London's hottest blue-chip stock of 2021 is decidedly low tech

[LONDON] Ashtead Group consolidated its position as Britain's top-performing blue-chip stock this year after second-quarter results showed it boosting its share of the US equipment-rental market.

Shares in the London-based firm gained as much as 4.8 per cent, extending their 2021 rally to about 85 per cent. That's far bigger than the 13 per cent year-to-date gain for the benchmark FTSE 100 Index, whose next-best performer is cybersecurity firm Darktrace with an increase of 71 per cent.

Ashtead, owner of US equipment hire company Sunbelt Rentals, reported a 20 per cent rise in half-year rental revenue year-on-year. It opened 58 new locations during the period ended Oct 31 at a cost of US$1.63 billion through investment in existing locations and bolt-on acquisitions.

M&A in the US equipment rental market is helping the three big firms - Ashtead, United Rentals and Herc Rentals - get bigger, according to Bloomberg Intelligence, which says the UK company has been the most aggressive on greenfield store openings.

"We feel Ashtead should be able to command a premium rating," Citigroup analyst Marc Van'T Sant said in a note, citing double-digit earnings growth potential.

BLOOMBERG