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Construction equipment rental group Ashtead plans to move its listing from London to New York, in a blow to the UK stock market as it battles to retain its status as an attractive destination for international companies.
The FTSE 100 group, which makes almost all its profits in North America, said on Tuesday that following a review the board “has concluded that the US market is the natural long-term listing venue for the group”.
Ashtead, one of London’s 30 most valuable listed companies, said that switching its listing would improve “overall liquidity in the group’s shares given access to deeper US capital markets” and make it more attractive to US investors.
The group, which had a market valuation of £28bn before the announcement, added that its executive management and operational headquarters were in the US, as were most of its staff.
It intends to retain a listing in the UK, on the international companies segment of the London Stock Exchange. However, the company would exit the blue-chip FTSE 100 index as a result of no longer having a primary London listing.
Moving its primary listing will require shareholder approval.
Ashtead announced the plan to switch its main listing alongside half-year results in which it warned that profits would be lower than previously expected, which it blamed on a slowing US construction market.
Shares fell 12.9 per cent in Tuesday morning trading in London.
Ashtead’s decision follows moves by fellow FTSE 100 groups, including Flutter, which owns Paddy Power, and building materials group CRH. Ferguson, previously known as Wolseley, switched its listing to the US in 2022, while this year an activist investor called on engineer John Wood Group to consider a similar shift.
Ashtead’s decision is a blow to chancellor Rachel Reeves’ efforts to bolster London’s global standing.
UK politicians and regulators have been pushing to overhaul UK rules to ensure London remains attractive to international companies. The Financial Conduct Authority in July unveiled the biggest overhaul of the UK’s listing rules in three decades.
Ashtead’s announcement on Tuesday came a day after the London Stock Exchange received a boost when shareholders of French media group Vivendi approved a plan to list pay-TV operator Canal+ in the UK. It would be the biggest London IPO in more than two years.
The Treasury declined to comment on individual companies but a Treasury spokesperson said the Canal+ announcement and this year’s IPO of computer maker Raspberry Pi, which has a market value of £770mn, “demonstrate confidence in our capital market”.
“Growth and driving more investment in the UK is our number-one mission,” the spokesperson said, adding that “there is more we can do to attract exciting businesses to the UK”.
Reeves believes that her recent pensions reforms and regulatory changes will make London a more attractive place to list.
Last year, Ashtead said that it had no plans to move its listing to the US, with chief executive Brendan Horgan saying: “I prefer to focus on growing the business.”
On an analyst call on Tuesday, Horgan said: “The centre of gravity of the group has been moving west over a long period of time and today we are, to all intents and purposes, a US company.”
He added: “The advantages of a US primary listing over other markets, such as deeper capital markets, greater liquidity, inclusion into important US indices etc have become more evident over the last few years.”
Ashtead said that upon moving its listing, it would change its name to Sunbelt Rentals, a brand it uses in the US.