Sir Terry Leahy returns to stock market with £2.7bn B&M listing

(John Lawrence)

Former Tesco boss Sir Terry Leahy made a successful £2.7 billion return to the stock market today chairing discount retailer B&M Bargains, with fellow retail titan Sir Philip Green hot on his heels.

B&M is now worth more than Dixons, Ocado and Home Retail Group. Founders Simon and Bobby Arora and private-equity firm Clayton Dubilier & Rice picked up £1 billion while the brothers are still sitting on shares worth £810 million. B&M rose 18p, or 5 per cent, today to 288p, adding to their paper wealth.

However, the retailer will be keen to avoid a similar fate to other recent stock-market additions, who have nearly all seen their share prices fall following huge valuations that have left some analysts scratching their heads.

Meanwhile flash sale business MySale, whose largest investor is Arcadia boss Sir Philip Green, has also said it plans to list on Monday. The price has been set at 226p, valuing it at £340 million.

Two recent IPOs, Pets at Home and fashion website Boohoo.com, revealed their maiden results today but despite strong sales both saw their share price remain below the flotation levels.

Pets at Home saw full-year sales jump 11.2 per cent to £665 million, with like-for-like sales up 2.4 per cent, but pre-tax profits fell 15 per cent to £22.5 million as it spent £40.7 million on IPO costs. The shares rose 2.9p to 219.9p, but are still 8 per cent down on the flotation price of 238p.

Chief executive Nick Wood said sales of advanced nutritional pet food were strong, despite customers still not feeling the effects of the economic recovery. Private-equity owners KKR faced criticism at the flotation because all the money raised was to pay down debt.

But Wood said: “We don’t need external capital to grow. We can grow as fast as we need to with our own cash flow.”

Boohoo.com, saw its full-year sales jump 63 per cent to £110 million, with pre-tax profits up from £3.2 million to £10.7 million. It spent £14 million on the IPO and put the strong growth down to a marketing push which has seen its advertising spend jump to 17.7 per cent of sales from 14.2 per cent. The shares were up 4.2 per cent to 47.9p but have slumped 34 per cent since its listing price of 70p.