The planned £500 million IPO of Marley, the UK’s largest maker of roofing tiles, has been shelved by the company which blamed market volatility for its decision to delay the listing. Just days after the flop IPO of ‘Uber of trucking’ Eurowag, Marley’s decision to pull the plug rather than run the risk of a disappointing IPO underlines the recent impression London Stock Exchange investors have had their fill of public listings after a particularly active year-to-date.
The stock market optimism and a voracious appetite for risk that marked the recovery from the coronavirus sell-off and ending of lockdown periods this spring and summer appear to have given way to nerves over inflation, the energy crisis, supply line issues and growth slowing after the release of pent-up demand earlier in the year.
Marley, based in Burton upon Trent, is the UK’s largest manufacturer of roof tiles and holds a market share estimated at 21%. The company employs almost 600 staff and was established in 1924. It is currently owned by British private equity group Inflexion.
It’s less than a month since Marley announced its intention to list on the LSE main market and just last week revealed to investors a target valuation of between £470 million and £500 million. But a steep worsening of investor sentiment over the past week as a result of rocketing energy prices, labour costs, international supply chain issues and the threat of the collapse of China’s real estate market has since seen Marley reassess the wisdom of its IPO’s proposed timing.
In the UK, the FTSE 250, seen as the best gauge of the domestic economy is down over 7% since the beginning of September and most major international indices have suffered a notable decline. Against that backdrop, Marley has filed notification to the London Stock Exchange that it had reached the conclusion pushing forward with its IPO would likely prove damaging to the company and its current shareholders.
A statement read:
“Whilst Marley has received considerable institutional investor interest… the board and shareholders have decided that proceeding with an initial public offering in this period of market volatility is not in the best interests of the group and its stakeholders.”
The weight of evidence now suggests the recently attractive window for IPOs is now quickly closing. Real estate investment trust Responsible Housing also last week pulled its planned £250 million IPO. Over the first three quarters of 2021 to the end of September, there were a total of 85 IPOs of companies listing on the London Stock Exchange raising over £13.7 billion in investment capital.
But it now looks as though that period of frenzied activity has come to an end and there are unlikely to now be many more IPOs before the end of the year at least.