Summary List Placement
Iconic British bootmaker Dr. Martens has announced plans to float on the London Stock Exchange, firing the starting gun on what analysts say is set to be a “very strong” year for initial public offerings in the UK.
Dr. Martens’ owner, private equity group Permira, bought the brand in 2013 in a £300 million deal. The brand has since caught the eye of customers around the world, selling more than 11 million pairs of shoes in more than 60 countries each year, racking up £672 million ($905 million) in revenues in the year ending March 2020.
The bootmaker’s plans for a public debut is one of the first signs of the IPO bonanza that many analysts have predicted in 2021.
With the coronavirus pandemic rocking the global economy, UK IPOs slowed sharply in the first half of 2020, though new listings bounced back as markets soared in the second half of the year. Total funds raised through IPOs increased 31% year on year in 2020 to £9.4 billion, according to EY.
UK stocks have already risen more than 6% this year amid positivity over coronavirus vaccines and after the signing of a Brexit deal, making listings more attractive.
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The UK is still “in an abyss” economically but “there has been a rebound in investor confidence,” Susannah Streeter, equity analyst at Hargreaves Lansdown, told Insider.
“Also I think there has been this real flurry of interest, particularly for a lot of tech IPOs, because of the success that we’ve got from Airbnb, for example, and [US food delivery service] DoorDash.” Both listings resulted in eye-watering increases in share prices, offering lucky investors huge profits.
Dr Martens flagged its online credentials in its statement to the market on Monday. Online sales made up 20% of revenue in the year ending March 2020, compared to 7% in 2015.
Kenny Wilson, chief executive of Dr Martens, said: “We have invested massively to ensure that we deliver the best digital and store experiences to connect with our wearers, and through this we are driving our long term, sustainable growth.”
Elsewhere among possible IPOs, food delivery service Deliveroo is among the online-focused firms that could float shares in the UK this year. Reviews website Trustpilot is another talked-about contender for a public debut. In the US, dating app Bumble and grocery delivery company Instacart could list.
EY’s UK IPO leader Scott McCubbin said in a note to clients: “Looking to the year ahead, we can expect 2021 to be a very strong year for the UK IPO market.
“An uptick in IPO activity may well intensify the competition for investment, placing greater emphasis on preparing early for IPO and raising profile with investors. Confidence continues to build with the Brexit deal now giving clarity around the future relationship with Europe and the roll out of COVID-19 vaccinations.”
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Source:: Business Insider