Scottish companies absent as London IPO market hits ten-year nadir

Last year was the quietest in a decade for London stock market flotations but 2020 is likely to see an upturn in activity, according to a report released today.

Among the largest IPOs in 2019 was rail ticket booking service Trainline.com. Picture: Jane Barlow

During 2019, there were 35 initial public offerings (IPOs) listed in London – 24 on the main market and 11 on the Alternative Investment Market (Aim) – raising some £5.9 billion, EY’s latest IPO Eye tracker reveals. There were no new Scottish listings.

That compares with 79 listings overall in 2018 – 44 on the main market and 35 on Aim – raising £9.5bn.

Notably, the reduction in Aim admissions was particularly prominent, EY said, and continues a downward trend that began in 2018.

In terms of funds raised, the largest IPOs in 2019 were Network International (£1.2bn) and Trainline.com (£1.1bn), which were both previously backed by private equity.

Mike Timmins, EY Scotland’s IPO leader, said: “Amidst unprecedented geopolitical uncertainty, 2019 was a challenging year for the global public markets, and London was not alone in experiencing a downturn in activity.

“That said, we did see some high-profile listings in the UK last year raising significant funds, with the majority performing well post IPO.

“Scottish IPO’s remained dormant with no new listings in the last 18 months but it remains a viable option to access capital and we are aware of many that are considering a listing this year.

“But despite market uncertainty and volatility, IPOs remain an exit route for private equity compared to trade deals – 53 per cent of all IPO proceeds raised in London were from private equity backed companies, compared to a global average of 29 per cent.”

Buoyant

He added: “With the general election now behind us, and more certainty around the UK’s position on Brexit, we can expect more buoyant IPO markets in 2020, particularly in the first half of the year.

“However, markets are expected to become more volatile leading up to the US presidential elections in the second half of 2020.”

In the last quarter of 2019, eight IPOs listed in the UK (five on the main market and three on Aim) raising £1.1bn, accounting for less than a fifth of the total proceeds raised in the entire year.

Globally, 1,127 IPOs registered last year, with proceeds of $202bn (£156bn) – a 19 per cent fall in deal volume and a 2 per cent decrease in proceeds compared with 2018.

In 2019, nine international companies chose London as their destination to launch an IPO, reaffirming the UK capital’s status as a leading international listing venue, with the UK ending the year ranking fifth behind the US, China, Hong Kong, and Saudi Arabia in terms of overall funds raised.