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Highlights
- Online electrical appliances retail company Marks Electrical is planning an IPO on AIM later this month
- The company expects to have a market valuation of about £175 million
Online electrical appliances retail company Marks Electrical is mulling an initial public offering (IPO) on the London Stock Exchange’s (LSE) junior market, the Alternative Investment Market (AIM).
The company’s plan to float on the market comes after it witnessed strong sales growth amid a pandemic induced online shopping boom.
Marks Electrical IPO
The company is expected to get admission into the AIM exchange in late October. Marks Electrical is expected to have a market valuation of about £175 million, according to estimates.
UK based capital markets company Panmure Gordon (UK) will be the nominated advisor and sole broker for the listing.
The company plans to use the proceeds from this public capital raise to help boost the company’s growth, including improving brand awareness and increasing its warehouse capacity.
Marks Electrical was founded by Mark Smithson in 1987. Mr. Smithson, who is also the CEO of the company, said:
The company has made 3 new appointments to its board, ahead of its IPO. It recently hired UK based drinks company Nichol’s CEO, Marnie Millard, as a non-executive chairman.
The company also appointed ex- Ernst & Young senior partner David Wilkinson and Alyson Fadil, the head of human resources at online womenswear brand N Brown Group, as non-executive board members.
Marks Electrical financial performance
The Leicester based company’s FY 2021 revenues rose by 78 per cent on year on year basis, touching £56 million.
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The company’s FY 2021 profits before tax rose to £7.1 million, up from £790,000 in the previous year.
Marks Electrical’s market share in the UK domestic appliance rose to 1.22 per cent, up from 0.76 per cent in the past year due to the aforementioned strong sales growth during the lockdown. The domestic appliances market size in the UK is about £5.3 billion.
It also reported strong growth in the first half of this current financial year, with revenues increasing by 78 per cent, compared to a revenue growth rate of 47 per cent in the year before.
The company now has a staff strength of 110 people.
Bottom Line
The UK IPO market has boomed this year; however, some stocks have lagged post listing while some have been very successful since their debut, more than offsetting the performance of the laggards.
The 10 or so top-performing UK IPOs this year have outperformed the UK mid cap index, the FTSE 250 index. Thus, investors have called for IPOs to be priced at a discount to maximise their investments in a public listing.
Moreover, the pandemic induced lockdowns have caused a major shift in consumer behaviour as customers increasingly turned towards online shopping, giving retail companies a boost.
