A £1bn stock market float and strong start for latest IPOs
This year has been much better for new stock market listings, and there’s much more to come.
25th May 2021 13:02
by Graeme Evans from interactive investor
This year has been much better for new stock market listings, and there’s much more to come.
A £1 billion-valued home furnishing brand popular with millennial and Gen Z shoppers today joined a growing list of companies capitalising on the fashion for London IPOs.
Made.com, which sells 6,000 furniture and homeware products in the UK and seven European countries, confirmed its intention to list on the main market of the London Stock Exchange.
The business, which was co-founded in 2010 by former Lastminute.com boss Brent Hoberman, generated £315 million of sales last year for growth of 30%. The start of this year has seen the rate accelerate to 63%, helping losses for the quarter narrow to £1.8 million.
It is expected that Made.com will be valued at close to £1 billion when details of its IPO pricing are revealed in the coming days. The group's data-led technology platform results in a “just-in-time” supply chain that uses predictive modelling, meaning 59% of products are pre-sold on arrival at its warehouses.
Nine new collections every week and the renewal of about 40% of its range every year further boost the brand's appeal in a crowded marketplace, particularly among “digitally native customers”. Millennials and Gen Z buyers comprise over 45% of its total customer base.
The planned stock market debut comes amid signs that investors have quickly moved on from the IPO flop of Deliveroo (LSE:ROO) and are focusing instead on encouraging debuts by newcomers including Dr Martens (LSE:DOCS), Moonpig (LSE:MOON) and cyber security firm Darktrace (LSE:DARK).
Monday's start of trading also brought two smaller floats, with financial services advertising business Dianomi (LSE:DNM) particularly popular after surging from its opening price of 273p to 325p at lunchtime today. The placing of shares on AIM initially valued the business at £82 million.
It operates from offices in London, Sydney and New York, with its services providing over 400 advertisers including Aberdeen Standard Investments, Invesco and Baillie Gifford with access to an international audience through finance content platforms such as Reuters.
Chief executive Rupert Hodson said demand for native digital advertising has grown substantially over the last five years: “However, a key focus for advertisers is on delivering premium advertising content that people want to see in publications people want to read, an area where Dianomi excels.”
The AIM arrival of convenience stores supplier Kitwave Group (LSE:KITW) has been a little more measured after shares were placed at 150p to raise £64 million for the company and £17.6 million for selling shareholders. They were changing hands at 155p today, giving the company a valuation of about £107 million.
Kitwave, which generated revenues of £399 million and adjusted earnings of £17.5 million in the year to April 2020, is only the second food and drink wholesaler to be listed after Booker, which is now owned by Tesco.
It was founded in 1987 following the acquisition of a single site confectionery wholesale business based in North Shields, where it is still headquartered. The company now delivers food, alcohol, groceries and tobacco to about 38,000 mainly independent customers.
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Co-founder and CEO Paul Young believes that trading on AIM will support the company's buy-and-build strategy after the acquisition of 10 wholesale distributors since 2011.
He added: "With the considerable experience across our board and senior management team, we strongly believe that we are well placed to generate shareholder value.”
Kitwave's addressable market is estimated to be worth over £28 billion, rising to £32.6 billion by 2025. The group stocks about 33,000 products from over 300 different suppliers, including key partners such as Unilever (LSE:ULVR), Molson Coors Brewing and Walkers Snacks.
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