Carpetright's flotation generates heavy demand

SIR PHILIP HARRIS, one of the doyens of British retailing, scored another success yesterday when the flotation of his Carpetright group was oversubscribed more than two-and-a- half times, writes John Murray. Dealings begin today.

There had been fears that the shares were overpriced at 148p, despite Sir Philip's popularity with investors. That price valued the carpet retailer at pounds 113m and was 21 times last year's earnings. But the company argued that its profits had grown apace since it was founded in 1988, trebling to pounds 7.8m in the year to May.

The flotation was designed to allow some of the original backers, including Sir Philip who had 38 per cent, to realise their investments. MFI, the furniture group, sold its 20 per cent stake, raising pounds 21.5m. The float involved the placing of 39 million shares with institutions, with 13.7 million offered publicly. The company issued 6.76 million new shares to raise pounds 8.9m, which will redeem preference shares held by the founders.

Sir Philip founded Carpetright four months after selling his Harris Queensway business to Sir James Gulliver's Argyll Group in 1988. It now has 116 stores, which turned over pounds 78.6m in the year to 1 May.

Metrotect Industries, a pipeline coatings maker based in West Yorkshire, is to list on the main market of the Stock Exchange, via a placing. Panmure Gordon is placing 13.89 million shares at 108p, valuing the company at pounds 26m. Panmure said dealings were expected to begin on 28 June.