IP-no, not yet: Businesses may be putting flotation plans on hold after Brexit vote

William Turvill
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Companies considering floats (like this gentleman) are putting their plans on hold, according to EY (Source: Getty)

Companies are expected to put flotation plans on hold after the UK voted for Brexit, according to a report out today.

Accountancy firm EY expects activity on London’s initial public offerings (IPO) market to come to a near-standstill after the UK voted to leave the EU.

Read more: What Brexit means for the UK's IPO market

The prediction comes after EY’s IPO Eye noted that 2016 has already seen “subdued levels” of activity, with 13 listings tracked in the second quarter, down from 15 in the first.

The second-quarter listings raised £553m in total, down 30 per cent on the first quarter and 52 per cent on the same period in 2015.

IPO Eye noted that “a number of businesses that were prepared and could have listed as quickly as [the fourth quarter] are now expected to put their plans on hold until there is a more certain economic and political outlook in the UK”.

Read more: IPOh dear: Flotation revenue down 58 per cent so far in 2016

Scott McCubbin, EY’s IPO leader for UK and Ireland, said: “Raising capital is likely to be more difficult in this environment. IPO activity was already slow across the UK due to a wide range of economic and political uncertainties.

“Following the result of the EU referendum we expect UK IPO activity to slide further to a near-standstill in the next 12 months as investors absorb and process the changes to the UK economic landscape.”

PwC also expects reduced IPO activity in the UK following the Brexit vote. But capital markets leader Mark Hughes told City A.M.: “London is one of the world's most international capital markets, and in or out of the EU will remain attractive to new issuers seeking to raise finance and to global investors seeking new investment opportunities.”

Brexit Britain: What you need to know