- Group’s move will happen over the next 12-18 months
- Group rental revenue up 6% to $5.26 billion for first half
- Full-year guidance revised downwards
Shares in Ashtead (AHT) fell as much as 10% in morning trading as the equipment rental firm issued a profit warning and said it will be moving its primary listing to the US.
The equipment rental firm joins a growing list of UK companies moving their primary listing to New York including construction materials firm CRH (CRH) in April 2023, gaming, and betting firm Flutter Entertainment (FLTR) and speciality pharmaceutical business Indivior (INDV) this year.
Market research and polling outfit YouGov (YOU:AIM) is also considering moving its primary listing to New York but has yet to confirm if this will happen.
Dan Coatsworth, investment analyst at AJ Bell said: ‘Companies have typically shifted their main stock listing from the UK to the US in search of a higher valuation. That doesn’t apply to Ashtead as it already trades on a richer valuation versus its closest listed rival. Ashtead trades on 18.6 times the next 12 months’ earnings versus United Rentals on 18.5 times.
‘Ashtead’s decision is another blow to the London Stock Exchange as the latter battles a shrinking market. However, Ashtead’s impending listing switch was inevitable so in a way it’s better to happen now so the LSE can start the New Year fresh with a sharp focus on rebuilding the UK’s market reputation.’
PROFIT WARNING
Separately, the equipment rental firm issued a profit warning ‘as a result of local commercial construction market dynamics in the US.’
‘We now guide to group rental revenue growth for the full year in the range of 3%to 5% and hence, full year profit lower than our previous expectations,’ said the company.
It was not all bad news for the company as it reported a 2% increase in group revenue to $5.69 billion and a 6% increase in rental revenue to $5.26 billion for the half year ending 31 October.
The equipment rental firm also announced a share buyback programme of up to $1.5 billion over the next 18 months.
Ashtead’s chief executive Brendan Horgan said that the strength of mega project in North America and hurricane response efforts ‘more than offset the lower activity levels in local commercial construction markets.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
LEARN MORE ABOUT ASHTEAD
