After the stellar success of US tech firm Snap Inc's (NYSE:SNAP) US$28bn flotation in New York, there was a slightly more down to earth stock market debut today, when shares in the maker of homeware brands Salter, Beldray and the NutriPro smoothie machines started trading in London.
But Oldham-based UP Global Sourcing Holdings PLC (LON:UPGS) still made a solid start on the London Stock Exchange's main market, with its shares changing hands at 149p each, against an original offer price of 128p, in line with Friday's market indications for the shares to open at around 148p.
At its offer price, UP was valued at around £105mln, making it one of the largest international public offerings so far this year in the UK.
On Friday, Neil Wilson, senior market analyst at ETX Capital had said that UP’s share “look set to rise on the open with the order book said to be substantially oversubscribed and backed by broad range of institutional investors including Blackrock, Henderson, Schroders, M&G, Miton, Ennismore.”
Wilson added: “Despite Brexit concerns it looks like the market for deals is relatively undimmed. In the wake of last June’s referendum Pure Gym and TI Fluid Systems ditched plans to float and Biffa was forced to cut its price. The market looks a bit healthier now.”
UP, which had put plans for a listing on ice prior to last June’s European Union membership referendum, saw its sales and profits soar in 2016, prompting the firm to press ahead with the IPO.
Stellar growth …
Wilson noted that: “Revenue growth has been stellar, with underlying earnings before nasties for the five months to the end of last year up by 77.7% from the same period a year before.
“Growth prospects also seem solid with a large footprint in UK retail and a focus on discounters, the big four supermarkets and online through Amazon. It also supplies the likes of Argos, Shop Direct, Halfords, Homebase and others.”
He added: “A licence to sell Russell Hobbs products is important but it also has brands like Beldray, Intempo, Salter under its roof.
“International exposure also looks like a big positive and with a weak pound to boot, likely to improve.”
The firm sells in 38 countries with international sales representing 26% of revenue and it has an office in China.
In December, the group appointed Jim McCarthy, the former boss of Poundland to help steer the business through the stock market flotation.
Founded in 1997 by Simon Showman and Barry Franks, UP was previously backed by private equity firm LDC, which held a 46% stake.
LDC exited in 2014 via a management buyout, with Mr Showman UP’s largest shareholder.