Capital raising from UK-listed corporates fell very significantly in the first half of 2022. The travel and leisure sector has witnessed one of the largest drops when compared to the first half of 2021, as businesses in the sector raised a total of £531 million in 2022, down from £2.5 billion in in the second half of last year and £2.2 billion in the first half of 2021.
This shows that, despite output growth continuing to rise following the dwindling impact of the pandemic, the sector has already started to see the effects of inflation and rising costs, as purchasing power and consumer demand begins to wane.
Analysis of London Stock Exchange data on capital raising from investment bank Goodbody shows that in H1 2022, just £5.7bn in new capital was raised by UK listed companies, the slowest start to a year in nearly a decade. When excluding listed investment vehicles, this figure falls to £2.5bn.
The analysis demonstrates a marked shift from the last two years, where corporates adversely impacted by the pandemic turned to investors to shore up their balance sheets. Capital raising in the first six months of 2022 is less than 50% of that in the first half of 2021, and around a third of the amount raised in the first half of 2020.
Piers Coombs, Head of Goodbody’s London office, said: “Following the record pace of fundraising during the pandemic, there is a very different tone to Equity Capital Market activity so far this year. With such a sharp move in valuations across almost all sectors – the FTSE250 is down 19% so far this year – there is little momentum behind PLCs’ desire to raise new capital. For now, it’s all about honing strategy, starting buyback programmes if appropriate, and focusing on what management can control.”