SCOTTISH companies are preparing to float on stock markets in the greatest numbers seen for years in what could provide a big boost to the country’s standing in the business world.

After the stock market recovery from the pandemic’s impact fuelled a surge in flotations and related initial public offerings of shares in 2021 year more are in prospect this year in a development that reflects Scotland’s prowess in key growth industries.

READ MORE: Scottish firms in sights of bidders as pandemic puts focus on supply chains

Mike Timmins, IPO leader Scotland at accountancy giant EY, said corporate financiers are talking to a range of firms that are weighing up a move into the listed world.

“There are a lot of conversations going on,” he noted, adding that EY is speaking to “at least half a dozen” firms.

HeraldScotland: EY Scotland IPO Leader Mike TimminsEY Scotland IPO Leader Mike Timmins

Mr Timmins declined to give any details. However, he highlighted the fact that Scotland is well represented in sectors that are attracting lots of investor interest, such as technology, life sciences and energy.

Mr Timmins also noted strong interest in firms operating in the “well-being” space and in those working in areas related to the ESG (environmental, social and governance) and sustainability agendas.

Scotland is recognised for the strength of the country’s technology and life sciences sectors, which are supported by world class universities. The North Sea oil and gas industry and power giants based in the country have helped make the country a force in the evolving energy sector.

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But firms operating in more traditional sectors could also generate interest among investors.

For example, the fallout from the pandemic has provided a spur to the house-building sector, amid strong demand for homes that offer enough space for people to work in.

The flotations completed by Scottish firms over the last 18 months reflect these factors.

Telecoms infrastructure testing specialist Calnex listed in October 2020 followed last year by the Parsley Box meal delivery operation, smart battery developer AMTE Power, subsea equipment firm Ashtead Technology and Artisanal Spirits, which owns the Scotch Malt Whisky Society.

HeraldScotland: The Scotch Malt Whisky Society's Glasgow members roomThe Scotch Malt Whisky Society's Glasgow members room

All four listed on the junior Aim exchange, rather than the main market, ending a long drought in terms of Scottish firms demonstrating the confidence to go public. Calnex was the first Scottish company to float since Edinburgh-based fintech Nucleus Financial joined Aim in 2018.

Mr Timmins said buoyant stock market conditions may have encouraged firms to float.

While geopolitical tensions, inflationary pressure and the prospect of interest rate rises have dampened sentiment in recent weeks, the FTSE-100 is still in line with pre-pandemic levels.The Omicron variant has had less impact on economic activity than was feared.

Mr Timmins noted that there has been widespread reluctance to go down the public route among business owners in Scotland, where many have preferred to rely on private funding.

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The successful flotations completed last year could encourage some to think again. The four firms concerned raised around £110 million in total though related IPOs. Private equity firms may decide it is a good time to use flotations to realise some of the investments they have made.

Listed companies generate work for professional services firms in Scotland and help to keep the country on the map amid competition for investor interest. Scotland has lost a number of listed companies in recent years.

In August Nucleus Financial was acquired by Salisbury’s James Hay for £145m. Glasgow-based generator giant Aggreko was bought by private equity investors for £2.2 billion in March.

READ MORE: Fintech entrepreneur lands new job after £145m takeover of Nucleus Financial business he founded

Some firms might regard potential vulnerability to takeover as a reason not to list.

However, Mr Timmins said having a listing could make it easier for firms to raise capital. Listings can raise the profiles of companies while the associated regulatory and governance requirements can increase confidence in them among stake-holders.

Flotations can also provide a way for owners to realise some value from firms while retaining more control than might be possible if they decide to seek backing from a private equity business.

Artisanal Spirits Company and Parsley Box are based in Edinburgh. Calnex has headquarters in Linlithgow. Ashtead Technology and AMTE are based in Aberdeen and Thurso in Caithness respectively.

EY said 2021 was a record year for the London markets. There were 17 main market flotations in the last quarter alone, during which 22 firms were admitted to the Aim market.

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In the IPO Eye report its published earlier this month, the firm said: "IPO fundamentals for UK exchanges remain strong and pipelines are healthy for early 2022."

However, it said the outlook for 2022 was much less certain compared to last year citing a number of prevailing headwinds including inflationary pressures, supply chain issues and weaker consumer spending due to energy price rises.