Northern IPOs make up quarter of total funds raised on market this year

The flotation of Northern companies were amongst some of the largest this year

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Virgin Money chief executive Jayne-Anne Gadhia

A bumper year for the flotation of Northern companies has been spurred by private equity investors looking for lucrative exits.

Analysis of the public markets in 2014 by EY shows listings of companies based in the north of England made up a quarter of the total value of funds raised on the market.

The North boasted the largest IPOs on both AIM and the main market by market capitalisation on admission.

North East movements included December’s £106m flotation of County Durham drug manufacturers Quantum Pharmaceutical and November’s £1.25bn flotation of Virgin Money.

EY’s IPO EYE research showed the North hosted 15 flotations with a combined value of £3.33bn during the year.

The £1.08bn listing of discount retailer B&M Bargains was the second largest on the main market by value raised, and the largest by market capitalisation on admission.

Manchester-based online fashion retailer Boohoo.com’s £300m listing raised the most funds and had the biggest market capitalisation on AIM.

Six northern companies listed on the main market including B&M Bargains, AO World, Pets At Home, Card Factory, Polypipe Group and Clipper Logistics.

On AIM, there were nine Northern IPOs, including Boohoo.com, ENTU, C4X Discovery, DJI Holdings, Flowtech Fluidpower, Manx Telecom, Xeros Technology Group, 4d Pharma and Pharmaceutical, with a total value of £699m.

David Buckley, Transaction Support partner and IPO leader at EY in Yorkshire and the North East, said: “The stabilising economy and an inflow of cash rich institutional investors opened the IPO market at the back end of 2013 and helped it to what has been an outstanding 2014 overall. This was buoyed by private equity firms rediscovering the IPO market as lucrative exit route for assets they had been holding on to throughout the downturn.

“Companies with market differentiation, robust profitability, strong management and good expansion prospects have led the way for the region and the market as a whole, while innovative technology and pharma companies have listed and performed well on AIM.

“For many, 2014 will be remembered as the year when a host of outstanding Northern businesses helped to lead the revival of the London markets. However, it will also be remembered as a year of two halves, with the public markets cooling down significantly from September.”

EY’s research noted a slowdown in northern IPO activity in the second half of the year. Virgin Money delayed its own listing amid turmoil in the market.

Mr Buckley added: “Next year’s general election, geopolitical risk and the economic slowdown in Europe have created uncertainty over the last six months of 2014, and some investors have retreated from the market.

“There is an element of uncertainty and investors are being more selective. However, for exceptional businesses that are clearly differentiated and have strong, proven profitability, the IPO market remains open.

“Some dealmakers may even look to get IPOs away ahead of next year’s general election. No clear winner on May 7 2015 could result in a significant market lull thereafter, and many companies may want to pre-empt this by listing in the first quarter.

“We are anticipating reduced activity in Q2 and Q3 2015 as a result of the uncertainty of the upcoming general election and the traditionally quiet summer period.”

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