WA IPO activity continues to grow

Deloitte's corporate finance survey has shown a recovery in stock market floats in Western Australia in the past financial year, though the annual data disguises a slump in activity in recent months.

Western Australia produced 63 IPOs in the year ending 30 June 2011 (FY11), almost double the 33 IPOs in the previous financial year.

The value of funds raised through IPOs also increased sharply, up from $266 million to $604 million.

The top WA IPO for FY11 was from coal mining company Blackgold International, that raised more than $70 million.

Mining and civil services contractor Maca, McPherson's Reward Gold, GR Engineering Services and PMI Gold Corporation made up the top 5 WA IPOs for FY11.

Deloitte Corporate Finance partner, Andrew Annand, said Western Australia again generated more IPOs than any other state in 2010, and accounted for five of the 10 best-performing floats, again led by the resources sector.

Across the country, the Deloitte Corporate Finance IPO survey shows that FY11 produced 123 floats, almost double the number in the previous financial year.

The value of funds raised from investors has also climbed strongly, up from $4 billion in FY10 to $7.6 billion in FY11, however, Mr Annand said the strong-looking numbers belied a disappointing second half of the year for IPO activity.

"The value of funds raised reflected two big-value floats earlier in the year of QR National and Westfield Trust, which together raised almost $6.1 billion. The number of floats was boosted by activity in the resource sector, which produced 95 IPOs, or almost 80% of all the floats for the year," Mr Annand said,

"The successful listing of Queensland Rail in particular raised expectations for the IPO market in the new year, however, overall the market has failed to live up to these expectations, with many businesses foregoing a listing, often in favour of a trade sale. The equity market simply couldn't match the valuation expectations of vendors or those achieved through private sales."