WEEKEND COMMENT: TERRY MURDEN reflects on Scottish activity on the stock market, the resignation of a top PR executive and the Chancellor’s Budget
A case of one in and one out. Scots entrepreneurs Kevin Dorren and Chris Van der Kuyl announced they would be adding Edinburgh-based Parsley Box to the country’s stock of quoted companies only for Aggreko to confirm it was about to lose its listing in a £2.3 billion takeover.
With Calnex Solutions joining the market last October and Nucleus Financial in the process of being acquired, the running total for Scots quoted firms is back to where we were last summer, although the advisory community tell us to expect a pick up in IPOs this year.
Parsley Box will be admitted to AIM at the end of this month or early April and there are at least a couple of other Scottish IPOs bubbling under. One other confirmed is Thurso-based AMTE Power.
The relaxing of the listing rules and the prospect of an aggressive desire to recover lost ground when the economy properly reopens is expected to fire more flotations as companies seek further capital to shore up battered balance sheets and look to get back on the growth trail.
Despite, or more probably because of, the pandemic there were more IPOs last year than in 2019 – 40 against 36 (a rise of 11%). Firms raised more money last year for more than a decade, an indication of the challenges they faced.
New listings were also healthy with £9.2bn raised through IPOs, up 27% from 2019,
A shake-up of the UK listing rules will make it easier for London to compete with other financial centres including New York, Amsterdam and Frankfurt and there is particular momentum towards encouraging the new generation of fintech companies to take this route. If the Scots fintech community is as robust as we’re being told then maybe one will put its head above the parapet.
One continuing challenge is the vulnerability of firms when the markets or particular sectors are seen as cheap. TDR Capital and I Squared clearly spotted an opportunity with Aggreko. The price paid is a 39% premium to the price on 4 February when their interest was made known. It’s not unusually high, but shows there is plenty of upside. Indeed, the shares rose as high as 905p after the offer was announced, perhaps in anticipation of a rumoured counter bid from Platinum Equity which has been looking at the company.
Either way, Aggreko is in for a period of ownership change. In three or four years time the private equity duo will be looking to move the company on.
It’s not been a particularly glorious start to the year for Scotland’s PR agencies. First there was a wrap on the knuckles for Charlotte Street Partners after it annoyed the PR trade associations by hiring Lord Duncan as an adviser; now Gordon Beattie has resigned as chairman of the company he established in the 1980s over a comment on social media.
I’ve known Gordon for the best part of three decades and watched his agency grow from that first PR cheque to an organisation spread across the UK and into Canada. I even went to visit him in Monaco on my 50th when he moved there just before the financial crash. He’d made a lot of money, not just from some high profile PR clients but from trading property in London. But the money won’t mean much to him as he reflects on the events of the past week. Now living in the US, he’ll be gutted and struggling to come to terms with undoing all he’s built as a result of one careless post on LinkedIn.
Without dwelling on the content, I have to say that it came across as more a case of knowing what he meant to say, but saying it badly. There but for the grace of… and all that…
Sadly, his clients – who have included some blue chips over the years – may be wondering how someone who promotes the value of communicating the right message showed such cack-handedness in conveying his own.
He’s been posting regular pearls of PR wisdom on LinkedIn on a regular basis, though I doubt we’ll be seeing many more of those any time soon. Social media has also, once again, shown how vicious people can be. One post on Twitter showed someone throwing his book of quotes on a fire.
As for the company, it has some rebuilding and reassuring to do and, as one pundit mentioned to me, its recently appointed “Happiness Officer” is going to be very busy restoring morale.
In an earlier version of this post I said it wouldn’t surprise me if CEO Laurna Woods offered to buy the assets (clients), wind up Beattie Communications, and launch her own business, leaving Gordon to his Florida sunshine and time to reflect on how he failed to heed his own advice.
It was later confirmed that Ms Woods will lead an MBO and Gordon said he’ll be focusing on his “wider interests.”
Let’s face it, the Chancellor was caught between a rock and a hard place in delivering what was the Budget equivalent of trying to keep dry under a waterfall.
The £280 billion cost of preventing the economy from collapsing together with national debt now at an eye-watering £2.1 trillion makes the bank bail-out a decade ago look like petty cash.
The detail in the figures has shown that despite all that spending, he’s actually cutting back on public services, though some might argue that they have to take a hit just like everything else.
Aside from the headline tax rises and the freeze on drinks duties the main interest for me was in what he omitted. There had been a big build up on reducing beer duty in pubs, introducing a levy on online retailers and hiking capital gains tax, none of which was announced.
It’s probable that he wants to see how quickly the economy will reopen and what shape it takes before committing to further giveaways that he can hardly afford.
As for the online retail levy, the Treasury is said to be keen on the idea as a means of helping the struggling high street but accepts that it will require cross-border agreements for it to be effective and avoid companies relocating their tax base.