The IPO Review EQ Boardroom, Equiniti the IPO REVIEW
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The IPO Review EQ Boardroom, Equiniti THE IPO REVIEW Introduction “I am delighted to present our IPO round-up for 2018. Decisions on whether or not to list had to be taken against a political as well as a financial context, especially by UK boards. With concerns about disruptions to trade, investors have been apprehensive, especially in the latter part of the year. However, we have also seen outstandingly successful listings which have captured investors’ imaginations and turned well-served customers into enthusiastic shareholders. Such successes demonstrate that sophisticated and liquid markets like London cannot be distracted from opportunities to invest in strong and forward-looking enterprises. Overseas companies looking to list are coming to London in ever greater numbers, attracted by our ready capital, transparency and regulatory standards. In this way London continues to help power the global economy and in turn we at Equiniti are proud to help power the London market. As the largest provider of shareholder services in the UK we count the majority of FTSE 100 companies as clients and with our record of helping companies to list, we look forward to swelling their ranks.” Paul Matthews CEO, EQ Boardroom 02 THE IPO REVIEW Contents 02 Introduction 04 Executive Summary 05 Sector Analysis Highlights of Main 06 Market Listings 07 Highlights of AIM Listings The Battle to Attract 08 International Tech IPOs 09 2018 vs 2017 10 Outlook 2019 03 THE IPO REVIEW Executive Summary With global free trade under Stout-hearted retailers also listed Overall the year was down on pressure and the meaning in the year; ignoring the script 2017 in both the number of of Brexit foggier than ever, and raising money to expand listings and the money raised. it could have only been a their high street presence. The companies approaching fascinating year for London Conversely, Industrials sector the market, however, were IPOs. Companies wrestled with had a modest year in terms of larger. Tech floats were up and the decision of whether to list IPOs and Healthcare kept an international IPOs remained now or risk markets becoming even lower profile. strong. London held its own in increasingly unsettled. Initial the face of fierce competition for positivity in the first half of the Aston Martin and Funding cross-border listings from the US year noticeably waned by Q3 as Circle added a dash of colour and Asian exchanges. high-profile IPOs encountered to the main market, which also challenging trading conditions. saw AJ Bell list and Smithson Opinions on the outlook having to increase the level of its for 2019 IPOs are healthily The Financial sector showed the raise from £250m to £823m to varied. Liquidity is seen as most willing to float and took meet strong investor demand. remaining strong, but with the lion’s share on the main Meanwhile AIM could boast a investor appetite constrained market and almost matched £150m raise for property finance by the market’s traditional foe: Technology’s top honours company Urban Exposure and uncertainty. on AIM. £108m for gamers Team 17. BACK TO CONTENTS 04 THE IPO REVIEW Sector Analysis Financial Services led the way The Technology / Telecoms on both the main market and sector IPOs would have been AIM, accounting for almost half considerably boosted by O2, of all UK incorporated flotations which had been expected to and capital raised. The sector float in 2018. However, the contributed a quarter of AIM’s c. £10bn mcap Telefónica 2018 floats, but the dominance business again postponed its was particularly evident on the listing until Brexit uncertainties main market where Financials are resolved and investors are made up 59% of the year’s less distracted. listings. Mediterranean driller Energean Financial sector companies raised £330m and was the launching IPOs included Quilter, stand-out of the Oil and Gas which floated £239m worth IPOs and the only one on the of shares, Amigo £327m and main market. The sector has Smithson £823m. Investment been buoyed by a continued platform AJ Bell’s listing at the recovery in oil prices: Brent end of the year gave it a market Crude began the year at over cap of £651m.The average new $66, up from a 2016 low of $37. money raised across Financials exceeded £100m. Healthcare did not trouble the main market with an IPO at all The majority of Technology in 2018, contrasting poorly with floats were on AIM, although European IPO activity for the Funding Circle’s £440m was a sector. Ever-increasing pressures highlight of the main market. on margins in the UK, not least The continued allure - or from wage costs and concerns mystified awe - of blockchain about where post-Brexit labour saw a main market listing for will be sourced, kept the