Lorry load of IPOs head for London

Despite grim predictions that the IPO market is dead, it actually looks to be hotting up as we approach the end of the first quarter. Just days after venture capitalist Downing announced the launch of a new investment trust in May, two other companies have said they will come to market shortly. We hear there'll be more next week, too.

There's been plenty of talk about firms like Logicor, O2, Misys and Kuwait Energy listing in the capital. They may or may not happen, but Eddie Stobart is certain to make a triumphant return to the stockmarket next month.

Britain's best-known haulier has just flagged plans to float its famous fleet of 2,200 green-liveried lorries on AIM in April. Eddie Stobart wants to raise £130 million for the business, valuing the company at £550 million.

Founded in 1970, Eddie Stobart was owned by Stobart Group until 2014 when it sold a 51% stake to Isle of Man offshore fund manager DBAY Advisors.

Now, holding company Greenwhitestar UK, which is being renamed Eddie Stobart Logistics, will sell down its stake to 30% or less. It says a number of its existing management team intend to invest at the time of the IPO.

And you can see why. Eddie Stobart made an adjusted operating profit of £41 million in the year to November, up from £36 million, on an increase in revenue to £549 million from £468 million. And first-quarter profit and sales leapt 20% and 18%.

Having transformed the business over the past three years, making big investment in customised technology and systems, chief executive Alex Laffey is bullish.

He says the UK and European logistics market is highly fragmented, offering strong opportunities for growth both organically and through bolt-on acquisitions – one of which in the e-commerce sector will be completed once the placing goes ahead.

It's unclear how generous the dividend will be, but there is a commitment to pay a dividend for the 2017 financial year and implement a progressive dividend policy thereafter.

Clearly, Stobart Group is pleased Eddie Stobart's strategy is bearing fruit and wants to keep "a meaningful stake" post the float.

Laffey, staying on to lead the company, will be joined by new chairman Philip Swatman, formerly a big cheese at NM Rothschild and veteran of high-profile transactions including the IPOs of both Vodafone and William Hill.

As the two Stobart teams were popping the champagne corks, EJF Investments, a £68 million asset-backed securities and real estate fund, announced it would follow in Downing's footsteps and seek a listing on the main market.

A subsidiary of $7.4 billion hedge fund manager EJF Capital run by American big hitter Emanuel 'Manny' Friedman, EJF Investments will invest in "assets benefiting from regulatory and structural change in the financial services sector," and look to pay a quarterly cash dividend of 6% per annum.

That's included in a targeted annualised risk-adjusted net asset value total return of 8-10% per annum. Dealings in the shares are expected to begin on or around 7 April.

Boss Neal Wilson said: "Continuing regulatory upheaval in the financial industry offers a unique set of investment opportunities. The combination of legacy assets, shifting regulatory requirements and changing balance sheet strategies at the major banks has allowed us to assemble a portfolio offering diversification, stable cash flows and attractive yields."

EJF already has a pipeline of target investments, with £5.6 million of cash on the books ready to spend. Prime targets look to be in the UK and Europe where it's been investing in the financial sector since 2011.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.