Blackfriar: 2014 could be the year of the IPO throughout Yorkshire

Right now it feels like this could just as easily apply to the Yorkshire IPO market.

You wait ages for one and then you get not one, but two, hot on its heels.

Bradford-based Safestyle is joining Sheffield-based software firm Servelec and Wakefield-based value fashion chain Bonmarche, which both recently floated.

Safestyle had an impressive first day of trading. Its shares shot up 38 per cent, a rise of 38p to 138p, on its first day on AIM after the float was heavily oversubscribed and over 10 million shares were traded.

Its plan is to increase its geographical presence into the south of England. At the moment 50 per cent of its sales are in the north and the Midlands with only 50 per cent in the south and south east. Its key targets are Greater London and other parts of the south and south east of England.

The company floated with a market capitalisation of £78m, making it one of the largest AIM floats this year, but how does its performance compare with its Yorkshire peers?

Servelec made its debut last week 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 stock closed yesterday at 211.5p, which means the shares are up a very decent 18 per cent since the float.

Like its Sheffield-based software predecessor WANdisco, Servelec is cashing in on the strong demand for tech companies.

Shares in Bonmarche, the value fashion chain that focuses on the over 50s, leapt 10 per cent on their AIM debut three weeks ago.

The Wakefield-based company priced the shares at 200p and they closed their first day at 220.5p.

Last night the shares closed at 233.5p, which means they are up 17 per cent since the float, which is another credible performance.

However it looks like Safestyle, following such an impressive debut, could beat its Yorkshire peers.

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.

Asda unveiled its plans for Christmas in London yesterday and reported an “incredibly strong” year for online sales.

The Leeds-based grocer reckons that 50 per cent of its customers will shop online as well as instore this festive season.

Without doubt arch-rival Morrisons will be hit hard this Christmas by its lack of online offering, but it has laid out ambitious plans for its web based service which will launch next year.

If its plans work, it is going to knock its rivals into a cocked hat.

The big issue with all online retailers is delivery – delivering what customers ordered, with good sell-by dates and at the time they were supposed to be delivered.

It appears that Asda has a lot to learn on this subject.

While it may be doing a great job in the north, its online delivery service needs to improve in the south.

Anecdotal evidence suggests that around half the orders are being substituted and Blackfriar’s own experiences of the service have left much to be desired. The problem is that everyone Blackfriar has talked to has said the same thing – Asda is not living up to its service promise south of Watford.

The big problem seems to be in the sourcing.

Asda sources from a nearby store where there will always be spaces on shelves.

Morrisons will source from massive delivery centres stuffed to the rafters with products. It also has a secret weapon – Ocado, which has an incredibly sophisticated IT system to back it up.

We will see if Morrisons can deliver what it is promising early next year when the service is launched in Yorkshire.

But if it does deliver, Asda will need to buck its ideas up.