Equipment hire giant Ashtead has announced plans to shift its primary stock market listing to the United States, signaling a significant move away from the London Stock Exchange (LSE). The company stated that the US is a “natural long-term listing venue” for the business, given that the majority of its profits are derived from North America, where its headquarters and most of its employees are based.
The decision follows a trend of major companies opting to delist from the LSE in recent years, raising concerns over the attractiveness of the UK market for investors. Ashtead is the latest in a series of firms to make the switch, with notable names like ARM Holdings and Flutter Entertainment also having moved their listings to New York. However, the LSE has denied that the exit of such companies indicates a crisis.
Ashtead, which employs more than 25,000 people worldwide and rents construction equipment, intends to consult with shareholders before moving forward with the decision, which will then be put to a vote. The company aims to complete the transition within the next 12 to 18 months but plans to retain a secondary listing in the UK as an international company.
The shift to the US comes amid expectations that Ashtead’s annual profits will fall short of previous projections due to challenging market conditions in the US construction sector. The firm cited local commercial construction dynamics as a factor impacting rental sales growth, exacerbated by the higher interest rates that have made borrowing more expensive in the US.
Part of the motivation for Ashtead’s move is to attract more US-based investors, according to the company. Despite current challenges in the construction industry, Ashtead remains optimistic that the market for its services will improve once interest rates begin to fall.
Industry analysts have suggested that the decision could also be influenced by Ashtead’s controversial compensation package for CEO Brendan Horgan, which includes a $14 million salary. Dan Coatsworth, an investment analyst at AJ Bell, noted that while such a high salary may be seen as excessive in the UK, it is more typical for US-listed companies.
Despite the focus on the US, Ashtead has emphasized that its decision will not affect its investment plans in the UK. The company has operated in the US since the early 1990s and has grown to become one of the largest equipment rental firms in the region.
Ashtead’s move comes on the heels of recent changes to the UK government’s borrowing rules, which will free up additional funds for infrastructure projects. However, the shift signals a continued trend of companies seeking listings in markets that align more closely with their global operations.
