Inside Track: just might serve up a London flotation

David Hellier
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LONDON’S reputation as a host city for start-up technology groups would be enhanced if some of the larger businesses would only decide to list here. While there’s no doubt the plan to set up a hub for tech companies around Old Street roundabout is making strong progress, there are still concerns that some of the larger technology companies located in the UK, such as the games maker King, or music service Shazam, seem headed towards flotations in the US.

So there’s excitement that one of the UK’s faster growing internet groups,, is said to be considering a London listing. The owners of the business include Index Ventures and Vitruvian, both of whom are supposed to favour a London float, although no decision has yet been taken., which signs restaurants up to its web-based ordering service to give customers a cornucopia of takeaway menus to choose from, has revenues of around £70m a year. Speculation about a flotation started in May when David Buttress was appointed as chief executive of the group.

Should Just-eat decide to list in London, it would be a big boost to the London Stock Exchange, which has been working hard to try to shift the perception that London is not a listing home for technology companies with global ambitions. The LSE points out that 18 tech companies have floated in London including two US companies in the last 12 months but critics might say that many of them are relatively small-scale. would be higher profile and might raise expectations for what can be achieved in the UK.

Three years ago, when raising equity was pretty difficult, a number of companies, including Tesco, went down the route of raising funds from retail bonds. The retail bonds they issued generally carried with them an interest rate of between 4.25 and six per cent, an attractive yield for investors, part institutional, part private, who wanted a relatively risk-free but decent income. There have been 37 retail issues, which have raised £3.41bn. A new report from research consultancy Hardman & Co shows the market has witnessed a significant increase in retail participation which, together with the creation of an Order Book for Retail Bonds (ORB), has led to a positive effect on liquidity.

Current volumes are now around five times more than they were in the early days of the ORB, despite a slight downward lurch in the last few weeks. As more retail as opposed to corporate investors have flooded into the market, the average price of a trade has dropped dramatically.