investment-banking-narrow-goodbody_2020 investment-banking-tablet-nr-goodbody_2020 investment-banking-mobile-nr-goodbody_2020

Latest News

H2 2021 Capital Monitor


An analysis of follow-on issues on the London Stock Exchange Main Market and Alternative Investment Market to identify the trends shaping capital raising activity from London-listed businesses.

Capital raising continues at pace amid ongoing COVID disruption

Two years into the pandemic, capital raising from UK-listed corporates continues at record pace. In H2 2021, 202 companies raised a total of £12.6 billion in new capital across 242 transactions. This brings the total so far for 2021 (January – November) to £24.7 billion. This represents the second highest total since 2009, following on from 2020 when £34.4bn was raised.

As COVID lockdown measures took hold in 2020, we first saw corporates turning to their investors to rebuild balance sheets and capitalise on opportunistic growth opportunities, with capital raising reaching the highest level in a decade. However, although strict lockdown measures have eased, capital markets activity has remained elevated compared to pre-pandemic levels.

Capital raising on London’s Alternative Investment Market (AIM) has been particularly strong, with £6.3 billion raised across in the year to date, the highest level since 2007.

H2-2021-Capital-Monitor_chart_1

Source: London Stock Exchange Data, Goodbody analysis

 

Consumer, real estate and financials lead capital raising

Excluding listed closed end and open end investment vehicles that invest across a range of sectors, businesses in the consumer discretionary industry raised the most capital, raising more than £5.5bn in the year to date. This industry classification includes sectors such as automotive and household goods as well as the travel and leisure sector.

This was followed by the real estate sector, which raised £2.9 billion, and financials, which raised £2.5 billion.

H2-2021-Capital-Monitor_chart_2

Source: London Stock Exchange Data, Goodbody analysis


This data demonstrates once again that while capital raising has been most prominent among consumer industries adversely impacted by national lockdowns, capital raising has been active across all sectors, including those where the pandemic has presented significant growth opportunities.

Travel industry struggles to find feet

The travel industry continues to be negatively impacted by travel restrictions and ongoing uncertainty, leading many in the sector to return to capital markets multiple times over the last 18 months.

In H2 2021, £2.5 billion of further capital has been raised by companies in the travel and leisure industries, including some of the largest placings of the year to date. This included EasyJet’s £1.2 billion rights issue, designed to help fund its recovery from the pandemic.

Technology and Real Estate fight to build positive COVID legacy

Not all industries have been negatively affected by COVID restrictions, and others that initially saw difficulties have more recently experienced green shoots of new opportunity. Chief among these are technology and real estate.

In 2021, technology businesses raised a total of £1.6bn in follow on capital, often to fund growth strategies or acquisitions in the face of rising consumer demand. In October, online security specialist Kape Technologies, raised more than £250m in an oversubscribed placing to facilitate its acquisition of ExpressVPN. In July, Ascential, the information, analytics and eCommerce optimisation company, raised more than £150m to provide additional firepower for acquisitions in the face of a strong pipeline of attractive target opportunities.

In the real estate sector, changes to consumer behaviour have also led to increased demand for for logistics investments, leading to significant inflows into listed investment vehicles. Tritax Big Box REIT, which invests in warehouses and logistics assets, raised £300m in October. Meanwhile, Home REIT, a provider of accommodation to the homeless, raised £350m in an oversubscribed fundraising in September.

Tags
goodbody-logo-white

youtube-footer    linked-footer

Warning: Nothing presented on this website constitutes investment advice as it does not take into account the investment objectives, knowledge and experience or financial situation of any person. You should not act on it in any way and are advised to obtain professional advice suitable to your own individual circumstances. The value of your investment may go down as well as up. You may lose some or all of the money you invest. Past performance should not be taken as an indication or guarantee of future performance; neither should simulated performance. The value of securities may be subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities.
Goodbody Stockbrokers UC, trading as Goodbody, is regulated by the Central Bank of Ireland. In the UK, Goodbody is also subject to regulation by the Financial Conduct Authority. Goodbody is a member of Euronext Dublin and the London Stock Exchange. Goodbody is a member of the group of companies headed by AIB Group plc.
@2022, Goodbody
youtube-footer     linked-footer     instagram-footer