Investors in Freeserve, the UK’s largest internet service provider, will be making a gamble in its forthcoming IPO but it is a risk worth taking, according to John Clare, chief executive of Dixons Group Plc, the company’s owners. With the prospectus due to be issued on July 12, Clare said: The investment is in the future – it’s the future of the internet, it’s the future of e-commerce applications on the internet and it’s the future of Freeserve’s position within that.
Clare is reduced to such statements of the obvious because the London stock market remains deeply conservative and the IPO of a company without a profit and loss account is a cultural shock for analysts reared on the accountancy of an industrial age.
This is reflected in a wide variation in estimates for Freeserve’s valuation, ranging from 1.3bn pounds ($2bn) to 2.6bn pounds ($4bn). Clare sees e-commerce as the key to it making money in the future. Freeserve has a strong position today and it is up to us to hold that position as the market grows and develops in the future.
Clare was speaking as electrical retailer Dixons, the UK’s largest retailer of PCs released its annual figures. Dixons said that price deflation was a feature of nearly all its markets and the PC market grew by 27% in units but only 3% in value. However the growth in volume boosted the market for PC peripherals by 9%.
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