Powering ahead

UK Equity Capital Markets update

Winter 2020

Welcome to our Winter 2020 UK Equity Capital Markets update, ‘Powering ahead’.

The Winter 2020 edition covers:

  • Stock market performance and equity issuance;
  • Macroeconomic considerations and sentiment;
  • Hot topics on founder shares, the regulatory response to COVID-19 and Company Voluntary Arrangements (“CVAs”); and
  • Case studies of Accrol Group Holding plc’s £43m equity raise to fund the acquisition of Leicester Tissue Company and the sale of Goals Soccer Centres to Inflexion and Soccerworld

These updates are aimed at management teams of companies contemplating an IPO, as well as those that are already listed, shareholders, including private equity executives, key stakeholders, including lenders, and fellow equity capital markets advisers.

UK Equity Capital Markets update - Winter 2020

ECM Update

Equity markets look forward as hopes of an effective vaccine for COVID-19 provide positive stimulus for stocks.

As at 4 December 2020, the FTSE 100 was 17.4% higher than at the end of October. November 2020 was the strongest month for the index in 30 years.

Basic Resources (largely comprising mining companies)has been the best performing FTSE 350 sector since the start of 2020. Oil & Gas was the main detractor.

Companies across all sectors have raised significant additional capital through follow-ons, particularly in Q2 2020, to weather the COVID-19 storm. However, COVID-19 has led to the requirement for additional disclosure for several companies seeking investor support.

The IPO market has returned with the £1.9bn IPO of THG. The IPO has driven increased discussion around the use of founder shares, corporate governance and the merits of a Standard listing.

In addition, we provide a summary of our most recent UK and European CFO Surveys, which show COVID-19 as the main area of concern for CFOs as corporates continue on their road to recovery.

UK equity market price performance by sector – since 1 January 2020

About the team

The Deloitte ECM team comprises professionals from our Financial Advisory, Audit, Tax and Consulting businesses with varied backgrounds including accounting, law and investment banking to provide a multi-disciplinary service model.

The team offers a wide variety of services including Reporting Accountant, acting as Independent Adviser, advising public companies on the Takeover Code in relation to M&A, providing executive remuneration and tax advice and both Readiness and Assist services to prepare for and to support an IPO.

We hope you will find this ECM update both valuable and interesting. Please do get in touch if we can be of assistance.

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