy sector.

The Aberdeen-based group employs more than 650 people and services its customers from thirteen facilities located in key offshore energy hubs located in Europe, the Americas, Middle East, and Asia Pacific.

Its specialist equipment, advanced-technologies and support services enable its customers to understand the subsea environment and manage offshore energy production infrastructure.

Last November the group completed its ninth acquisition in the last seven years, when it acquired Seatronics and J2 Subsea, which increased its rental fleet by about 30%.

Importantly, it emphasised its position as the market leader in subsea survey and robotics.

Ashtead Technology operates globally, servicing its customers from its facilities located in key offshore energy hubs, with bases in Singapore, the UAE, the UK and the US.

The integration of Seatronics and J2 Subsea further strengthened the group’s international reach and global client relationships, making it well-positioned in strategic geographies.

Over the medium-term, the group is targeting low double digit organic revenue growth, supported by an expectation of steady growth across its addressable oil and gas market and strong growth in offshore wind.

Growing Markets

A key differentiator for Ashtead Technology is the flexibility of its model.

The majority of its equipment is fungible across both end-markets which it serves, creating an inherent resilience as the world transitions to greener energy supplies in certain parts of the globe, whilst doubling down on more traditional energy production in other regions.

In addition, it supports the full asset lifecycle in both markets from greenfield installation, through inspection, maintenance and repair and on to decommissioning, meaning we have an offering that can easily respond to changing market dynamics.

The international mobility of the group’s offering also allows it to navigate geopolitical complexity without significant impact.

Combining strong demand for oil and gas-related activity in the US and South America with excellent renewables activity in Europe and APAC gives it a balanced and resilient portfolio that has limited exposure to areas of particular geopolitical uncertainty, such as US offshore renewables and North Sea Oil and Gas.

Latest Results

On Tuesday 25th March, the group reported that for the year to end-December 2024 it increased its revenues by 52.1% to £168.0m (£110.5m), its pre-tax profits were 31.1% better at £36.1m (£27.5m), boosting its earnings by 34.7% to 45.0p (33.4p) per share, while paying out a 9.1% improved dividend of 1.2p (1.1p) per share.

The results which showed continued growth was lifted by 14% organic growth and 39% inorganic revenue growth.

Management Comment

CEO Allan Pirie stated that:

"We are delighted with our performance in 2024, exceeding our financial and strategic objectives.

The Group finished the year larger, stronger and more capable of delivering value to our customers.

This is underpinned by the breadth of our offering and the flexibility of our international operating model.

The integration of Seatronics and J2 Subsea, acquired in November, is at an advanced stage and the quality of what we have acquired has already exceeded our expectations.Reflecting on the strong financial performance in 2024, the record backlogs being reported by our customers and the strong growth fundamentals in our core markets, we are confident in our ongoing positive momentum.

With opportunities for both continued organic growth and disciplined M&A activity, we believe that we can deliver further value creation for our shareholders moving forward."

The Equity

There are some 80,313,838 shares in issue.

Larger holders include Aberdeen (9.10%), Fidelity Management & Research (8.1%), JP Morgan Asset Management (7.9%), Investec Wealth & Investment (4.9%), BlackRock (4.8%), Schroder Investment Management (4.0%), Lothian Pension Fund (3.6%), WCM Investment Management (3.2%), and Vermeer Partners (3.0%).

Analyst Views

There are eight analysts following the group, a consensus of their estimates suggests that group revenues in the current year to end-December will be £227.5m, with underlying pre-tax profits of £49.3m, generating earnings of 45.5p but only paying a minimal dividend of 1.3p per share, while the group’s net debt at the year-end could be £114.3m.

For 2026, revenues of £249.9m, profits of £58.1m, with earnings of 53.3p and a 1.4p per share dividend, net cash at the year-end could be around £88.7m.

The consensus predicts that in 2027 the group’s revenues could rise to £271.4m, with £65.9m profits, earnings of 60.2p and a 1.5p dividend per share, net debt could reduce still further to £51.9m.

In My View

The group’s shares, which have been up to 889p within the last year, are currently 458p.

Their progress over the next year or so would undoubtedly be helped by the group gaining a Main Market listing.

With its AGM this coming Thursday and then its first-half Trading Update due in July, the corporate newsflow should be very positive.