MHA, the UK member of Baker Tilly International and formerly known as MacIntyre Hudson, has completed a month since launching its initial public offering (IPO) on London's AIM market. This significant step has elicited mixed reactions from analysts and investors, largely due to the turbulent market conditions surrounding its launch. Uncertainty in global equity markets, particularly associated with Donald Trump’s tariff announcements, had led many investors to exercise caution.
As MHA embarked on this public venture on 15 April, it targeted a valuation of £350 million and sought to raise £125 million. Ultimately, the firm raised £98 million, achieving a market capitalisation of £271 million at the time of listing. Following a promising debut, with share prices rising 2.5% from an opening price of 100p, MHA’s current share price stands at 103.75p.
Beyond the IPO specifics, MHA has set ambitious goals for the future. The firm aims to become one of the top 10 accounting and professional services businesses in the UK, with a medium-term revenue target exceeding £500 million. The drive for growth is underscored by an impressive revenue increase of nearly 30% last year, bringing in £180 million. In this climate of competitive growth within the industry, MHA's strategy notably diverges from other accountancy firms that have turned to private equity for funding. CEO Rakesh Shaunak explained that while private equity can be advantageous, MHA has prioritised maintaining control over its strategic direction, stating, “the higher potential short-term gains from private equity were outweighed by the important distinction that the control of our strategic destiny and planning will remain in the hands of our board and our partners.”
MHA's recent activities indicate a proactive approach in seizing market opportunities. Just last week, it announced its first acquisition post-IPO: the purchase of Baker Tilly's operations in Cyprus and Greece for €24 million (£20.1 million). This firm is positioned as the fifth largest accountancy firm in Cyprus, boasting notable clients across the financial and government sectors. The acquisition will be funded through a combination of cash and the issue of new ordinary shares.
Investment analyst Dan Coatsworth from AJ Bell offered a measured perspective on MHA’s early performance, noting that though the company has underperformed relative to the broader stock market—returning 5% versus the FTSE All-Share’s 6.2%—this is still a positive outcome for a new listing. He remarked, “It’s still early days for the company,” emphasising that many investors typically await the release of a few sets of financial results before committing fully to a newly listed entity.
Looking ahead, MHA is not just focused on organic growth; it is also exploring strategic acquisitions within the Baker Tilly network, promising further expansion and integration in the market. This approach indicates a commitment to achieving its ambitious revenue goals while simultaneously navigating the complexities of a public listing.
In summary, while MHA's first month as a public company has not been without its challenges, the strategic decisions taken thus far have positioned it for growth, with promising acquisitions and a clear long-term vision. The coming months will be crucial as the firm continues to solidify its presence in the competitive accounting landscape.
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Source: Noah Wire Services