Consultant plans £200m flotation for 11 February, despite falling share prices at rival firms
Consultant Turner & Townsend plans to float on the stock exchange within days, despite the market turmoil.
It is understood that the £173m-turnover group will begin trading as a listed company on 11 February after signing a deal next week. City experts speculated at the end of last year that it would have a market value of £200m.
The move is well ahead of its original flotation deadline at the end of March and comes as share prices at recently floated consultants Baqus and Cyril Sweett are struggling (see graph).
Since Baqus floated in December the share price has fallen from 12.25p to 10.25p. Cyril Sweett’s has dropped from £1.10 to 87.5p since October.
A Turner & Townsend spokeswoman dismissed the poor performance of rivals and impact of the credit crunch. “Despite everything that’s going on in the market we are still on track with the flotation.”
The move has raised eyebrows in the City. One analyst said valuations had fallen by about 30% after the credit crunch, which would give a value closer to £150m.
Another analyst said: “I’m surprised because the peer group ratings are so low. I would have thought the expectations would have reduced significantly and must be much lower than £200m now.”
Another said: “The general news from the consultancy sector isn’t too bad but that doesn’t mean the stock market will put money on the table for a float.”
Richard Steer, senior partner at Gleeds, said it was surprising because the stock market did not appreciate how consultancies worked. “We’re not the most brilliant performers. Investors have never been interested in the vagaries of our industry.”