It’s been a heady fortnight for Yorkshire IPOs with not one but two listings after a drought of 18 months and investors are gearing up for more action in 2014.
This week Sheffield-based software firm Servelec made its debut with an impressive 20 per cent rise in share price on its first day of trading from 179p to 215p giving it a valuation of £146.9m.
The shares are down minimally since the first day high, but the company is still worth £145m, a great outcome for investors which debuted with a value of just £122m.
Like its Sheffield-based software predecessor WANdisco, Servelec is cashing in on the strong demand for US tech companies.
Analyst Adam Lawson, at Panmure Gordon, said: “Investors’ appetite for risk has increased. We see what’s going on on the other side of the pond and the successes there.”
Servelec’s chief executive Alan Stubbs said that as a company with a strong heritage in Yorkshire, the group looks forward to representing the region on an international platform.
“In terms of operations, we are the most important infrastructure company you’ve never heard of.”
Trade analysts Megabuyte said: “The fact that there has clearly been strong demand for the offering is a very encouraging sign of investor appetite for larger, more mature technology companies.”
But it’s not just hi-tech companies that are enjoying an IPO boom.
Shares in Bonmarche, the value fashion chain that focuses on the over 50s, leapt 10 per cent on their AIM debut two weeks ago.
The Wakefield-based company priced the shares at 200p and they closed their first day at 220.5p. Since then the shares have shot up to 237p, which means the stock has gained 18.5 per cent since its float.
Like Servelec, Bonmarche has set its stall out very clearly – cheap clothing for larger ladies who are over 50.
Bonmarche is also enjoying the kudos of watching its in-house designer David Emanuel reach the heady heights of being the third favourite to win I’m A Celebrity, Get Me Out Of Here.
Bonmarche can cash in on all the current trends – women are getting bigger, Britain has an ageing population and after five years of economic gloom, value retailing is no longer a dirty word.
So who’s next? Roll up Safestyle, which is floating on AIM next week with a market capitalisation of £77m in one of the largest AIM floats this year.
The firm, best known for its advertising strapline: “You buy one, you get one free”, is one of three big double glazing players. Safestyle said its offer is comparable with rivals Everest and Anglian in terms of quality, but it can undercut them by 20 per cent because it has a lower cost base due to its sole focus on windows and doors.
Richard Naish, a corporate partner at Yorkshire law firm Walker Morris, expects to see a lot more IPOs from Yorkshire companies in the coming year.
Mr Naish, who advised Servelec on its main market IPO, said: “IPOs are looking like a favoured route for private equity exits.
“For many years the institutions were sceptical about buying out private equity following the Debenhams float, but the expectations on prices have been realigned.
“IPOs are now a viable alternative to a trade sale or another private equity buyer.”
Following three floats this month and last month, Mr Naish believes we could see five to eight Yorkshire IPOs in 2014 – in a further sign that the region has finally turned the corner.