Thirty travel and leisure sector firms raised billions of pounds in additional capital in the wake of the Covid-19 pandemic, new research reveals.
The decade-high surge in capital raising from by listed industry companies has seen £5.5 billion injected from institutional and retail investors to repair balance sheets following the pandemic and social restrictions.
Hotel groups raised £101 million, led by Ireland’s Dalata Hotel Group, which raised £84 million.
The pandemic triggered a resurgence in UK capital markets’ activity, with money raised by listed companies in 2020 reaching its highest level in more than a decade, the study by investment bank Goodbody found.
Listed companies have raised more than £26 billion from investors on the London Stock Exchange’s main market and Alternative Investment Market, surpassing the highest annual level since 2009.
A total of 463 businesses have completed transactions to raise additional capital so far this year.
The distribution of transactions has closely mirrored the impact of the pandemic, with both the volume and magnitude of transactions peaking in April following the first UK lockdown, and beginning to increase once again as the second wave of cases gathers momentum and regional restrictions are implemented.
Consumer discretionary sectors, which include the automobile, consumer services, and travel and leisure sectors, saw the greatest value of capital raised, to a total of £11.4 billion.
Piers Coombs, head of Goodbody’s London office, said: “The sectors that have raised the most capital will come as no surprise, as retail, travel and leisure businesses have all looked to repair their balance sheets following the devastating impact of the pandemic.
“However, as we look forward we hope that these companies will continue to be able to turn to capital markets as they plan for future growth in 2021 and beyond.”
He added: “In the face of crisis, we have seen investors respond brilliantly to the needs of publicly listed companies.
“In recent years, a rise of passive funds and a trend towards de-equitisation has taken the focus away from the vital role active investors play in keeping equity capital markets healthy for listed companies.
“This year has firmly reversed that trend, and through institutional and retail investors giving their backing to companies at this difficult time, thousands of jobs have been protected and businesses can plan for the future.”