Positive outlook for Northern IPO market despite “challenging” year
“FOR the North to become a global powerhouse, it is important that its companies are well represented on the London markets,” says David Buckley, EY partner in Yorkshire in the North East, following its IPO Eye report into public companies.
Though EY found that the number of IPOs from the regions fell by a third in 2015 compared to the year before, the outlook for Northern company listings is “positive” according to the firm.
The report shows that 10 companies from the North of England raised £2.07bn through listings on AIM and the main market in 2015.
In contrast, there were 15 IPOs from Northern companies in 2014, which raised total funds of £3.33bn – around a quarter of the total value raised on the stock exchange that year.
Manchester-headquartered Auto Trader Group raised £1.59bn in March which was the second largest IPO of the year, beaten only by London-based Worldpay Group, which raised £2.48bn in October 2015.
Doncaster-based DFS Furniture floated in March and raised £220.8.
Other notable Northern IPOs include the Revolution Bars Group, which raised £86.0m in March and Sunderland-based ScS Group, which raised £35.7m in January.
Five AIM listings by companies based in the North of England generated a total of £41.8m in 2015.
Across AIM and the Main Market in 2015, 60 listings raised £10.5bn, compared with 93 listings and £13.0bn raised respectively in 2014.
David Buckley, EY partner and IPO leader in Yorkshire and the North East said: “A slowdown in emerging markets, the prospect of a US interest rate rise and the lead up to the general election all caused some short-term volatility that contributed to a more challenging 2015 for Northern IPOs, compared with a bumper 2014.
“Over the next 12 to 18 months, we’re very positive about listings in the UK – and particularly for Northern firms. We’re speaking to a wide range of companies who are serious about floating in the next two years.
“It is the specific characteristics of the individual companies which is driving their success on the public markets, rather than general investor sentiment, and there are a broad range of strong corporates ready to make the step up to the public markets here in the North.
“Companies in the construction, technology, media/entertainment and financial sectors have proved to be generally attractive this year. We expect this to continue with the potential return to strength of the retail sector.
“Given the strong performance overall for newly listed shares, against the overall performance of the FTSE100, we expect investors to still have an appetite for IPOs.
“For the North to become a global powerhouse, it is important that its companies are well represented on the London markets, with listed businesses helping to generate new investment, wealth and jobs in the region.”
