Whittling 47 flotations down to 1 (or 2)

Very occasionally I look at flotations for investment ideas.

I realise flotations come with sensible wealth warnings (why should you buy when the owner is selling?), but every great stock floated at some point (Microsoft etc).

I think if you avoid private-equity disposals and companies yet to reach breakeven, then the rest could be worth at least a quick look. Sometimes new flotations go to ridiculous share-price heights as they do not have any past shareholder disappointments to hold them back.

I used SharePad to list every LSE flotation since the start of 2020:

47 names appeared:

TIDM Name Float date Market Cap (m)
WPM Wheaton Precious Metals Corp 28/10/2020 £13,670.6
THG THG Holdings Ltd 16/9/2020 £7,323.5
AUY Yamana Gold Inc 13/10/2020 £3,660.2
N91 Ninety One PLC 16/3/2020 £2,190.5
CLSN Calisen PLC 7/2/2020 £1,423.9
BYIT Bytes Technology Group PLC 11/12/2020 £849.9
CRE Conduit Holdings Ltd 1/12/2020 £823.7
SPEC Inspecs Group PLC 27/2/2020 £347.4
HEIQ Heiq PLC 7/12/2020 £301.5
FRP FRP Advisory Group PLC 6/3/2020 £269.5
HOME Home Reit PLC 12/10/2020 £256.8
PRE Pensana Rare Earths PLC 6/7/2020 £197.5
IES Invinity Energy Systems PLC 2/4/2020 £174.8
SBI Sourcebio International PLC 29/10/2020 £171.4
SYME Supply@Me Capital PLC 23/3/2020 £167.1
ELIX Elixirr International PLC 9/7/2020 £150.2
FNX Fonix Mobile PLC 12/10/2020 £142.5
RNEW Ecofin US Renewables Infrastructure Trust PLC 22/12/2020 $128.4
VRCI Verici Dx PLC 3/11/2020 £124
CLX Calnex Solutions PLC 5/10/2020 £102.4
GEM Gemfields Group Ltd 14/2/2020 £95.9
AEXG Aex Gold Inc 31/7/2020 £89.8
ABDX Abingdon Health PLC 15/12/2020 £89.5
KOO Kooth PLC 2/9/2020 £87.6
SBSI Schroder Bsc Social Impact Trust PLC 22/12/2020 £77.6
SBO Schroder British Opportunities Trust PLC 1/12/2020 £73.7
KIST Kistos PLC 25/11/2020 £63.8
TGR Tirupati Graphite PLC 11/12/2020 £62.8
VARE Various Eateries PLC 25/9/2020 £61.9
CCZ Castillo Copper Ltd 3/8/2020 £41.1
HE1 Helium One Global Ltd 4/12/2020 £39.1
MODE Mode Global Holdings PLC 5/10/2020 £38.3
BRSD Brandshield Systems PLC 1/12/2020 £35.4
CMET Capital Metals PLC 12/1/2021 £33.6
GILD Guild Esports PLC 2/10/2020 £30.3
WCAT Wildcat Petroleum PLC 30/12/2020 £21.6
NGHT Nightcap PLC 13/1/2021 £20.3
VCAP Vector Capital PLC 29/12/2020 £16.2
IIG Intuitive Investments Group PLC 14/12/2020 £10.4
LEX Lexington Gold Ltd 8/12/2020 £9.4
OTAQ Otaq PLC 31/3/2020 £8.9
PALM Panther Metals PLC 9/1/2020 £8.5
OHG One Heritage Group PLC 23/12/2020 £8.4
PNPL Pineapple Power Corporation PLC 24/12/2020 £6
MMM Mining, Minerals & Metals PLC 6/3/2020 £2.9
CRTM Critical Metals PLC 29/9/2020 £2.5
AMOI Anemoi International Ltd 26/10/2020 £0.9

To whittle down the list, I excluded the 27 names with sales of £1m or less.

