The online estate agent Purplebricks made a roller-coaster debut on AIM yesterday, underscoring the tougher climate for new issues on the London Stock Exchange.
The tech company, backed by investors such as the fund manager Neil Woodford and the former Wonga boss Errol Damelin, rose as much as 6.5 per cent before crumbling to end the day 7 per cent below its 100p a share offer price.
Zeus Capital, the broker also responsible for the flotation of firms such as Boohoo, brought the company to the junior stock market with the shares priced at 100p – giving it a market cap of £240m.
The shares closed at 93p, highlighting weaker sentiment in the City as traders head into the new year.
The company raised £58m from the listing, with £22.8m of that net new money.
Purplebricks’ chief executive, Michael Bruce, said: “The funds raised will allow ... additional investment in people, technology, infrastructure and marketing to deliver our ambitious growth plans as well as value for all of our shareholders.”
Purplebricks, the fourth- largest estate agent in the UK, claims its average fees are £1,080 – against £4,000 among traditional agents.
The listing coincided with figures from the London Stock Exchange showing a decline in the amount of money raised this year. The LSE said there had been 161 listings in the 11 months to 30 November – down from 193 in the same period last year. The total money raised fell by 2 per cent to £40bn.
However, the LSE chief executive Xavier Rolet hinted at an improved outlook in 2016 for new listings. “The capital markets business achieved a robust performance and the new-issue pipeline remains encouraging,” he said.
The final quarter is usually a strong period for new listings as investors return from the summer break, but the backlash from the Chinese market collapse in August put a dampener on autumn activity. A string of big listings during the final quarter – including the FTSE 100 giant Worldpay and the housebuilder McCarthy & Stone – flattered the overall figures.
