Scotland forecast to see more flotations
Updated: Jul 24, 2018
By Victoria Masterson
05:44, 16 JUL 2018
Scottish Business Insider www.insider.co.uk
Growing interest in capital-raising, says London Stock Exchange
The pipeline of Scottish companies planning to float will continue to grow, London Stock Exchange is forecasting.
Seventeen Scottish companies have taken part in the exchange's ELITE programme, which mentors fast-growth private businesses with ambitions to grow.
"We're seeing a growing number of companies seeking growth finance," said Marcus Stuttard, head of AIM and head of UK primary markets at London Stock Exchange.
There are currently 23 Scottish companies quoted on London's 'junior' Alternative Investment Market, which is designed to help smaller companies access capital from the public market.
Four Scottish companies have floated since November 2016 - online accounting software company FreeAgent; financial cloud computing specialist Beeks Financial Cloud; retailer Quiz Clothing and property group Springfield.
"I would expect continued growth," Stuttard said. "The number of companies that have joined ELITE is a really strong sign of them wanting to increase their profile, knowledge and access to a much wider network of business investors and advisers."
Three Scottish companies joined the ELITE programme last November.
"Once you've had a couple of initial public offerings, you often see chief executives talking to the chief executives of other private businesses, so I'd expect to see the pipeline strengthen," Stuttard added.
FreeAgent's acquisition by Royal Bank of Scotland this year - after only two years on the stock market - was a positive, Stuttard said.
"They were acquired for five times revenue and a good premium on the IPO price," he said. "Companies often come onto the market as part of an ultimate journey to either acquire or be acquired."
AIM has seen 25 flotations so far this year. Many companies go on to raise further capital after their initial public offering.
"We've seen a really strong level of further capital raising by companies on the market, so we're seeing good growth momentum," Stuttard added.
There are also 46 Scottish companies in this year's 1000 Companies to Inspire Britain report from the London Stock Exchange, which identifies the UK's fastest-growing and most dynamic small and medium sized businesses.
Nine out of ten of the largest IPOs over the last year have been international, suggesting that Brexit isn't being seen as a barrier.
Since its launch in 1995, more than 3,800 companies have raised nearly £110 billion on AIM.