Freight firm EV is eyeing a £1billion float in London if the flops stop!
One of the UK’s biggest logistics companies could stage a London IPO worth over £1bn – provided the series of stock market flops ends
One of the UK’s biggest logistics companies could stage a London IPO worth over £1bn – provided a series of stock market flops ends.
EV Cargo, backed by private equity, is considering an IPO either in Britain, which is its main market, or in Hong Kong. New York, the hometown 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 debut in the UK if other companies successfully launch floats on the London Stock Exchange following the fall of some high-profile IPOs.
On the move: EV Cargo transports goods for companies like Asos, Primark and Next
EV Cargo transports goods for companies such as Asos, Primark, Next, Asda, Sainsbury’s, Kraft Heinz, Dyson, AB InBev and Fever-Tree.
It operates and manages road, ocean and air freight with a network of 9 million square feet of warehouse space and 20,000 delivery vehicles. The company employs 5,000 people in Britain, including 2,200 drivers.
Zarin said EV Cargo aims to become one of the world’s top 20 logistics companies by both growing its own businesses and taking over others, so a flotation is a “possible step,” but he doesn’t. 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 headquarters, so an IPO there could be attractive, especially as an expansion strategy is underway in Asia. Zarin said Wall Street could also have some upside, especially with a potential U.S. acquisition looming.
“Any of these three would be under consideration as a place to register and each has its respective strengths,” he said. “Unfortunately the London Stock Exchange has had a few public listings in recent years which have not gone as well as they could have.
“A key thing would be to see success stories happen there. It would be encouraging.
“We’re a technology-based logistics company born in the UK but competing globally, so that’s something we would definitely consider.”
London has seen a series of unsuccessful flotations over the past 18 months. Online food delivery company Deliveroo got off to a disastrous start in March last year and is now worth just a quarter of its opening price.
Flotations from Dr Martens and Moonpig initially looked promising, but both are now also underwater, with shares down around 30% and 40% respectively.
The London market has had a difficult first half of 2022, with IPO proceeds down 94% compared to the same period last year, according to accounting giant EY.
EV Cargo, like others in the industry, has experienced supply chain strains caused by the Covid-19 pandemic.
Problems caused by shortages of truck drivers and port workers persist, Zarin added, although they have eased recently.
EV Cargo is trying to offset the increased payroll by finding cost savings and using innovative technologies.
It also has to deal with soaring energy costs, some of which are passed on to customers.
However, despite all this, Zarin describes himself as “more optimistic” than some observers.
He said “consumers still have money” and are spending it.