One year on: how some of 2014's biggest IPOs are faring now
19th Mar 2015
A year has passed since a flurry of British retailers took the plunge and went public. Some have reaped healthy rewards from their gamble, but others have found life on the stock market much more difficult. We've taken at look at the companies a year from their stock market debut to see who sank, and who floated right to the top
AO World shares saw a 44.6 per cent spike after the white goods e-tailer went public in February last year. Its market value rocketed to £1.2 billion and investors scrambled to secure some of the hottest-tipped shares on the stock market. At the time AO World founder John Roberts sold £86 million worth of shares. However, a year on, the business has reported a share price decline of almost a third after it issued a profit warning, stating that it had been “difficult” to meet its sales growth targets. Richard Rose, AO World chairman, recently offloaded a 1.3 per cent stake in the firm – worth £10 million – earlier this month.
Nick Bubb, independent retail analyst, told The Daily Mail: “After the recent profit warning, you can't blame the poor guy for bailing out (a year on from the IPO), notwithstanding the usual PR spin that the sale 'will help to further increase liquidity and the number of shares in public hands.'”
AO World said it expects its UK full year earnings to hit £16.5million, down from an earlier forecast of £18.6million
The situation at Poundland is rather more complicated. Since the business went public and sawa 22 per cent share price spike, and a valuation of £915 million, the company has been making significant moves to establish itself as the go-to £1 shop. The ultra-bargain retailer has been happily snatching market share from across the retail sector over the past year, but it still reported disappointing sales figures in January. Shares in the chain fell 3.7 per cent after a slowdown in established outlets dragged its sales down in the three months to 28 December. So far, so underwhelming.
However, in February the budget retailer announced its intention to buy rival 99p Stores as part of its plan to build a 1,000-strong chain to cash in on the public's demand for low cost shopping. At the time Poundland CEO Jim McCarthy commented: “People are ever-more price conscious, shopping around for bargains. Through working together, Poundland will improve choice, value and service for 99p Stores’ customers, bringing Poundland’s proven knowhow and range to 99p Stores. We also believe that we can improve the performance of the 99p Stores estate and generate further value for Poundland’s shareholders.”
The fashion e-tailer soared on its stock market debut, opening at 85p – 70 per cent higher than its 50p float price – before gently returning to 75.5p. The IPO earned founder Mahmud Kamani £135 million, and his remaining 25 per cent stake in the company was worth around £210 million. The online retailer was valued at almost £600 million, and the floatation earned it a whopping £300 million.
Fast-forward to the present day and the picture isn't quite as encouraging, bur the brand still appears to be in for a relatively comfortable 2015. Boohoo.com issued a shock profit warning two months ago, but early in March it revealed a 27 per cent spike in full-year profits. “Boohoo is a fundamentally sound business operating in an attractive trading environment, but the group’s brand, marketing and IT capabilities require assistance,” Panmure Gordon analyst Mike Stewart told The Evening Standard earlier this month.
The low-budget shoe retailer floated with a valuation of around £100 million, and going public earned it £80 million. Almost immediately after the listing hit the stock market, Shoe Zone posted a set of bumper results (£2.7 million in pre-tax profit, up from £200,000 during the same period a year ago) and its earnings per share climbed to 3.7p. At the time chief executive Anthony Smith said: "Our strong market position ensures we are well placed to benefit from any growth in the UK footwear market and the Board continues to look to the future with confidence."
Shoe Zone's share price has grown steadily since the floatation (by more than 20 per cent at the end of last year) and it is now the UK's biggest volume footwear retailer. The retailer has also developed a robust e-commerce arm over the past year, and its demographics (school-age children and the elderly) have been growing along with it. The brand has entered 2015 with optimism after it opened new stores began to reap rewards from its Amazon launch last summer.
Previous InSight Articles…
- Expand and deliver?
- Five takeaways from #RBTE2015
- With great style comes great sustainability? Rachel Zoe ventures into the world of subscription boxes
- We’re lost in music: Hunter’s Regent St flagship gets immersive
- The weight of luxury heritage: Why Burberry and Mulberry tripped up this #LFW
- Playing fair: Twenty years on, where does Fairtrade go from here?
- Denim is changing - but how?
- End of Lidl and Aldi’s salad days? Kantar results find discounters' growth slows just as Tesco's picks up
- A Fresh Start: Spring has sprung at Mulberry
- Fashion rules the waves as Victoria Beckham, John Galliano and Natalie Massenet named in Debrett’s 500
- Lorna Jane hosts a work-out like no other
- John Lewis embraces omni-channel in 2015
- Should H&M be telling us “What can we do?”
- Could Etsy go for an IPO?
- Treating ourselves: Is January the new December?