The Week Ahead: Fewer Footsie newcomers amid the Eurozone fears
After the Diamond Jubilee festivities, things will be rather quiet in the Square Mile for the rest of this severely curtailed week. An opportunity, perhaps, to take a look at the fortunes of newcomers to the market this year – and those who have failed to make it.
So far, 2012 is on the way to becoming the third consecutive year in which the number of London IPOs has dipped. Twenty-six companies were floated over the first five months, compared with 30 and 34 during the same period in 2011 and 2010. By comparison, 2008 saw 45 IPOs between January and May, although the following year there were just two.
The biggest – and arguably most high-profile – debut was that of Ruspetro, which also happened to be the first of the year. After watching fellow Russians Polymetal and Evraz enter the Footsie near the end of 2011, the oil producer raised £162m in January before becoming a FTSE 250 stock in March.
In terms of its performance, while the group remains above its 123p float price, it has dropped more than a third since since reaching a peak of 230p in April.
Of course, much of that fall can be put down to the recent market turmoil as Eurozone fears have once again taken hold. Its been enough to scare off some, with state-controlled train operator Georgian Railway pulling its planned £159m float last month.
Another to slam on the brakes was O1 Properties, the Russian real estate company that was believed to be aiming to raise around $400m.
Meanwhile, the City is still waiting for Polyus Gold. Russia's largest gold producer has been selling stakes in order to increase its free float ahead of its planned full listing, which it now expects to take place this month.
Corporate releases are certainly rather thin on the ground today, although easyJet will be releasing its monthly passenger figures. Over April the budget airline managed a year-on-year increase of 8.6 per cent, an improvement on March and February when it posted growth of 4.4 per and 3.7 per cent respectively.
On Thursday shareholders in International Power will be voting on the deal for French utility GDF Suez to take hold of the 30 per cent of the energy group it does not already own. Given the price agreed of 418p-a-share – up from GDF's earlier 390p offer that had been rejected – is more than 20 per cent higher than International Power's share price before whispers of such a deal started strengthening in February, there is not expected to be much opposition.
Also in focus will be Johnson Matthey, with the catalytic converters supplier unveiling its final results. The blue-chip group last announced figures in February when it said third-quarter profits had jumped by more than a third, while it also predicted its numbers for the second-half of the year would be "slightly ahead" of its performance over the first six months.
Results/Updates International Airlines Group, Johnson Matthey, Punch Taverns, RWS Holdings, Synergy Health and WYG.
It is the turn of SThree on Friday with the small-cap recruiter publishing its trading update for the first-half of the year. Shore Capital's David O'Brien notes that growth in northern Europe is likely to have slowed over the second quarter, and adds that there will be "question marks over the outlook on the continent in the third quarter in view of a number of countries moving towards recession".
Also bringing the week to an end will be full-year results from trains and Scalextric group Hornby. The small-cap firm has already released two profit warnings this year thanks to tough trading in the UK, with it predicting in April it would manage pre-tax profits no less than £4.5m. However, chairman Neil Johnson was positive over its range of London 2012 Olympics merchandise, so the performance of these lines could provide some cheer.
Results/Updates Bellway, Hornby and SThree.
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