B&M IPO helps resurgent northern deals market
THE flotation of Liverpool discount retailer B&M Bargains helped the north contribute 26% of the total funds raised on the Stock Market in the second quarter.
According to EY’s IPO Eye report, B&M and three Yorkshire companies, Card Factory, Polypipe and Clipper Logistics collectively raised £1.7bn out of a total of £6.6bn.
The results contributed to a stellar first half of 2014 for Northern IPOs, with six main market listings – including Pets At Home and AO World in Q1 – collectively raising £2.6bn. This represented 28% of the £9.4bn total raised by 27 companies on the main market in the first half of this year.
Overall, the London IPO markets, comprising AIM and the main market, have continued their bumper 2014 performance. There were 37 IPOs in Q2, raising cumulative funds of £7bn and helping to make it the strongest first half of the year since 2007.
Richard Harding, partner and North West IPO leader at EY, said retailers had continued to be particularly popular for investors.
“Following AO World, Pets at Home and Boohoo in Q1, retailers B&M Bargains and Card Factory capitalised on the stablising economic landscape, increasing consumer confidence and strong capital market conditions to join the public markets in the second quarter.
“Their track records for profitability, strong management and expansion prospects illustrate that cash rich investors are still keen to move for the right businesses.”
EY said there were signs during the second quarter of the London IPO market “overheating” as some floats such as retailer Fat Face and budget airline Wizz Air , being pulled and others not achieving the expected aftermarket performance.
Mr Harding was more optimistic though, adding: “While many claim that the market is experiencing deal fatigue, we believe that investors are currently ‘taking a breath’ through what has been a very busy period for the market.
“The IPO market is open for good quality businesses to list and there is still demand for companies with a strong growth story and realistic pricing expectations.”
Looking into the second half of the year, the IPO Eye predicts a steady supply of businesses continuing to come to the London markets.
