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May 27, 2014

Telecoms firm Timico delays London flotation due to poor market conditions

Firm cites poor performance of recent IPOs in its decision to postpone.

By Jimmy Nicholls

Telecoms firm Timico has postponed its IPO due to take place on the London Stock Exchange this Friday, citing "adverse market conditions".

The flotation on the Alternative Investment Market (AIM) was intended to raise £15m, as 27.3% of the estimated firm was put on the market. The company hoped to reach a market valuation of £55m by the end of the first trading day.

Tim Radford, chief executive of Timico, said: "We have a duty to our existing shareholders to ensure that the success of our IPO isn’t eroded by recent IPOs performing less well than expected and hence have made the decision to postpone our process."

He added that the firm had been "encouraged" by interest in the IPO, and hoped that the current perception of smaller companies looking to raise money would resolve itself shortly so the firm could list.

The telecom firm’s withdrawal follows a similar decision by online retailer the Hut, which announced yesterday that it would abandon its flotation over concerns about the sustainability of share prices.

Freddy Crossley, director at Panmure Gordon, nominated advisor and broker for the Timico flotation, said: "Things have certainly been more difficult than they have been for the last few months. You have to look at many of these e-Commerce sites that have raised a lot of money and haven’t performed very well. There’s been some IPOs that recently have done quite poorly."

"Timico’s got the luxury of a very strong balance sheet. It’s got very good cash flow. It doesn’t need an IPO at the moment. Right now I think they’re looking at coming back at a time where there’s more clement market conditions."

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Last year company revenue grew by 10.4% to £42.5m, and ebitda (earnings before interest, taxes, depreciation and amortisation) by a third to £4.9m, with the firm investing £5m in a data centre in Newark, Nottingshire.

Since its creation a decade ago Timico has bought up a number of telecoms firms, including Atlas Internet, NewNet and Powernet, with the company intending to continue its programme of acquisitions following the flotation.

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