I then excluded Calisen due to it being under offer. I also excluded the following companies because I am not a great fan of their sectors:

  • Wheaton and Yamana – Mining
  • Ninety One – Investment management
  • FRP – Professional services
  • Elixirr – Management consultancy
  • Gemfields – Gemstones
  • Various Eateries – Restaurants

That left 12 companies to consider.

I then excluded 5 companies – Bytes, Sourcebio, Fonix, Kooth and Otaq – on the basis of not being led by founder management. I do think the best flotations are new companies in new fields led by entrepreneurs.

I then excluded Vector Capital as its founder (and family) continue to own 81% of the shares, leaving a tiny £3m free float for everybody else.

So that left me with six ideas:

  • THG – E-commerce, beauty/nutrition
  • Inspecs – Spectacles and glasses
  • Heiq – High-performance textiles
  • Calnex – Telecoms test equipment
  • Abingdon Health – Healthcare services
  • Brandshield Systems – Cybersecurity

All six have management shareholdings of at least 19%.

Now a very quick check for a potential ‘moat’ as per the operating margin within the admission documents and subsequent results.

The latest accounts for Abingdon and Brandshield showed losses, so I have skipped them. THG revealed a profit of £30m on sales of £1.1b, so a tiny margin.

HeiQ showed a 5% margin for 2019, but for H1 2020 showed sales of $30m and a profit of $11m – a 30%-plus margin. The sudden profitability improvement was due to increased demand for the group’s “functional chemical products”.

Inspec declared sales of $57m and a profit of $9m for 2018 and $61m and $8m for 2019 – so mid-teen margins. Results for H1 2020 then showed a Covid-affected loss.

Calnex declared sales of £13.7m and a profit of £3.3m for 2020, so a 24% margin. H1 2021 figures showed sales of £7.8m and a £2.5m profit, so a handsome 32% margin.

Calnex looks to be the most interesting of the 47 flotations. The market cap at 115p is £100m. Doubling up the H1 2021 profit gives earnings of c£4m after 19% standard UK tax. So not an obvious bargain now, but worth a further look. The business carries net cash, too.

Runner-up is probably HeiQ. The company has presented via InvestorMeetCompany and the accompanying slides indicate a medium-term goal of increasing revenue from $30m to $300m. That on its own makes HeiQ worth further investigation as well.



Hi Maynard,

Its an interesting list and analysis. I note that HeiQ is presenting on Monday (25th) at the Mello evening event. Here: (MelloMonday 25th January 2021 – Mello Events)

I have always tended to eschew IPOs on the grounds they should be priced to perfection/optimistically and everyone has the same information (sellers aside!).

I did look back over the Primary Bid platform IPO offers and subsequent performance since listing and found the following:


No sophisticated analysis of the companies, but perhaps enough to know that I maybe should give IPOs at least a second look, notwithstanding a small sample size and favourable market conditions at the end of the year.


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Many thanks for an excellent resume of your approach to IPOs. As a Stockopedia subscriber am impressed SharePad can generate such user-friendly information on IPOs. Not sure I could get the same sort of data from Stockopedia even if I knew which keys to press to get the rankings.

I share your general scepticism about investing in private equity backed IPOs, and steer clear of public offerings where the bulk of the money is raised by selling shareholders, rather than for the company itself. However, it can be wrong to dismiss all private equity firms as carpet baggers. Some PE firms are better stewards than others when it comes to bringing companies to the stock market float. I have recently invested in Brickability (BRCK), a wholesaler or bricks and housing materials, which was brought to the market by Promethean, a private equity firm. Early days yet, but it looks like a good business with a sizeable management shareholding and plenty of profit growth potential.

Another thing I like to check is the level of institutional shareholders immediately after an IPO. Finding a few recognisable long-term small cap institutional investors can be a reassuring sign for a small investor who does not have the same access to management. Having glanced at the shareholder base of HeiQ, Inspec and Calnex, I am most reassured by Calnex’s institutional base which includes long term investors, such as the Business Growth Fund (BGF), and Scottish enterprise, and a couple of other serious investors - Slater and Herald - who one assumes must know what they are doing.

