Leeds University spin-out receives chilly reception

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​ENVIRONMENTALLY friendly washing machine company Xeros​ received a cool welcome when it floated on AIM yesterday, triggering worries that the appetite for IPOs could be flagging.

​​The group, a Rotherham-based spin-out from Leeds University, ​saw its share price slide 10.5 per cent to 110p on its first day of trading​, wiping several million off its initial market cap of £80m.

The group raised £27.​6m at 123p per share. ​

Analysts said the fall could be the first sign of fatigue in the IPO market as dozens of companies queue up to float as the economy shows strong signs of recovery. Shares in Pets At Home also fell on their market debut last week.

Analysts​ said that Xeros was very hard to value as unlike a retailer there is no real sense of how much the business can achieve going forward.​

“These things are very difficult to value,” said one Yorkshire analyst.

“That’s the problem with early stage businesses. It’s very reminiscent of the dotcom era. Often it’s hard to say what profits they will make.”

Despite the chilly reception, Xeros’ management remained upbeat. Chairman John Samuel​ ​said: ​​“Joining AIM marks a milestone for Xeros and we look forward to growing the business using the proceeds of the​ ​placing and creating value for all of our stakeholders.”

Chief executive Bill Westwater said Xeros’ patented reusable and recyclable polymer bead cleaning systems have the potential to transform a number of industries around the world​.​

“We are excited about the opportunity the placing and our admission to AIM brings to help accelerate our roll-out in commercial laundry and fund development through to commercialisation in other identified markets,” he said.

Finance Yorkshire, which has invested a total of £1.45 million in Xeros, was also confident.

Alex McWhirter, chief executive of Finance Yorkshire, said: “Xeros is a great Yorkshire success story – an outstanding example of a technology-based company that has developed through innovation and some fantastic engineering an idea which now has huge potential to revolutionise the commercial and domestic laundry sectors.”

Tomas Pietrangeli, Managing Director, Arla Foods UK, Photo: Adrian Forrest

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