8 London 2014 IPOs to remember
12 min read
09 December 2014
This year could see a record amount of cash raised by companies joining the London stock exchange's main market. According to Capita Asset Services, £7.4bn had been raised by the end of August and could be on trend to reach £11.7bn by the end of the year.
But with the recent number of IPOs failing to meet expectations, we mainly look to the IPO goldrush in the first half of 2014, which forked up quite a few interesting, not to mention sometimes surprising, flotations.
Date: 18 November
Virgin Money’s IPO, which would have led to a valuation of £2bn, was abandoned last month due to concerns about volatile market conditions, much like specialist lender bank Aldermore had.
But it was due to “[clarity from the Bank of England] and more stable market conditions that [Virgin Money] planned to move forward with the IPO once more, with the aim of being admitted by the end of November,” said CEO Jayne-Anne Gadhia.
“We are passionate about improving competition in UK retail banking, and believe that the IPO is another step forward for us as we seek to deliver on that objective,” she said. “And as we begin life as a public company, we are committed to maintaining the straightforward, transparent approach to business that we believe helps differentiate us.
“The completion of the IPO will also see us make a final payment to the Government of £50m as consideration for our acquisition of Northern Rock, taking the total paid to over £1bn.”
The business was only valued at £1.25bn, with Virgin Money raising £150m.
Shares in Virgin Money rose about 1 percent, to £2.86, in conditional trading on the London Stock Exchange early.
This will likely be the last major European listing this year.
“We’ve got very significant future growth opportunities across retail banking and none of the drag that is difficult for some of our competitors,” said Gadhia.
Date: 7 November
After being made export champion of the year 2012 in Real Business’ Growing Business Awards, Fever-Tree has gone on to put some fizz into the IPO market, raising £93.3m in its stock-market debut. The company was valued at £154.4m.
LDC, the private equity company behind Fever-Tree, sold off roughly 80 per cent of its majority stake. In the mean time, founders Charles Rolls and Tim Warrillow held onto their roles in the company.
“We’ve really enjoyed private equity,” Rolls said. “It gave us some money early on when we really needed it and they’ve been very supportive co-owners of the business. It was only on seeing the opportunity that Tim and I could still see out there that we thought we didn’t want to be in one of those auctions like we had 18 months ago when our last private equity owner sold.”
So they braved the storm and possibly became the first company to float after market conditions slowed.
“It’s exactly the result we wanted,” said Rolls. “It’s exciting to have the book very well covered with a significant number of blue chip investors, a recognition of the company’s exciting international growth opportunities. We look forward to building on our market-leading position as a quoted company.
“But the exciting thing is about the amount of growth that we see ahead of us,”Warrillow said. “Even in our more mature markets like the UK we feel like we’re still just getting started.”
Date: 22 October
After numerous delays and changing the price range several times, Jimmy Choo finally floated its shares at 140p a share.
The shoe firm sold around 26 per cent of its shares so it could raise money to expand in Asia. As a result, Jimmy Choo was valued at £545.6m. This was less than the £700m that owner JAB was looking for when its set a top price range of 180p for each share.
This is likely die to investors being cautions about Jimmy Choo’s £100m debt and the decline of luxury good sales in China, one of the areas where the company had hoped to expand in the future.
JAB received £21m for selling a portion of the company.
“The IPO marks an important milestone for Jimmy Choo and recognises not only the appeal of our high quality products but also confidence in our ability to outperform the luxury shoe market,” said CEO Pierre Denis.
“We welcome our new shareholders and look forward to sharing with them the continuing momentum of this exceptional brand.”
Zoopla Property Group
Date: 23 June
Zoopla, the online property company, floated in June and was valued at around £919m. It reported 45.5m average monthly website visits in the three months to July, a 34 per cent increase on the same period last year.
The company raised £385m at admission. And instead of raising new money from their listing, Zoopla returned proceeds of around £250m to existing shareholders
CEO and founder Alex Chesterman, a judge in the 2014 Growing Business Awards, said: “We continue to provide an excellent value proposition for our customers given the leads we generate for their property listings and exposure we generate for their brands.
“Our focus remains on building our brands and business and providing the most useful property resources to consumers along with being the most effective partner for property professionals across the UK.”
Date: 8 April
Just Eat is possibly the London Stock Exchange’s High Growth Segments first entrant since its launch in 2013. And the firm’s IPO raised eyebrows with its £1.5bn valuation.
CEO David Buttress said: “I believe that Just Eat is one of the most exciting global growth companies in Europe and we are all delighted at the strong levels of investor interest we have seen in our initial public offering.
“I believe that investors have recognised our track record of strong growth and that we have a strong platform for future growth. We look forward to life as a listed company as we join the market through the LSE’s High Growth Segment and continue expanding our leading online platform for takeaway food.”
The company later saw a record month in web traffic in July.
“I am delighted with our excellent progress across the business in the first six months of 2014,” he recently added. “Revenue has grown 58 per cent on the same period last year to £69.8m, we have significantly improved profitability and continued to deliver strong cash conversion.”
Date: 17 March
Although the company was initially valued at £750m, with shares offered at 300p, shares immediately climbed in demand, reaching a shocking 358p within less than an hour of its first day as a public company.
Poundland restricted its float to big London Institutions and the demand from investors led JP Morgan and Credit Suisse, to cover the book by more than 15 times.
The IPO reduced the £200m stake owned by private equity firm Warburg Pincus, who reduced its stake to just over 30 per cent of the shares. The company also delivered 19 per cent premium to its investors in early trading.
CEO Jim McCarthy said: ‘We look forward to continuing to deliver, as a listed company, Poundland’s mission to provide our customers with amazing value every day.’
Pets At Home
Date: 17 March
Unfortunately, this has been dubbed as one of the worst performing IPOs in 2014. This could be because it floated on the same day as Poundland, which was an astonishing success.
Pets At Home was valued at £1.2m. It’s shares were initially listed at 245p, but fell by four per cent almost immediately, reaching 236p within an hour and ending at 225p by the end of first day.
Pets at Home, which raised £280m towards paying debt, claimed to have a 12 per cent share of its market and more stores than its five biggest rivals combined.
At the time, when shares in Pets At Home increased to 182p following the trading update, CEO Nick Wood commented: “I can’t control that. In the long-term the share price will reflect our strength of our proposition. This is all new to us. One of things I have learnt is that as a public company you have to be constantly telling the story.
“We believe in what we are doing. I think we have a growth a growth opportunity.”
Date: 14 March
In its first day of trading, Boohoo.com shares rose 70 per cent after stock price increased from its initial 50p to 85p, valuing the business at £870m. This was a substantial increase from its estimated £560m.
The company had already secured £300m from investors in a share placing secured ahead of its listing on the London stock market though.
Boohoo.com explained that while £240m would be placed aside to pay off loans, £50m will be used to finance its expansion plans.
Nick Cowles, FD at Zeus Capital, which advised Boohoo on its IPO, said: “This has been the second largest corporate IPO on the AIM market since its launch in 1995. The £300m placing will provide the business with the required resources for its international expansion plans and has enabled a partial exit for its founding shareholders.
“This shows that confidence has undoubtedly returned to the market with significant capital being deployed for opportunities with an interesting story, a strong management team and strategy for growth.”