Signs of life in London’s flotation market as firms consider IPO options
There are signs of life in London's flotation market after a slow start to the year.
Furniture retailer The Range and store card maker NewDay are both considering initial public offerings (IPOs), which could value each company at more than £1bn.
Today, audio visual and document solutions distributor Midwich announced it had raised £75m through a float on the alternative investment market (Aim).
In addition, Directa Plus, a producer and supplier of graphene-based products for consumer and industrial markets, has announced plans to list on Aim.
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Meanwhile, fashion retailer Joules has also announced plans for a £140m listing. And it emerged last week that magazine Time Out was considering a flotation to value the company at £200m.
It was also reported last month that cinema chain Vue is considering a flotation for next year.
Hotel Chocolat is also expected to complete an IPO this month. And Krispy Kreme, Mountain Warehouse and Pure Gym are among those engaged in the IPO process.
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News of the action comes after a slow start to the year for the IPO market, both in the UK and globally.
The global IPO market fell to its lowest level since 2009 in the first quarter, according to Dealogic. IPO volume for the first three months of this year, to 29 March, stood at $13.2bn (£9.2bn), down 67 per cent on the same period last year.
It was a similar story in London, where the total raised through IPOs slumped to £1.6bn, down from £4bn in the last quarter of 2015, according to EY data.
The accountancy firm put the drop down to market volatility and the looming EU referendum.
Another report, IPO Watch from PwC, said a "pause button" had been pushed on the IPO market, both globally and in the UK, with the referendum approaching.
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But the report, released last month, suggested the second half of 2016 would see a pick-up in activity.
Lucy Tarleton, capital markets director at PwC, said: “The pipeline of companies preparing for IPOs towards the end of 2016 and into 2017 looks generally healthy, but as the IPO window begins to close as we get closer to the EU referendum and traditional summer hiatus, we expect that there will be increased volatility where people won't want to price IPOs.”
Despite news of The Range and NewDay considering IPOs, there is no certainty that these will come to fruition. And The Times, which first reported they could value the companies at more than £1bn each, said they would not go through before the EU referendum.
Range founder and chief executive Chris Dawson said: “A company of this size has many options. Our focus is on expansion throughout the UK, Ireland and Europe. We continue to concentrate on new technology, innovation and driving the business forward."
Upcoming IPOs
So far in 2016, 22 London IPOs have been completed, according to Dealogic statistics.
In addition to Midwich, four more – for Joules, Hotel Chocolat, Oncimmune and Morses – are expected to price this month.
A further eight have been announced in the last 180 days and are waiting to be priced, including IPOs for Krispy Kreme, Mountain Warehouse and Pure Gym.