Ashtead, a leading equipment hire company, has announced plans to relocate its primary stock market listing from the London Stock Exchange (LSE) to the United States. The company, which rents construction equipment, cited its substantial presence and operations in North America as the driving force behind the move.
The company explained that the US was a “natural long-term listing venue” as the majority of its profit, employees, and headquarters are based there. Ashtead, which employs over 25,000 people globally, said it would discuss the move with its shareholders before proceeding with a vote. The company intends to complete the transition within the next 12 to 18 months but will retain a secondary listing on the LSE, maintaining its status as an international company.
Ashtead’s decision marks a significant blow to the London Stock Exchange, which has seen several large companies shift their listings to the US in recent years. The move follows a trend that has raised concerns about the attractiveness of the UK as an investment hub. Notable companies such as ARM Holdings and Flutter, the owner of Paddy Power, have already made the move to US exchanges.
The company, which has experienced strong growth in the US construction market, acknowledged that annual profits would fall below expectations due to weaker dynamics in the local commercial construction market. However, Ashtead is optimistic that the situation will improve as interest rates in the US begin to decrease, benefiting the market for its equipment rental services.
Ashtead also said part of the reason for the relocation was to attract more US investors. Despite challenges in the US construction sector caused by higher interest rates, the company remains confident in the long-term outlook for its business.
However, the move has sparked some controversy. Investment analyst Dan Coatsworth suggested that the decision might also be linked to Ashtead’s desire to justify high pay packages for top executives. The company faced criticism earlier this year for a proposed $14 million pay deal for its CEO, Brendan Horgan. While such compensation might be seen as excessive for UK-listed companies, it is more common in the US.
Despite the concerns, Ashtead insists that its decision will not impact its investment plans in the UK. The move follows recent changes in UK government debt rules, which are expected to unlock additional funding for infrastructure projects in the country.
Founded in 1947 and listed on the LSE since 1986, Ashtead began its US expansion in 1990. Today, it is one of the largest equipment rental companies in North America, marking a shift in focus as it prepares for its move to the US exchange.
