City & Corporate: D-Day nears for IPO market

Prospect of new flotations marks defining period for financial PR.

The financial PR sector faces a crucial few weeks as the viability of this year's IPO market looks set to be determined during the next month.

Much of the sector remains reliant on lucrative project work to hit 2010 revenue projections, and managing comms around new flotations seemed set to provide a large slice of those project fees.

Last week, the IPO market was dealt a huge blow when three of the highest profile names that were expected to float shelved their listing plans. Tulchan Communications-advised Merlin Entertainments, Brunswick-advised New Look, and Travelport, which was using Finsbury, all delayed their planned listings during the week.

But amid the gloom, three new names announced their intention to float on Monday.

M:Communications has been called in to handle fashion retailer SuperGroup, which is set to launch a £125m listing. Educational technology firm Promethean is using Citigate Dewe Rogerson for its proposed £500m float, while UK healthcare software supplier EMIS Group is using Hogarth for its planned AIM listing.

One financial PR boss said the success of these and other planned IPOs would determine how the rest of the year will shape up for the financial PR sector. 'The fate of all our budgets for this year will be decided during the next four weeks,' he said.

Others still linked with an IPO include sofa retailer DFS, online grocer Ocado and private hospital group The Priory.

HOW I SEE IT - RICHARD CAMPBELL, MD, CAPITAL MS&L

The jury is still out on where the IPO market goes from here. Private equity listings are likely to be difficult and communications around them is probably going to have to change. Generally, an IPO will be accompanied by a lot of upfront media relations, but these transactions will now have to be communicated with less hubris and more respect of the investment community.

The IPOs that have been pulled have been private equity-owned firms raising proceeds to pay down debt. When cash is still sparse, investors really want to back firms looking for capital to fund growth, so those needing cash to de-leverage their balance sheets are likely to find the current market more difficult.

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