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Thanks for pointing this out Roger. I watched the presentation (and the whole event) and was not put off by Heiq. I am not quite sure why the share price has dropped so significantly following the trading statement the next day, so I need to look further. The concern I had was that the impressive H1 2020 performance was a one-off due to Covid, but the chief exec had suggested the Covid benefit would continue. Thanks also for the Primary Bid info. It’s a service that I hope can do well and help private investors.


Hi DarwenLad

I must confess I had not realised SharePad could search on flotation dates until recently! The service has a vast amount of data on which to filter for shares, and I have explained why I prefer SharePad to Stockopedia for screening on my blog

Good points. P-E floats are not all disasters. I recall tipping Inmarsat years ago despite being a recent P-E float at the time (the competitive advantage) and the shares did well. I think if management has retained a decent shareholding post-float, then yes certainly the stock is one to look at despite any P-E involvement. Agreed, certain institutional names on the register are helpful as well.


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Likewise, I watched the HeiQ presentation, and have a generally favourable impression. I’m a little baffled by the huge range of products they have and the various adverts they showed didn’t impress me particularly.

The shares have lost 1/3 of their value since then with today’s further 11% fall, which I a bit of a mystery. I hold at a loss now and will look to add, but I’d be happier knowing the reason for the fall.

Yesterdays trading update said revenue growth ahead of consensus and profits in line due to additional investment. Not necessarily a bad thing, but may have spooked people expecting a beat on both counts.

I certainly liked the potential of the graphene membrane, if they have an industrial filtration material to compete with Gore-Tex, it could be a real earner. I remain a bit sceptical of graphene in general, so time will tell if they can commercialise it.

Talking of Mello, I thought the Kromek (KMK) presentation even more impressive and watched yesterday’s follow up presentation. Definitely one for further investigation.


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Thanks Roger. Agreed with everything you have written. The underwear advert was perhaps not to everyone’s taste, but I guess would garner publicity – which is what adverts are all about!

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Hi, here’s some initial thoughts on Calnex:

The telecoms market opportunity described in the Calnex interim report seems to be slightly overstated and the quoted telecoms market growth rate looks unlikely to be sustained over the next few years. This might be important since 80% of Calnex revenues currently come from the telecoms sector. The interim report states:

“…with the global market for telecoms test and measurement equipment for mobile networks alone forecast by Frost & Sullivan to expand at a CAGR of 11.5% from 2020 through to 2024.”

The accompanying presentation slides contain a handy chart (slide 14) of the expected telecoms market growth:


This slide shows the 11.5% CAGR figure to actually be for the period from 2018 - 2024. If we use 2020 as the starting point the CAGR drops to 11.15%. That’s only a small decrease, but annual market growth (solid line) appears to have peaked in 2017 and is now in a longer term downtrend with annual growth projected to be only 8% by 2024. Still a reasonable rate but definitely slowing.

The revenue numbers on slide 9 appear to back this up. These numbers show that most of the current revenue growth is coming from Calnex’s top 10 customers. Within those 10 customers telco revenue growth dropped from 37% in FY19 to 23% in FY20 in contrast to the overall revenue growth, which is increasing.

% Revenue Growth FY19 FY20
Total 25% 31%
Total (excl. Top 10 customers) 14% 22%
Top 10 Customers 38% 40%
Top 10 Customers (excl. non-telco) 37% 23%

No doubt 6G mobile networks will come along and start a new cycle of increasing telecoms market growth again for Calnex at some point, in the meantime they might need to keep increasing the fraction of non-telco revenue contribution to maintain their current revenue growth rates.

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Finally got around to looking at Calnex:

Lots to like, although the apparent ‘window dressing’ is not ideal. But if the products really are tip-top and the market does grow at a double-digit pace, then I doubt shareholders will be too worried in the longer run.