10 12 2013

UK firms raise £10bn from investors in 2013

Companies claw back almost two-fifths of cash paid out to shareholders since start of financial crisis

UK companies raised £10.2bn from shareholders in the first three quarters of this year, more than twice as much as was raised in 2011 and 2012 combined.

 At 59, the number of firms calling for cash so far in 2013 is higher than in any year since 2009, according to research from Capita Asset Services released on Monday.

Despite dividend payments being at a record high, companies have clawed back almost two-fifths of the cash paid out to investors since the start of the financial crisis. Capita said that since 2008, £399.3bn had been given to shareholders in the form of dividends, while £150bn had been raised in cash calls.

This year's bumper crop of fundraisings marked a turning point, said Capita, with many companies seeking cash for expansion rather than survival. British Land, for example, raised £493m in the first quarter to fund growth plans.

But some cash calls are still designed to boost companies' financial positions, including Barclays' £6bn rights issue in October and FirstGroup's fundraising.

Capita forecast that on present trends about £11.6bn would be raised by the end of 2013, the highest annual total since 2009. But it expected an even higher level of £15bn in 2014 as companies acted on improving demand and targeted growth.

Justin Cooper, the chief executive of shareholder solutions at Capita Asset Services, said: "A bounceback in the amount of capital being raised by companies is not always a sign of health for UK plc. Companies tend to tap the markets either in times of growth, to finance investment and acquisitions, or in times of need, to improve liquidity and meet debt obligations.

"While Barclays' rights issue has clouded the picture and is another round of therapy rather than expansion, the growth in the number of cash calls in 2013 does point to a positive step forwards in FTSE companies' recovery, as confidence in the economy improves, and firms begin to capitalise on stronger valuations to raise funds for investment."