A combination of the company’s accounting reporting cycle, the availability of investors, the due diligence requirements of the banks and the state of the market may limit the potential opportunities during the year within which a listing may be launched:
- the typical market standard is that the company’s latest audited accounts must be no more than six months old at the date of the prospectus/ admission document (although they can be as much as nine months old) and must cover at least three full years (or such shorter period as the company has been in operation) and interim financial information if the IPO is taking place in the second half of the Company’s financial year.
- if there is a US offer requiring the delivery of the US SAS 72 comfort letters from the reporting accountants, the applicable US accounting standards require that the IPO be completed within 135 days of the date of the last audited or reviewed financial statements;
- the FCA approval process means that at least 8 weeks is required from submission of a draft registration document/prospectus to the FCA to approval of the registration document for publication approximately five weeks before listing. The AIM process can be accomplished more quickly, however, as there is no need for the FCA to review, comment on and approve the admission document and no requirement to publish a registration document;
- analysts will need time to produce their equity research following the presentation to analysts by management. Publication of this research must normally be published, in the case of a Main Market IPO, one week after publication of the company’s registration document and typically two weeks before the roadshow commences;
- UK institutional investors are generally considered not to be available for marketing of new offerings over the summer holiday season from mid-July through the end of August and the Christmas holiday period from mid-December to early January; and
- the state of the market and appetite of investors is critical to a successful listing, which may impact the timing for any given transaction.
The overall effect of these requirements is that a company with a 31 December financial year-end will typically try to complete a listing between March and May (based on its audited annual results) or between September and November (based on audited interim results). The opportunities for listing by companies with other year-end dates will differ accordingly.