In something of a reality check for the electric vehicle market, Chargemaster, the UK electric car charging network, has today revealed a cancellation of the company’s forthcoming £30 million stock market float. While there was interest from institutional investors with regards to the issue of new shares, to raise £6 million, it seems as though the expected valuation of around £32 million was a little heady for some investors.
The company had originally intended to use the expected £6 million flotation funds to finance the next stage of development of its UK electric car charging network. It is unclear at this moment in time what the company will do to finance the next stage of development and, while this is a setback in the short term, it should have no real impact in the medium to longer term.
The company itself is 50% owned by David Martell who was the founder of Trafficmaster, a successful satellite navigation system, Other investors include, BMW and Lord Beaverbrook, the well-known ex-Conservative treasurer. The company has in the past used the £500,000 investment by BMW as a means of rubberstamping its "blue chip" credentials and the fact is that BMW and Chargemaster are working very closely together.
Quote from ElectricForum.com : "I'd like to pose a dilema that cities all over the world are dealing with. Private resident EV owners who park in the street because they don't have a driveway. How do they charge their car?"
It will be interesting to see whether existing investors are willing and able to stump up additional funding in the short to medium term or whether the company decides to bring in private investors ahead of a potential stock market flotation further down the line.
Is this a bitter blow for the UK electric vehicle market?
On the surface it is easy to assume that the cancellation of Chargemaster's planned UK stock market flotation is a bitter blow to the industry but perhaps we need to take a look at not only the industry itself but also the worldwide situation. At this moment in time we have serious political strife in many countries around the world and indeed the U.S. government is talking about attacking Syria in light of the recent alleged use of chemical weapons.
When you also take into account the relatively slow uptake of electric vehicles across the UK to date, perhaps it is no real surprise to learn that investors are shying away from new share issues and new markets at this moment in time. It is also worth noting that the UK government is still making available tens of millions of pounds in funding for the creation of a UK wide electric vehicle charging network, something which Chargemaster is heavily involved with.
It will be interesting to see the array of new products and new services which Chargemaster will roll out in the short to medium term and indeed how the company expects to fund its ongoing expansion. There is no suggestion that the company is struggling, there is no suggestion that finances are tight, although at some stage we would expect to see confirmation of the company's future financial strategy bearing in mind the cancellation of the proposed stock market listing.
As we have mentioned on numerous occasions, the ongoing development of the electric vehicle market will not be straightforward, will have ups and downs although many people believe that ultimately it will be highly successful.