London is heading for a record year in terms of initial public offerings, despite the waning of enthusiasm for some flotations earlier in the year, according to new analysis.
Capita Asset Services, a subsidiary of the FTSE 100 outsourcer, estimates that main market IPOs will raise £11.7bn this year, more than any 12-month period since 1998, the year the group started recording this information.
Taking into account the amount raised by companies quoted on London’s junior Aim market, the total reached by UK companies is expected to reach £18.5bn, more than twice the amount raised in 2013.
The research suggests that the number of IPOs in the main London market will be the highest since the previous peak of 72 in 2000. There have already been 30 listings this year, with an emphasis on consumer-focused stocks such as the white goods retailer AO World; Saga, the travel and insurance group for the over-50s; and the fast-food portal Just Eat.
Justin Cooper, chief executive of the arm of Capita that deals with IPO administration, said that the likely 2014 total reflected a healthier market than the £8.7bn in 2011, which was disproportionately boosted by the £6bn listing of Glencore Xstrata.
“In 2011, there were just six main market listings excluding Glencore, compared to 30 already this year,” he said.
Though the IPO market started strongly this year, investors lost their appetite for some of the new arrivals, which found their shares trading below the flotation price. Some companies, such as the low-cost airline Wizz Air and the clothing group Fat Face, pulled their flotations after several new issues were poorly received.
It is also clear that the possibility of a vote for Scottish independence this week could affect the prospects for new listings, as companies considering IPOs think about the legal framework in which they may be operating in just a couple of years’ time.
“New companies coming to market would need certainty as to the infrastructure and governance requirements for public companies, both in the short term after any potential Yes vote and for the longer term before they committed to the IPO process,” Mr Cooper said.
“Scotland’s potential does remain a cloud on the horizon, although there is already a strong pipeline of prospective issuers ahead,” he added.
Possible IPO candidates this year include UK breakdown group RAC; the finance group Virgin Money; the challenger bank Aldermore; United Biscuits, which makes McVitie’s Digestives and Jaffa Cakes; and the shoe designer Jimmy Choo.