PureGym, the UK’s biggest health and fitness club operator, may decide to postpone plans to float on the stock market in a move that would have valued it at £1.5bn.
The company, majority-owned by private equity firm Leonard Green & Partners, could decide as soon as this week to shelve its proposed listing, Sky News reported.
However, the company told Yahoo Finance UK it was not commenting on the report.
‘’The volatility surrounding newly listed company is clearly causing nervousness among firms with plans for IPOs,” Susannah Street, senior investment and markets analyst at Hargreaves Lansdown, told Yahoo Finance UK.
For instance, The Hut Group has seen its shares plunge more than 60% since listing last September, with worries abound about the group’s future profitability.
Moonpig (MOON.L) has also disappointed investors, despite a soaring start following its IPO earlier this year
Deliveroo suffered a disastrous public market debut earlier this year, with shares slumping 30% on the first day of trade.
Street also said that although the FTSE 100 (^FTSE) regained lockdown losses on Friday (it opened at a 20-month high, after posting its best daily close since August the session before) the gains haven’t done much to give a "shot of medicine to companies which have gone distinctly off colour following their recent listings."
“With interest rates forecast to rise, a higher yield environment makes the future cash flows of growth stocks less attractive, and that is also weighing on investors’ minds who might ordinarily be interested in putting their money into a new listing which promises future growth.”
PureGym had also once before decided to abandon plans for a UK listing following the UK’s vote to leave the EU in 2016.
Then in July this year, when it opened its doors to customers once again after being shut during national lockdowns, those plans were revived.
At the time, it had said it was “well-positioned to take advantage of this post-pandemic recovery” and opportunities presented by a weakening of competition over the past 18 months.
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