Equipment rental firm Ashtead has revealed plans to switch its main UK listing to the US in yet another blow to the London stock market.
The FTSE 100 Index firm said the US market is the “natural long-term listing venue” for the group, given that almost all of its earnings (98%) are now made in North America and the majority of its workers and operational headquarters are also in the US.
It aims to shift its primary listing to Wall Street over the next 12 to 18 months, but keep a UK listing in the international companies segment.
Ashtead said it will discuss the plans with investors in the coming weeks before putting them to its wider shareholder base for approval at a general meeting “in due course”.
Details of the listing plan came as the company also warned that annual profits will be lower than expected due to “local commercial construction market dynamics in the US”, which is set to affect rental sales growth.
The listing change will add further pressure to the embattled London market, with a raft of other firms, including travel company Tui and Paddy Power owner Flutter, shifting their main listings overseas in recent years.
The board has concluded that the US market is the natural long-term listing venue for the group and that moving to a US primary listing, while retaining a UK listing in the international companies segment, is in the best interests of the business and its stakeholders
Ashtead
A number of blue chip firms have also recently been bought by foreign rivals, including packaging group DS Smith, which is being taken over by US firm International Paper.
Last week, FTSE 100 mining giant Rio Tinto was under pressure from activist investor Palliser Capital, which has demanded the metals and minerals firm scraps its primary London listing and focus on Australia.
Ashtead said: “The board has concluded that the US market is the natural long-term listing venue for the group and that moving to a US primary listing, while retaining a UK listing in the international companies segment, is in the best interests of the business and its stakeholders.”
It added: “Today Ashtead is substantially a US business, reporting in US dollars, with almost all the group’s operating profit (98% in 2023-24) derived from North America, which is also the core growth market for the business.
“The group’s executive management team and operational headquarters are based in the US and the vast majority of the group’s employees reside in North America.”
The firm reported a 4% fall in half-year pre-tax profits to 1.2 billion US dollars (£942 million) and said it now expects rental revenues for the full-year of between 3% and 5% against previous guidance for 4% to 7%, which will leave profits lower than expected.
It said: “Local construction markets have been affected by the prolonged higher interest rate environment.
“However, underlying demand continues to be strong and we expect this segment to recover as interest rates stabilise.”