UK IPOs surge in best post-crisis performance
The number of U.K. companies opting to float on the stock market has risen this year to its highest volume since 2007, according to new research, marking an improvement in funding conditions as the economy recovers.
The volume of initial public offerings (IPOs) currently stands at $7.2 billion year-to-date, according to Dealogic, which includes 39 deals. This puts the U.K. into fourth in the global rankings in terms of volume and the highest in the EMEA (Europe, the Middle East and Africa). At the same point last year, the U.K. was ranked just fourteenth globally.
In 2007, there were 98 IPOs in the U.K. which managed to raise $14 billion. That was followed by years of low confidence and deleveraging following the global financial crisis.
On Friday, real estate agent Foxtons became the latest in the long line of IPOs this year, pricing its London listing at the top of its range. The sale of the 60 percent stake in the company was oversubscribed and raised £335 million ($537 million). It was the largest U.K. real estate IPO since the 1999 floatation of Canary Wharf Group, which raised $988 million.
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There are more IPOs in the pipeline as the U.K. economy shows increasingly bullish signs of recovery compared with the doom and gloom of previous years.
The Royal Mail, Britain's nearly 500-year old postal service, is expected to launch an initial public offering in October, despite being bitterly opposed by the country's opposition party. The float is considered to be essential for the survival of the service, which has seen revenues hit by the rise of email, and by competition for lucrative delivery services from rivals like TNT.
ECI Partners, a private equity firm, said on Monday that the results of its latest survey showed a "dramatic" improvement in funding conditions for U.K. companies. Fifty four percent of companies polled said they expected it to be "easy" or "very easy" to obtain growth finance over the next 12 months, up from 36 percent in 2012. Forty one percent said they would likely look to public markets to finance growth, an increase from 9 percent in 2012.
"ECI has experienced first-hand the impact of the improving economy on growth businesses, with double-digit increases in revenue, profit and headcount across our portfolio, and three successful exits over the last twelve months," David Ewing, a managing partner at ECI Partners said in a press release.
Strong flows back into European equities - at the expense of U.S. and emerging market equities - is seen as just one of the key reasons why capital markets have bounced back in the U.K.
Societe Generale said they have seen a resurgence in mergers and acquisitions (M&A), and not just in the U.K. The French bank said the activity seen this year could prove to be a new global wave that could match the tech boom of the early 2000s.
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"This time most sectors should be involved as corporate confidence has already returned since econom
"M&A activity reached $4.6 trillion in 2007 and then halved in only two years. From 2009 until 2012 the market remained broadly flat. We are now seeing clear signs of a recovery with several deals announced recently."
—By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81