Iconic boot brand and online greeting card platform kickstart what could be a banner year for IPOs
Thursday 14 Jan 2021 Author: James Crux

A UK stock market uptick twinned with the inking of a Brexit trade deal have coaxed boot maker Dr. Martens and online greeting card platform Moonpig to pull the trigger on Main Market IPOs. If successful, these could provide the catalyst for a flurry of further flotations in 2021.

An iconic British brand once synonymous with rebellious teens and adults, Dr. Martens’ IPO is likely to attract the attention of investors both in the UK and abroad given the brand’s potential for growth in a £341 billion global footwear market.

One of the world’s most recognised footwear brands, Dr. Martens benefits from a loyal customer base, sells more than 11 million pairs of footwear annually in over 60 countries and generated a healthy EBITDA (earnings before interest, tax, depreciation and amortisation) of £184.5 million on £672.2 million sales in the year to March 2020.

Though it sells its footwear through more than 130 of its own retail stores and via wholesale customers, distributors and franchisees, e-commerce is expected to remain the key growth driver over the coming years as Dr. Martens increasingly sells direct-to-consumer in a bid to control its own destiny.

Despite months of Covid-induced store closures, Dr. Martens has performed strongly during the course of the pandemic, though red flags include its period under private equity ownership and consumer grumblings over dwindling product quality.

Private equity outfit Permira has owned the business since 2014 and whereas Dr. Martens was once renowned for its long-lasting footwear, a production shift to Asia nearly 20 years ago could be a reason behind the apparent deterioration in quality.

Private equity backed online greeting card-to-gifting platform Moonpig is also on its way to the Main Market in one of the new year’s hotly-anticipated debuts. Trading as Moonpig in the UK and under the Greetz brand in Holland, the online personalised cards purveyor has proved to be a lockdown winner as the pandemic sent sales soaring.

For the six months to October 2020, Moonpig’s revenue was £155.9 million, up 135% year-on-year, with £120.8 million contributed by the Moonpig segment and £35.1 million by the Greetz segment.

In the IPO announcement (12 Jan), Moonpig insisted it is a highly cash generative business, ‘due to its high margins, an attractive negative working capital profile and relatively low capital expenditure requirements’.

A new management team of chief executive Nickyl Raithatha, finance director Andy MacKinnon and respected former WHSmith (SMWH) boss Kate Swann, in the chair since August 2019, is positioning Moonpig as a technology play as it uses customer data and predictive technology to remind people of key events and suggest add-on gifts. [JC]

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