Time Out makes losing start on debut

downloadTime Out tourism city magazine IPO float shares tanked Oakley CapitalTime Out’s stockmarket debut fails to dazzle: One star – needs improvement. That’s likely what the army of writers at Time Out (TMO) would be thinking if they had to review the media group’s stockmarket flotation Tuesday. Shares in the culture and entertainment mag fell 10% on their first day trading on AIM, and questions must surely be asked about the timing, coming as it does amid a major sell-off ahead of the European Union referendum next week.

Listing 130 million shares on the junior market at 150p a pop, Time Out raised £90 million for the company, valuing the business at £195 million. Woodford Investment Management was among the buyers, snapping up a 15.4% stake. However, a quick fall to 135p has wiped almost £20 million off Time Out’s market cap.

Intra-day prices have varied from a high of 158p (+5%) and a low of 135p (-13%). Granted, it’s not been an easy day on the markets, with the FTSE 100 plunging below 6,000 points for the first time since February.

Time Out has been going for 48 years, publishing content about food, drink, music, theatre, art, style, travel and entertainment. After setting up in Lisbon, Portugal two years ago, the firm attracted 1.9 million visitors last year and made a cash profit within the first 18 months.

The IPO money will be used to roll-out this “scalable opportunity” to new cities including London, Miami and Berlin, revamp its sales and marketing divisions and improve its e-commerce product. Around £8 million will cover working capital and pay the bills.

Founder Tony Elliott sold his 50% stake in the company to private equity group Oakley Capital back in 2010. Since then the group has grown its audience by around 36% a year to 111 million, developed multi-national content channels, an e-commerce platform and new advertising products.

“Time Out has been an iconic brand for many years and now is the right time for it to float,” said Time Out chairman and Oakley Capital founder Peter Dubens. “We have a compelling platform for value enhancement which is very much focussed on continued investment in the brand, the e-commerce platform and replicating the Time Out Market concept in other cities.”

Time Out generated £28.5 million revenue in the year to 31 December 2015, with over half coming from print advertising and circulation revenue. Digital advertising made £11.7 million, while other business turnover slipped to £1.8 million. Sales from Lisbon nearly doubled to £2 million, although heavy investment meant group operating losses swelled from £8.4 million to £18.5 million in 2015.

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