London’s IPO market may finally be stirring

Read time: 3-5 mins

With speculation continuing around potential giant future IPOs across the pond, we shouldn’t forget the London Stock Exchange. To be honest, we’re unlikely to rival last week’s excitement of the biggest IPO in stock market history – the SpaceX flotation (or should that be launch?). But with UK investors in Nasdaq companies often seeing their gains muddied by FX fees, exchange rate movements and time-zone misalignment, it feels like a good time to look at what the UK IPO market might have in store.

The conglomerate behind Superdrug, Savers and The Perfume Shop – AS Watson – is rumoured to be considering a joint London/Hong Kong float. The delayed flotation for Norwegian software giant Visma would represent one of the largest LSE listings in recent years. But if companies are waiting for a calmer geopolitical landscape, we might be waiting a long time. The messaging from last year’s IR Society conference was pretty clear – disruption is the new normal – so get used to it, communicate transparently, and don’t delay.

With low prices leaving our best companies vulnerable to poaching from US companies and private equity, and huge segments of our investment trusts trading at a discount to NAV, the UK Government has stepped in to try to reverse the “big freeze”.

Some targeted interventions have boosted London’s attractiveness and competitiveness; alongside reforms to listing rules and index eligibility, UK Listing Relief removes the 0.5% Stamp Duty Reserve Tax charge on trading shares in newly listed companies for three years after flotation, helping to improve the attractiveness of London as a listing venue, while the UK Government continues its work on improving access to retail investing.

Rumoured candidates including Gymshark, Waterstones, Monzo and Revolut would bring greater scale, profile and investor interest to the LSE should they proceed.

Post-IPO challenges

But why would a company choose to go public in this economy? Listing can bring better access to capital, better liquidity, a heightened reputation and media interest, as well as access to enhanced talent, suppliers and customers. It also brings scrutiny, a wider audience and a flurry of new reporting requirements to get to grips with.

IPOs require management teams to coordinate advisers, investors and regulators while delivering multiple market-sensitive communications to tight deadlines. By the time the first annual report rolls around, energy may have stalled, expectations may be unclear and messaging may be muddled.

Why the first annual report matters

Getting your story right for those initial communications is so important – as your first impression to potential new retail and institutional shareholders. At Lyonsbennett, we love working with recent IPOs and their advisers to craft this all-important narrative – and in fact, several of those companies we started working with at IPO are still working with us today.

The annual report is a key document. It is a trusted, audited communication of the first financial year as a listed company and sets the tone to investors about past performance and future intentions. Newsflow, media presence and wider shareholder communications are of course important too, but the annual report has precedence. Even research on ChatGPT shows that corporate reports are the single most important and trusted source category for ChatGPT when it comes to questions on the financial and non-financial development of listed companies. Annual reports are audited, board-approved point-in-time disclosures that carry real reputational weight.

How Lyonsbennett can help

Lyonsbennett are reporting specialists and can help take the weight off companies in that busy first year since IPO. We can work from the prospectus and existing presentations to create a maiden annual report that feels authentic to the business. We’ll flag what needs to be written with a gap analysis and help with copywriting and strategic guidance to bridge any gaps and knit the story together, reducing repetition and ensuring key messages land.

Combining legislative requirements with peer benchmarking helps create a clear roadmap for what must be included, and what’s a “nice to have”. We create a colour-coded flat plan and supporting word-count framework to coordinate multiple contributors. A weekly call keeps us on schedule and helps us flex timings when surprises hit.

One of our recent IPO collaborations was with Applied Nutrition, and their CFO commented on the support Lyonsbennett offered: “LB really understood that we were after an annual report which delivered our message succinctly. LB held our hand all the way, this was important as a CFO going through a plc annual report for the first time. Deadlines and requirements in terms of what we needed to deliver and when were super clear. They were also able to help reduce the pressure on the timetable by bringing forward parts of the annual report that could be drafted before year end.”

Conclusion

Knowing your story, and having an agency you can trust to tell it, is so important.

One of the first steps is aligning the strategic framework so the investment case, strategy, KPIs and business model tell a coherent story. We collaborate with our clients to help this story come alive, both in terms of messaging and visually.

Our last webinar focused on digital-first reporting, but our next one will go back to the foundations of the content – and getting this right is key to getting ahead of stakeholder and investor questions posed via AI. If the company isn’t saying it themselves in their accessible annual report and other corporate communications, AI tools look for other third-party sources to fill the gaps. If you’d like to join us and be on the invitation list alongside copywriting partner and former IR Director Richard Hollins, who we’ve worked with on multiple IPO and award-winning projects, please reach out to research@lyonsbennett.com.