Equipment Rental Firm Ashtead to Relocate Primary Listing to US

Ashtead, a prominent equipment hire company, intends to transfer its main stock market listing to the United States, representing a further setback for the London Stock Exchange. The company stated that the US was a “natural long term listing venue” because most of its profit was generated in North America, where its executives, headquarters, and the majority of its workforce are also located. Ashtead is the latest among several major companies in recent years to delist from the London Stock Exchange [LSE], which had denied being in crisis in May. Ashtead indicated it would discuss its proposed relocation with shareholders before submitting it for a vote. The firm aims to move its primary listing to the US within the next 12 to 18 months, but it will retain a UK listing as an international company. The company, which rents out construction equipment, employs more than 25,000 people. Ashtead announced that annual profits would be lower than anticipated due to “local commercial construction market dynamics in the US,” which is expected to impact rental sales growth. Companies valued at hundreds of billions of pounds have been leaving the London Stock Exchange for the US over the past few years, leading to concerns about the UK’s attractiveness for investment. These companies include Cambridge-based microchip giant ARM Holdings, which now sells its shares in New York, and Flutter, the owner of Paddy Power. Ashtead stated that one reason for its desired move is to attract US investors. Although the US construction industry has been affected by higher interest rates, making borrowing more expensive, the firm expects the market for its services to strengthen as rates are reduced. Dan Coatsworth, an investment analyst at AJ Bell, noted that there had been “rumblings” suggesting the firm also sought the move as a “justification to pay the top brass big money.” He mentioned that Ashtead had faced criticism regarding a proposed $14m (£11m) pay deal for chief executive Brendan Horgan, which was deemed “excessive.” “That might be the case for UK-listed companies, but not US-listed ones,” Coatsworth said. He further added that incoming US President Donald Trump “favours American companies doing things for American people” – and that moving the listing would be “another tick in the box in its favour.” Coatsworth suggested that the next logical step would be to sell its remaining UK operations, which are “tiny compared to the US business.” However, an Ashtead spokesman affirmed that the move would not affect investment plans in the UK. Ashtead’s decision follows UK Chancellor Rachel Reeves’ alteration of the government’s self-imposed debt rules to release billions for infrastructure investment. The rule change is anticipated to allow for up to £50bn more borrowing to invest in significant building projects such as roads, railways, or hospitals. Ashtead was founded in England in 1947 and has been listed on the LSE since 1986. It expanded into the US in 1990, and by the early 2000s, it had become one of the largest equipment rental firms there.