This is clearly good news for the City. Institutions are happy to stump up the cash for good businesses - and the right entry price - which helps the dwindling number of smaller brokers and advisors. In fact, it's generating business all round. One well-known financial PR told me they've pitched for three times as many jobs on new issues this year. They haven't won them all, but expect the flow of IPOs to carry on well into the autumn, they say.
We've had a few biggies this year already. Crest Nicholson (CRST) is back. Insurer Esure (ESUR) and estate agent Countrywide (CWD) followed, and the Coalition government is on track to deliver Royal Mail to the market in a £3bn privatisation in a few months time. But there's a veritable smorgasbord of businesses to choose from further down the food chain. And, typically, the ones I've talked to fancy their chances.
Shameless plug
Chargemaster makes charging points for electric vehicles. You may have seen them at your local Asda, Waitrose or Sainsbury's, but I'll bet not many of you have seen anyone using them. That's because few of us own energy saving cars yet. But that is changing fast and the opportunity for Chargemaster is significant. Existing subsidies mean they're virtually giving them away, yet Chargemaster makes money on every one.
It's already supplied over 6,000 to energy providers and the motor industry, and tough emissions targets are driving the big manufacturers to make greener vehicles with at least some kind of domestic charging requirement. The Coalition, meanwhile, is throwing £37m at the sector and wants 122,000 charging points here by 2020 - every service station will have them. The Europeans reckon they'll have spent €8bn (£6.9bn) on 795,000 by then, and that the industry there will be worth $1bn (£651m) a year soon after.
And, in a significant twist, BMW has thrown its considerable weight behind the nascent electric vehicle industry and bought a stake in Chargemaster – rumoured to be about 2 per cent. That looks like money well spent. Last year, the company turned over £3.6m and made £1.24m gross profit. With little competition and global charging point sales of 4.1m worth $3.4bn predicted by 2021, growth could be rapid. If the float early next month raises the £6m it’s after, the business will be worth about £32m.
Eavesdrop on this one…
If my information is right, GOS Systems, a supplier of intelligence gathering and secure communications technology, will beat them to it. A well-connected management team want to prise £8m from investors for a £20m-£30m venture set up 18 months ago to breathe life back into a collection of niche high-tech businesses that had lost their entrepreneurial flair.
And that money will help bring a fourth business into the fold. Deltenna has designed a mobile base station little bigger than a smartphone that exploits new 4G technology, and defence primes are eager to talk. It has technology that most UK police forces use to identify criminals, and other gadgets that it’s unable to discuss in detail. It's already a global business, but clearly there's lots of money to be made in the Middle East and Asia, hence plans to open up shop in Dubai and Singapore soon.
GOS claims its pipeline is substantial and is inundated with opportunities. Greater scale and business acumen suggests there’s lots of growth potential here, and a bundle of cash will strengthen the weak balance sheet - intangible assets currently make up two-thirds of the total. A number of deals are said to be nearing closure, too, but we’d like to see some evidence after the 2 August float before making the shares a target.
Cheap plonk anyone?
Drinkers in the North-West have been downing cheap booze for years, but if Diana Hunter gets her way the rest of us can stop moaning about London prices and enjoy a drink for less, too - responsibly of course. She runs Conviviality Retail, owner of the Bargain Booze chain, which has just raised £64m from a placing at 100p a share ahead of its Aim float next week.
There are already over 1,000 own-stores and franchisees and enough existing warehouse capacity to cope with double that. And Ms Hunter might need it. Some of the new cash will pay for a march - or stagger - south away from its northern heartland. The business model is simple and easily replicated, so the only question mark concerns demand. And of that there is little doubt.
Bargain Booze will fill a void left by Threshers, Oddbins and Wine Rack which have all gone bust, and is only partially filled by independent off licences and more expensive supermarket convenience stores. Much, however, will depend on your tipple. Our quick survey revealed a 12-pack of Stella for £9 is cheaper than the supermarkets. So is Strongbow. But oddly Boddingtons costs more and a pack of four Bacardi Breezers is no cheaper than Asda. Cheers.
Keep 'em peeled
With Facebook's (US: FB) farcical float still the stuff of nightmares, other big hitters like Twitter, Dropbox and Spotify are avoiding the money men on Wall Street. That said, gossips reckon Twitter will list early next year at something like $11bn. In the meantime, plenty more minnows are honing their sales pitch ahead of investor roadshows this side of the pond. Versarien (VRS), Keywords Studio (KWS), AB Dynamics (ABDP), Golden Saint Resources (GSR) and PLUS 500 have made it already. Dutch casino games developer 24/7 Gaming Group and onshore UK oil explorer Union Jack Oil hope to join them next week. Watch out.
