Capital raising in the city resumes despite continued disruption from Covid, as listed companies attract nearly £ 25bn this year



Wednesday, December 29, 2021 7:19 AM

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UK listed companies raised more than £ 12bn in new capital from investors in the second half of the year, bringing the total so far for 2021 between January and November to £ 24.7bn , according to data shared with City AM

This represents the second highest total since 2009, after 2020 when £ 34.4 billion was raised.

As Covid lockdown measures took place in 2020, the City first saw companies look to their investors to rebuild their balance sheets and capitalize on opportunistic growth opportunities, with capital raising reaching the highest level in a decade.

However, although strict lockdown measures have eased, capital market activity has remained high from pre-pandemic levels.

Analysis of London Stock Exchange data on investment bank Goodbody tracking issues shows that in the second half of this year, 202 companies raised new capital.

Capital raising on London’s Alternative Investment Market (AIM) has been particularly strong, with £ 6.3bn raised since the start of the year, the highest level since 2007.

“Two years after the start of the pandemic, capital raising from listed companies in the UK is continuing at a record pace,” said Piers Coombs, head of Goodbody’s London office.

Coombs said City AM: “Whether sectors have been negatively affected by the pandemic or have started to see new opportunities over the past 12 months, investor support has been invaluable to UK listed companies and their management teams. “

“This is expected to continue in the face of current variants of Covid-19 and we can expect capital market activity to continue to operate above pre-pandemic levels over the coming year,” he continued.

Consumption, real estate and finance

Excluding closed and open listed investment vehicles that invest in a variety of sectors, companies in the consumer discretionary sector raised the most capital, at over £ 5.5bn during the year nowadays.

This industry classification includes sectors such as automotive and household goods as well as the travel and leisure sector. Next came the property sector, which raised £ 2.9bn, and financial services, which raised £ 2.5bn.

INDUSTRY CAPITAL raised (£ m)
DISCRETIONARY CONSUMER 5476
REAL ESTATE 2867
FINANCE * 2529
TECHNOLOGY 1622
ENERGY 1472
HEALTH CARE 1343
BASIC MATERIALS 1230
INDUSTRIAL 1166
BASIC CONSUMERS 981
UTILITIES 409
TELECOMMUNICATIONS 271
* Excluding closed and open investment vehicles

The travel industry struggles to find its feet

The travel industry continues to be negatively impacted by travel restrictions and lingering uncertainty, which has led many in the industry to return to capital markets several times over the past 18 months.

In the second half of this year, an additional £ 2.5bn of capital was raised by companies in the travel and leisure sectors, including some of the biggest placements of the year to date.

This included EasyJet’s £ 1.2 billion rights issue, designed to help fund his recovery from the pandemic.

TMT unearths opportunities

Not all industries have been negatively affected by the Covid restrictions, and others that initially struggled have more recently seen green shoots of new opportunities.

The main ones are technology and real estate.

In 2021, tech companies raised a total of £ 1.6bn in follow-on capital, often to fund growth strategies or acquisitions in the face of growing consumer demand.

In October, online security specialist Kape Technologies raised more than £ 250million in an oversubscribed placement to facilitate its acquisition of ExpressVPN.

In July, Ascential, the information, analytics and e-commerce optimization company, raised over £ 150million to provide additional firepower for acquisitions amid a strong pipeline of target opportunities attractive.

In the real estate sector, changes in consumer behavior have also led to significant inflows into listed investment vehicles.

Tritax Big Box REIT, which invests in warehouses and logistics assets, raised £ 300million in October.

Meanwhile, Home REIT, a provider of housing for the homeless, raised £ 350million in an oversubscribed fundraiser in September.


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