IPO numbers skyrocket

The number of companies listing on the London Stock Exchange has skyrocketed
over the past year, a phenomenon that is boosting the profile of mid-tier firms
as potential advisers.

Figures from online financial services company All IPO have shown the number
of initial public offerings has jumped 64% over the previous year.

While the total number of new entrants to the LSE was just 250 between
November 2003 and October 2004 this figure jumped to 409 over the next 12

March 2005 also saw the highest number of IPOs in a month for more than seven
years, with 62 companies listing during that time.

In addition to the success of the main market, a boost in AIM listings has
added to the reputation of accounting firms that have been working on such

Philip Secrett, capital markets partner at Grant Thornton, said the success
of AIM and the number of large IPOs that firms have been heavily involved in,
will, in turn, provide opportunities on the main market in the near future.
‘There has been a degree of institutional acceptance for parties not linked to
big deals before,’ he said. ‘We’ve all grown up with AIM, allowing corporate
finance to be accessible to all firms.’

Clem Chambers, chief executive of All IPO, said it was ‘very encouraging for
the market as a whole to see this acceleration’.

He added: ‘Private investor appetite for IPOs has increased substantially
during the past couple of years. As the IPO market has strengthened, so has
demand from this sector.’

The increase in numbers has been outstripped by a huge jump in the value of
these offerings. Last year the amount raised by companies floating on the LSE
was £7.5bn, while between November 2004 and October 2005 this rose nearly 80% to

The past 12 months has seen a number of large flotations, the biggest being
the entrance to the market of PartyGaming, which was raised at £906.7m when it
listed at the end of June. Other high value debuts included Russian consumer
service provider Sistema (£717.6m), food company RHM (£676.9m) and Air China

Despite these big ticket offerings, it is the alternative investment market
that has largely been the beneficiary of the rise in IPO numbers. During the
past two years, AIM has accounted for 538 of the 659 listings, with the main
market responsible for just 97.


Pub chain calls time on debt, while telecoms group reveals rising pension
scheme deficit

Pub operator Enterprise Inns has decreased its net debt to
£3.1bn after disposing of a number of pubs. It used the extra cash from the
disposals and free cash flow of £137m to pay down its debt by £157m during the
year. The group’s debt is on a fixed interest rate of 6.9% over a period of 14

GCap Media’s pension deficit has climbed from £5.4m to £9m.
Announcing interim results for the six months ended 30 September, where the
group recorded a pre-tax loss of £10.1m, GCap said the acquisition of GWR Group
had added £2.4m to its deficit, which, coupled with actuarial losses of £1.2m,
saw GCap’s deficit increase.

Marconi, the telecommunications group, said its combined
pension scheme deficit at 30 September 2005 had climbed to £358m from £230m at
31 March 2005. The group, which announced a slight increase in group revenues
from continuing operations from £594m to £597m for the six months ended
September 30, said the £128m increase in its deficit was primarily due to a
reduction in the discount rate used for its UK plan, which was partially offset
by higher than expected asset returns. Marconi said that at the end of September
the UK pension scheme remained the most significant element of the pension
deficit at £218m, up from £109m at 31 March 2005.

Property developer Crest Nicholson has undertaken a review
of its accounting policies after converting to IFRS from UK GAAP. It has changed
its revenue recognition policy on housing units, and now recognises revenues
upon legal completion as opposed to build completion. ‘Crest sees operational
and cash flow advantages in bringing the revenue recognition point into line
with cash collection and this change also brings Crest into line with its listed
peer group,’ Crest said. If implemented in 2005, the policy would have increased
profits by more than £10m because of the unusually high numbers of apartments
which were not legally completed until 2005.

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