Portfolio Update: Ashtead, AJ Bell & Alpha.

I have three updates for this week. The first is that Ashtead Technology reported its half-year trading update. Whilst statutory revenue growth was 23% compared to the prior year, this included the acquisitions of Seatronics and J2 Subsea. On a pro-forma basis revenue contracted by 6%, caused primarily by “a combination of the challenging geo-political environment, significant disruption in the US market and a small foreign exchange headwind”. One positive is that the group was able to expand its EBITA margin slightly during the period, again underlining the scale advantages and pricing power it enjoys, despite the challenging macro environment. I won’t go into more detail on the business here because I intend to revisit my investment thesis on Ashtead in the coming weeks; the now rock-bottom share price seems like a very attractive entry point.

The second is regarding AJ Bell which reported another strong set of results. Given, however, that the company has been reporting strong results for a while now, there was little change to the share price. Customer numbers in the advised segment were up 2%, now 7% for the year, and DTC customers were up 6% in the quarter, 22% for the year. The company also reported its best ever quarter in terms of net inflows, with 2.5bn added to the company’s AUM, which now stands at £96.1bn in total.

For the final update I have more exciting news. Alpha Group has been purchased by US-based payment firm Corpay in a cash deal worth £1.61bn, or £42.50 per share. Whilst it’s a shame to see the company taken off the London markets given it has been such a strong performer, it also seems like a good deal for shareholders. The price represents a 55% premium to the undisturbed share price of £27.45 per share on the 1st May, and a 71% premium to the volume weighted average share price of £24.81 for the one-month period ended 1st May. The management seems to have taken a very rational approach to valuing the business and have negotiated what seems like an attractive deal for shareholders. The purchase price also represents nearly a 150% increase on my position in a little under two years, so a very strong performer for me.