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London’s latest stock exchange debut from tinned tuna group Princes has had a lukewarm reception from investors despite the new UK business secretary hailing its flotation as “part of an energetic turnaround of our economy”.
Princes, a manufacturer of tinned fish, chopped tomatoes and cooking oil, priced its shares at 475p, at the bottom of the range, giving it a market capitalisation of £1.16bn compared to early hopes of a £1.5bn valuation.
Shares closed flat on Friday after a volatile first day’s trading. The start of trading was being closely watched in the City following reports of a “soft” level of interest from some funds.
Princes’ listing comes just a day after shares in Shawbrook surged in its £1.9bn debut and follows LED light mask maker The Beauty Tech Group, which went public at the start of the month although its shares have slipped since its debut.
The trio of listings have delivered a spark of life to the moribund London market, which this year had trailed the Angolan stock exchange in the value of capital raised.
Peter Kyle, who was made business secretary in last month’s cabinet reshuffle, welcomed Princes’ listing and said the trio marked a “diverse set of businesses that are choosing London”.
“This is all part of an energetic turnaround for our economy and the beating heart of a free-market economy that is the stock exchange,” he said.
It is unusual for government ministers to be called on to promote individual stock market debuts. The last to do so was Rishi Sunak, when as chancellor in 2021 he publicly welcomed Deliveroo’s IPO as a “true British tech success story” hours before its share price tumbled by a quarter on its first day of trading in one of London’s worst stock market debuts.
Kyle said that he was championing the Princes IPO because he wanted to be more “energetic” and take a “more entrepreneurial approach to being secretary of state”.
He then added: “Also, I do love Princes’ tuna. As somebody who is totally hook, line and sinker — forgive the pun — into health and wellbeing and high protein foods, a week does not go past in my life when I am not tucking into a can of tuna at some point.”
Kyle said the London Stock Exchange had “suffered through the years of chaos and reputational damage of previous administrations”, including the impact of Brexit and “we can capitalise on the stability that’s returning to the economy”.
The LSE has suffered from a listings drought over the past three years. In the year to September just $210mn was raised from London IPOs compared with $52.8bn in New York over the same period.
Kyle predicted more IPOs next year, adding that “avalanches start with a flurry”. Potential London listings include Monzo, Visma, CFC and LoveHolidays.
The government is considering options to make London more attractive to listings, including scrapping stamp duty on new listings and giving entrepreneurs tax relief on share schemes for employees. However, Kyle dismissed speculation about these potential changes as “conjecture”.
“The London Stock Exchange will thrive when there are increasing numbers of businesses that are investing here, and we get better at spinning out and scaling up,” he said.
Kyle said he was aware the government had “more work to do but the people who underestimate our ability are going to be the people who miss out on this huge opportunities that doing business in Britain is going to offer people in the next few years”.