Brickies make a ton at Ibstock
TODAY’S near-£1bn flotation of Ibstock will make chief executive Wayne Shepherd a multi-millionaire and leave four other members of his management team sitting pretty, as their 5pc equity stake is valued at about £50m. The country’s largest and oldest brickmaker’s second dive into public markets represents one of the most audacious private equity flips: Bain Capital Europe only bought the company in December 2014 for £414m from Irish builder CRH, which was desperate to raise cash to help fund its £4.9bn acquisition of Tarmac Lafarge.
The indicative price range of the float is 185p to 225p, making a market capitalisation of £750m to £912m. Dealers last night awaited confirmation of the strike price and many were of the opinion that advisers, led by JPMorgan Chase and UBS, would play it safe and price it at the middle of that range.
As one fund manager said: ‘Bain Capital’s decision to flip it early could mean it is confident we are close to the top of the construction or housebuilding cycle and demand for bricks will start to falter. Having said that, when you get a chance to more-than-double your money in nine months, why not say cheerio.’
Michelmersh Brick, the UK’s fourth-largest brick-maker, this week said it expects fullyear profits should beat expectations but also warned the unexpected summer slowdown in the construction market had pegged back deliveries in recent months.
If that’s the case, any interested retail investor in Ibstock will probably have to be in for the long haul. The firm was previously listed on the London Stock Exchange from 1963. It has 40pc share of Britain’s clay brick market and makes 780m bricks a year.
Early interest in the Footsie, 3.29 points up at 6348.42, was dominated by former FT owner and education group Pearson. It immediately moved to the bottom of the class with a catastrophic fall of 189.5p or 16pc to 998.5p after a profits warning.
Chip maker ARM Holdings, on the other hand, jumped 63p to 1026p after an upbeat third-quarter trading performance.
Merlin Entertainments attracted buyers and closed 17.4p better at 389p after announcing plans to set up a joint venture with China Media Capital to develop a Legoland Park in Shanghai and other attractions elsewhere.
Wall Street fell 48.50 points to 17,168.61 despite strong third-quarter trading statements from heavyweights Boeing and General Motors. Ferrari’s shares raced away on their market debut, leaving the $52 opening price several laps behind at $60.97.
Barclays may have a £57 target price for Shire but the drugs firm lost 124p to 4462p on nervous selling ahead of today’s thirdquarter figures.
Argos-owner Home Retail was the biggest casualty in the FTSE 250, falling 23.7p or 16pc to 126p after a profits warning, blaming uncertainty ahead of the US-inspired Black Friday discount shopping day and Christmas. Selling ahead of next month’s interims left Talktalk Telecom 26.1p off at 263.3p.
Investment management and information services provider Fidessa rose 89p to 1949p after saying it expects to announce a further special dividend when it reports full-year figures in February. Computacenter edged up 1.5p to 749.5p after the IT provider said trading in the third quarter was hampered by strong currency headwinds, but its outlook for the full-year remains in line with expectations.
Early demand for Evgen Pharma saw the shares rise sharply above the placing price of 37p and touch 42.5p before late profit taking left the close 1.8p easier at 35.1p. Evgen is a clinical- stage drug- development company which focuses on cancer and neurological conditions. Its core technology is Sulforadex, an anti-cancer agent found in broccoli and other brassicas.
Advanced Oncotherapy put on 0.38p to 7.12p after signing a contract for its highenergy proton beam therapy with China-Japan Union Hospital worth between £48m and £52m.
Sound Energy gained 0.75p or 5pc to 16.75p after announcing a strategic partnership with the world’s biggest oil service firm Schlumberger. Berkeley Energy, the Aussie-based uranium producer, was flat at 20.75p after confirming that all major permits are now in place for the Salamanca project in Spain.
Software developer TechFinancials powered 3.5p ahead to 14p. Buyers piled in on hearing it will own 51pc of a joint venture with Option fortune Trade Ltd, a company registered in Hong Kong. It will run a B2C binary options-trading platform focused on the Asia Pacific region.
Plutus PowerGen rose 0.12p to 1.95p having secured management contracts for two further 20MW electricity plants in the UK. It plans to deliver 200MW of power over the next three years.