16th Apr 2021 10:17
(Alliance News) - musicMagpie PLC on Friday became the latest firm to announce plans for a listing on AIM.
The 're-commerce' site, which specialises in reselling refurbished consumer technology, said it plans to raise GBP15 million for the company and GBP95 million for selling shareholders in its initial public offering.
Based on the placing price of 193 pence, it expects a market capitalisation of GBP208 million on admission and is aiming to start trading on AIM on April 22, it said.
The placing of shares attracted strong support from investors and was "comfortably over-subscribed", the company said. Proceeds raised will be used to repay existing debt facilities and fund working capital requirements, mainly into the expansion of its smartphone rental offering.
Founded in 2007, musicMagpie is a re-seller of used consumer technology, including smartphones, tablets, consoles and computers. It has an established presence in the UK, with operations in Stockport, Greater Manchester, and in the US in Atlanta, Georgia.
The re-commerce firm has grown considerably in recent years, with revenue increasing 33% to GBP153.4 million in November 2020, compared to GBP115.5 million in 2018. Earnings growth has been similarly impressive, with earnings before interest, tax, depreciation and amortisation growing to GBP13.9 million in 2020 from GBP2.6 million two years before, a compound annual growth rate of more than 130%.
musicMagpie claimed the market for pre-owned consumer technology and physical media is worth about GBP9 billion in the UK and US, with the market for used consumer technology expected to grow by more than 10% per year.
Its environmental track record means musicMagpie is expected to qualify for the London Stock Exchange's Green Economy Mark on admission, which recognises companies that derive at least 50% of revenue from products and services that contribute to the global 'green economy'.
"We are thrilled that musicMagpie's circular economy model has resonated so strongly with investors, and are delighted to have received such a high level of demand for the placing," commented musicMagpie Chief Executive and Co-Founder Steve Oliver.
"Given the ongoing move to tackle the growing problem of e-waste and the fact that consumer attitudes towards buying refurbished consumer technology products are rapidly changing, we believe that there is significant potential for musicMagpie's future growth prospects. In the UK alone, we estimate that people are sitting on around GBP16.5 billion worth of technology that they no longer use, and that only a small percentage of consumer technology items are currently recycled.
"The listing on AIM of musicMagpie reflects not only the success that we have enjoyed to date but also our confidence in our ability to capitalise on the favourable long-term trends that continue to drive the company's strong performance."
Despite the disastrous debut of Deliveroo PLC earlier this month, with the stock dropping by a third, the IPO market in London is in good health so far this year after many firms abandoned plans to list in 2020 due to the coronavirus crisis.
By Will Paige; [email protected]
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