The UK IPO market was so buoyant during 2005 that it has matched the activity
generated during the boom times of the 2000 and 2001 dot com era, research by
KPMG corporate finance has found.
So far in 2005, 307 new companies have joined AIM or the main board of the
Londond Stock Exchange raising combined funds of £8.3bn. This performance beat
the 102 offerings in 2001 that raised £7.8bn and came close to the £9bn taken by
251 IPOs in 2000.
Neil Austin, KPMG’s head of new issues, said the level of IPOs this year was
62% up on 2004 and reflected a strong stock market and a ‘good supply of
Austin pointed out, however, that the level of IPOs on the main market was
much lower than the record year of 2000 and that it was AIM which was driving
IPO growth, making it ‘the natural market for smaller and many mid-cap
‘AIM has again this year smashed all previous records for both number of IPOs
and total money raised. Its popularity is rising, with overseas as well as UK
companies appreciating the lighter regulatory touch and tax advantages,’ Austin
He added: ‘Despite the number of larger IPOs, over 80 percent of the new
entrants raised less than £5 million, highlighting the valuable role AIM is
playing as a provider of development for smaller emerging businesses.’
On the main market 20 trading companies raised £5bn, the largest of these
included PartyGaming (£907m), RHM (£677m), Kazakhmys (£661m), Britvic (£469m)
and Inmarsat ( £368m).
Meanwhile on AIM 287 trading companies have raised £3.4bn so far this year.
This is up from the 243 IPOs, which raised £2.3bn in 2004 making 2005 an all
time high for activity. The biggest IPO on AIM this year was Lancashire
Holdings, which raised £517m.
A large proportion of companies joining AIM, however, are small. In the last
year only 46 out of the 287 new trading company entrants raised £20m or more
each, with the remainder raising funds on average of under £5m each.
Austin said the strong level of new listings was set to continue into next
year, with a number of companies seeking listings.
‘We are entering the New Year with a strong pipeline and good investor
appetite indicating further growth. We may well see 2000’s record of money
raised broken in 2006,’ Austin said.
Companies seeking listings include petroleum company African Arabian, online
trading group CMC, life insurer Standard Life and Kazakhstan energy supplier
KazmunaiGas. Other rumoured IPO candidates for 2006 include United Biscuits,
Debenhams, 3, Experian, Flybe and Ocado.
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