By Elena Vardon


Ashtead Group proposed to move its primary listing to the U.S., where it makes most of its business, and lowered its guidance as the commercial construction market dynamics in the country are set to weigh on its revenue.

The London-listed equipment rental company's board concluded that moving its listing is in the best interest of the business and its stakeholders as the U.S. market is the natural long-term listing venue for the group.

North America is its core growth market, which represented 98% of its operating profit for fiscal 2024, and its operational headquarters and management team are located in the U.S., it said Tuesday.

The proposed move makes Ashtead the latest company to shun the London Stock Exchange for a U.S. listing. Flutter Entertainment--which houses FanDuel, PokerStars, and Paddy Power among its brands--started trading in New York on Jan. 29 and made that its prime listing from May 31, while British chip maker Arm Holdings also chose New York over London for its stock market return in September 2023.

German travel company TUI quit London in June and drugmaker Indivior switched its main listing to the U.S a month earlier, while retaining a secondary listing in the U.K. Just Eat Takeaway.com is also planning to leave London at the end of this year after four years on the City bourse.

Ashtead would retain a U.K. listing in the international companies segment, Ashtead said. The group will discuss the proposal with shareholders and put forward a formal resolution for approval. The implementation of the necessary steps is set to take place over the next 12 to 18 months, it added.

The group also slashed its guidance for fiscal 2025 on Tuesday, citing local commercial construction dynamics in the U.S. It lowered its rental revenue growth view to between 3% and 5%, compared with its previous 5% to 8% growth target.

It now sees 2% to 4% rental revenue growth in the U.S.--against 4% to 7% growth previously--but stuck with its expectations for Canada and the U.K. at 15%-19% and 3%-6% respectively.

For the six months ended Oct. 31, Ashtead made $5.265 billion in rental revenue, 6% higher than the same period a year prior. Yet, lower used-equipment sales and a steeper rise in depreciation and interest costs led it to report a 4% fall in pretax profit to $1.20 billion for the period.

"In North America, the strength of mega projects and hurricane response efforts have more than offset the lower activity levels in local commercial construction markets [which]have been affected by the prolonged higher interest rate environment," Chief Executive Brendan Horgan said.

Market conditions also led Ashtead to adapt its expansion plans to trim its capital expenditure forecast for the year to between $2.5 billion to $2.7 billion from the $3.0 billion to $3.3 billion range previously.

Horgan added that the North America segment is expected to recover as interest rates stabilize given that underlying demand is still strong.


Write to Elena Vardon at elena.vardon@wsj.com


(END) Dow Jones Newswires

12-10-24 0309ET