One of the UK’s largest logistics firms may stage a London flotation worth more than £1 billion – provided a series of stock market flops comes to an end.
Private equity-backed EV Cargo is considering an initial public offering either in Britain, which is its main market, or Hong Kong. New York, home city of the company’s chief executive, Heath Zarin, could also be an option.
Zarin told The Mail on Sunday that the company would be more likely to make its debut in the UK if other companies launch successful floats on the London Stock Exchange in the wake of some high-profile IPOs falling flat.
On the move: EV Cargo transports goods for businesses including Asos, Primark and Next
EV Cargo transports goods for businesses including Asos, Primark, Next, Asda, Sainsbury’s, Kraft Heinz, Dyson, AB InBev and Fever-Tree.
It operates and manages road, sea and air freight with a network of 9million sq ft of warehouse space and 20,000 delivery vehicles. The company employs 5,000 people in Britain, including 2,200 drivers.
Zarin said EV Cargo is aiming to become one of the world’s top 20 logistics firms both through expanding its own businesses and by taking over others, so a flotation is a ‘possible step’, but there is no timetable in place.
‘We would, of course, consider a listing on the London Stock Exchange,’ he said. However, Hong Kong is home to the company’s global HQ, so a flotation there could be attractive – especially as an expansion strategy is under way in Asia. Zarin said Wall Street could also have advantages – especially with a looming potential acquisition in the US.
‘Any of those three would be under consideration as the listing venue and each has its respective strengths,’ he said. ‘Unfortunately, the London Stock Exchange in recent years has had a few public listings that haven’t gone as well as they could have done.
‘A key thing would be to see some success stories occurring there. That would be encouraging.
‘We are a technology-enabled logistics business born out of the UK but competing on a global basis, and so it is something that we certainly would be considering.’
London has seen a string of unsuccessful flotations over the past 18 months. Online food delivery company Deliveroo had a disastrous debut in March last year and is now worth just a quarter of its opening price.
Flotations of Dr Martens and Moonpig initially looked promising, but both are now also underwater, with shares down by about 30 per cent and 40 per cent respectively.
The London market has had a tough first half of 2022, with a 94 per cent drop in IPO proceeds compared with the same period last year, according to accountancy giant EY.
EV Cargo, like others in the sector, has been experiencing supply chain strains brought on by the Covid-19 pandemic.
Problems caused by shortages of lorry drivers and port workers continue, Zarin added, although they have recently eased.
EV Cargo is trying to offset rising wage bills by finding cost savings and through the use of innovative technology.
It is also having to deal with soaring energy costs, some of which are being passed on to customers.
However, in spite of all this, Zarin described himself as ‘more optimistic’ than some observers.
He said ‘consumers still have money’ and are spending it.
This post first appeared on Dailymail.co.uk
