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The Ashtead Group (LSE: AHT) share price was barely affected by full-year results released Tuesday (17 June), which looked a bit mixed.
Ashtead is reporting its last set of FY results as a FTSE 100 company before it switches its main listing to New York and adopts its US Sunbelt Rentals business name. CEO Brendan Horgan said the move should happen “in the first quarter of calendar year 2026.“
The construction rental firm signed off from London with a 1% decline in revenue as profit before tax dropped 5%. Adjusted earnings per share dipped 4%.
By contrast, soaring free cash flow hit $1,790m from 2024’s $216m. The full-year dividend comes in at 108 cents per share. That’s 79.7p at current exchange rates, for a yield of 1.8% on the previous close.
At the time of writing, the share price has fallen less than 1%.
What next?
Looking forward, the company says “we expect a number of years of strong earnings and free cash flow generation.” And that means it will “have the opportunity to enhance returns to shareholders, while maintaining leverage towards the middle of our target range of 1.0 to 2.0 times net debt to adjusted EBITDA.”
That leverage ratio came in at 1.6 times for the 2025 fiscal year. So it’s on course, and down a little from 1.7 times in 2024.
For the current year, the board’s guidance suggests revenue growth of 0%-4%. Capital expenditure should be around $1.8bn to $2.2bn with free cash flow between $2.bn and $2.3bn.
US relocation
A move of a company’s stock market listing might sound like a major upheaval. But the announcement of the plan in December 2024 said: “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.”
It added: “The board has concluded that the US market is the natural long-term listing venue for the group.” It’s hard to disagree.
The company will still retain a UK listing, so shareholders happy with the move shouldn’t have to do anything. And most do seem to be happy, with 96.4% voting in favour of the motion at a court meeting on 10 June.
Valuation
We’re looking a trailing price-to-earnings (P/E) ratio of 16 based on the adjusted EPS of 369.5 cents (272.7p) just reported.
That’s close to the long-term average for the FTSE 100. But the average for the S&P 500, for example, is currently estimated at around 28. But it does include a number of extremely highly valued tech stocks.
Some observers suggest we could see a re-rating for Ashtead stock closer to US valuations after the move. Others see it coming at a bad time with the US under a growing threat of stagflation.
I see the move as little more than a formality as this is already an almost totally US operation. Based on valuation and outlook, I think investors could do well to consider Ashtead wherever it calls home.
