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Companies raise most money for ten years as investors dig deep during COVID-19 crisis

Listed companies have raised more than £26.2bn through both the main market and AIM

Keywords Studios PLC -
Rolls-Royce raised £2bn to tide it over the air travel slump

COVID-19 has caused a resurgence in UK Capital Markets activity, with more raised this year so far than in more than a decade according to research by Goodbody.

As of 30 October,  the Irish broker said listed companies had raised more than £26.2bn through both the main market and AIM.

That the highest level since 2009 with 463 companies topping up their coffers.

Fundraises mirrored the impact of the pandemic, Goodbody added, with both the volume and magnitude of transactions peaking in April following the first UK lockdown and beginning to increase once again as the second wave of cases gathers momentum.

Piers Coombs, Head of Goodbody’s London office, said: “In the face of crisis, we have seen investors respond brilliantly to the needs of publicly listed companies.

"In recent years, a rise of passive funds and a trend towards de-equitisation has taken the focus away from the vital role active investors play in keeping equity capital markets healthy for listed companies.

"This year has firmly reversed that trend, and through institutional and retail investors giving their backing to companies at this difficult time, thousands of jobs have been protected and businesses can plan for the future.”

Consumer-facing businesses raised most money at £11.4bn said Goodbody The rights issue by Rolls-Royce bumped up the industrial sector to £4.2bn, while the financial sector saw the highest number of companies raising funds at 95, which raised a total of £3.9bn.

The Consumer Discretionary sectors saw 70 companies raise cash including Compass Group, the FTSE 100 catering group, (£2bn)  and British Airways owner, International Consolidated Airlines Group (£1.3bn) as travel companies battled to cope with the COVID-19 restrictions.

“The sectors that have raised the most capital will come as no surprise, as retail, travel and leisure businesses have all looked to repair their balance sheets,” Coombs added.

Not all fundraises were designed to bolster balance sheets, said Coombs, and some companies raised money to expand.

Venture firm Draper Esprit PLC raised £110mln in October to continue the growth of its portfolio technology businesses while Keywords Studios PLC (LON:KWS) raised £100mln in May and was the first listed company since the onset of COVID-19 to raise equity specifically for acquisitions.

Quick facts: Keywords Studios PLC

Price: 2594 GBX

Market: AIM
Market Cap: £1.93 billion

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