Made.com IPO preview: online UK furniture giant plots £1 billion London listing
Buoyed by a pandemic buying boom, online furniture retailer Made.com has confirmed plans for a £1 billion flotation on the London Stock Exchange, with plans to raise £100 million by selling shares. Will the Made.com IPO succeed?
- Made.com is expected to launch an initial public offering (IPO) soon
- Founders hope that the IPO will raise £1 billion on the primary market
- The company will float on the London Stock Exchange
- Share price details are yet to be announced
Made.com IPO: the basics
The UK online furniture retailer Made.com has confirmed plans to float the company on the London Stock Exchange in June, following weeks of rumours that an IPO was in the offing. Following a pandemic-driven boom in online furniture shopping, Made.com saw its gross sales increase to £109.5 million in the first quarter of 2021 - a YOY increase of 63%. The online shop also saw its active user base grow to 1.2 million people in the UK and Europe, making it one of the country's biggest homeware retailers.
It was apparent earlier in the year that Made.com was planning an IPO, which the company finally confirmed in a press release on 1 June. The retailer also said today that it would be attempting to raise £100 million via the issuing of new shares while existing shares held by staff will also be sold.
Made.com share price expectations
The Made.com share price is yet to be announced, and there is currently no prospectus available for potential shareholders. All we know at this point is that Made.com plans to launch on the LSE sometime in June 2021. A detailed prospectus with share price expectations will likely become available in preparation for the floatation.
We know that gross sales for 2020 were at £315 million with a net income of £247 million, a 30% over the previous year. This was possibly prompted by customers looking to refresh their homes when faced with the lockdown caused by Covid-19. With the company employing 650 employees, the company posted its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) at a loss of £5.1 million for 2020, down from the £9.8 million posted for 2019. From January 2021 to 31 March 2021, they are looking at gross sales of £110 million, a 64% improvement over the previous year.
One thing that potential investors may be keeping in mind before the launch will be the last major float on the LSE, Deliveroo (ROO.LSE). Billed as the biggest IPO in London in almost a decade, Deliveroo's share price plummeted almost immediately after the float, with the company losing £2 billion in value.
The founder of Made.com, Brent Hoberman stated that he is confident that Made.com's London debut will fare better than his previous float for Lastminute.com, hoping to avoid a 'roller-coaster' float. He also noted that its high sales growth is evidence of a strong and sustainable business.
Made.com fundamentals at a glance
- Co-founded in 2010 by British entrepreneur Brent Hoberman
- Total 2020 sales amounted to £315 million, 30% higher than 2019
- The retailer reported an adjusted EBITDA loss of £5.1 million for 2020
- If a £1 billion valuation is reached, the Made.com IPO will be the sixth-largest London listing in 2021
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