sector cryptocurrency-servicing Argo in the doldrums. The only three Blockchain, which successfully listings on AIM raised a modest raises £25m. Avast’s £2.4bn £85m. market capitalisation on admission underlined London’s 2018 saw the beginnings of continued status as a favoured real wage growth but consumer market for tech IPOs. The Czech confidence remained low, cyber security company joined household budgets tight and the fellow Europeans Spotify (listing high street decidedly wobbly. in NY) and Adyen (listing in This made it a challenging year Amsterdam) in going public to go public for businesses in 2018 and boosting the in the Consumer Goods and continent’s unicorn count. Izettle Consumer Services sectors, with had also intended to float but only two main market and four was nabbed by PayPal at twice AIM floats between them. the price about to be asked of the public. BACK TO CONTENTS 05 THE IPO REVIEW The more intense regulatory environment was also behind Old Highlights Mutual’s decision to spin off its wealth management division as Quilter Plc. of Main The well-received IPO saw Quilter achieve a market cap of £2.8bn, Market second only to Aston Martin Lagonda. Smithson Investment Trust notched up the highest raise by a UK-domiciled Listings investment fund when it launched its IPO in September. Initially targeting only £250m, demand was so great The LSE’s first float of the year saw for the global equity fund - advised IntegraFin, owners of the financial by City star Terry Smith - the cap advisor platform Transact, valued had to be re-set to £600m and then at £650m. The 20-year-old firm again to the record-breaking £823m. already had plenty of exposure to Money like that burns holes in even the investment community, with over the biggest pockets and the fund 150,000 investors and 5,000 FAs using predicted it would fully deploy the its services. The £178m raise saw capital within three weeks. equity returned to the founders. Book retailer The Works read the Aston Martin Lagonda raised market well when raising £65m from £1.2bn from the exchange. The fully- its listing. This new and public chapter subscribed offering gave the company will see the business continue to defy a market capitalisation of c. £4.3bn prevailing sentiment and expand its and a vote of confidence in its ability already large store estate. to deliver the planned range of SUV and electric cars. Investors dug deep to raise £25m for cryptocurrency mining company There was great interest in Funding Argo Blockchain, the first of the “fifth Circle’s September float. The firm, industrial revolution” businesses to which has passed the £5bn loan mark list on the LSE. Argo has already and attracted 80,000 investors is seen done the spadework for those looking as a bellwether for its generation of to access the mining-as-a-service peer-to-peer fintech lenders. The investment opportunities by setting up £440m raise valued the pre-profit a mega plant in Quebec. business at £1.5bn and was against the headwinds of a second base rate Battery technology fund Gore Street increase and greater political and Energy could only be positive after regulatory scrutiny of PTPs. These raising £31m from its IPO. The challenges appeared to be reflected in firm sees worldwide investment subsequent trading and together with opportunities in utility scale energy Aston Martin the week after, stayed storage and sought capital to below launch price since listing. maximise its first mover advantage in new markets. 06 THE IPO REVIEW Highlights of AIM Listings Property development finance Fellow gamesters Team17 Fintech and disruptive finance company Urban Exposure also launched this year, raising portfolio owner TruFin raised impressed with a £150m raise. £108m from mainly institutional £70m from institutional and Four years after shelving plans investors which included professional investors. The to float a debt fund, Urban Lloyds Bank. The champion of capital will be used to build up Exposure felt its now-wider independent game developers its subsidiaries which include geographical base allowed now has a market cap of £217m. specialist lenders Oxygen it to float the company itself. Finance, DFC and Satago. The net funds will see a scaling Mind Gym lifted a weighty up of both asset management £51m at its AIM float. What Cake Box sponged up £17m in opportunities as well as was a kitchen table business in an IPO that valued the franchise further lending. 2000 now boasts several blue- business at £43m. Growing at a chip clients for its behavioural rate of 2 stores per month, the High-profile City fund manager science-based training products. hatchers of the egg-free cake Neil Woodford nursed Sensyne The listing comes at a time will use the funds to expand its Health to a £60m AIM listing. when the #MeToo movement existing 91 units to 250.