The conservative pricing of the placing which launched software group FI on the stockmarket yesterday ensured a handsome profit for a handful of institutional investors as the shares jumped to an immediate premium. They closed at 300p, 65p above the placing price.
Other beneficiaries of the flotation included Mrs Steve Shirley, who founded the company in 1962 and still owns 5.3 million shares in FI. Her stake was worth over pounds 15m at yesterday's closing price.
Hilary Cropper, chief executive since 1987, saw the value of her 917,000 options soar. The exercise price of those options, which were granted between 1988 and 1993, range from just 27p a share to 44.9p a share. In addition to her options, Ms Cropper has a beneficial interest in 764,000 shares, worth more than pounds 2m.
The flotation also created a valuable share stake for Sir Peter Thompson, the former chairman of NFC and since 1990 FI's non-executive chairman, whose 890,000 share holding is worth almost pounds 2.7m. Deputy chief executive Jo Connell's holding was yesterday valued at pounds 1.5m.
A buoyant market debut had been expected for FI after initial soundings by joint sponsors UBS and Granville came up with demand for six times the 7.9m shares that the company finally decided to place.
Investors focused on the strong growth in profits from FI in recent years as it has cashed in on the increasing trend for companies to contract out their information technology requirements. Unlike some other parts of the computer sector, the facilities and applications management work that FI specialises in has reliable, predictable and currently fast growing revenues.
Although the price at which FI closed yesterday represents a substantial multiple of forecast earnings for the year ending this month, strong profits growth in the year to April 1997 is expected to bring the rating lower.
On the basis of forecast earnings of 11.3p this year the shares stand on a prospective p/e ratio 27, well in excess of the ratings enjoyed by most of FI's peers, including Logica, Capita, Misys and Sema.Reuse content