Ashtead warns on profits, unveils plans to move listing to NYSE

(Sharecast News) - International equipment rental group Ashtead announced on Tuesday that it is planning to move to a primary listing to the US, where its management team, operational headquarters and vast majority of operations are already based. The news came as the company delivered a profit warning due to weaker local construction market dynamics in the US.

Rental revenues are now expected to grow by just 3-5% over the full year, compared with earlier guidance of a 5-8% improvement, owing solely to a downgrade in US rental growth to 2-4% from 4-7% previously.

Ashtead, which operates as Sunbelt Rentals, has the second largest equipment rental company in the US with 1,220 stores across all 50 states, while holding a 9% share of the Canadian market with 140 stores.

It said the New York Stock Exchange was the "optimal listing location" and "natural long-term listing venue" that was in the best interests of shareholders.

"Today Ashtead is substantially a US business, reporting in US dollars, with almost all the group's operating profit (98% in FY24) 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 company said in a statement.

Moving its primary listing to the US would increase its exposure to US investors, enhance liquidity given access to deeper US capital markets, simplify share ownership for employees, and improve go-to-market strategy through a group rebranding as Sunbelt Rentals, the company said.

Ashtead plans to discuss the proposal with shareholders and expects to implement the necessary steps over the next 12 to 18 months. Under the proposals, the UK listing would be retained but under the International Companies segment of the London Stock Exchange.

For the first half ended 31 October, Ashtead delivered revenues of $5.70bn, up 2% on last year, with rental revenues rising 6% to $5.27bn, as mega projects and hurricane response efforts more than offset the lower activity levels in local commercial construction markets. The company said local construction markets have been affected by the "prolonged higher interest rate environment".

Group adjusted pre-tax profit was $1.26bn for the half, down 4% year-on-year.