The owner of the MusicMagpie website, which helps consumers trade in unwanted games consoles and mobile phones, is plotting a swoop onto the London stock market.
Sky News has learnt that Entertainment Magpie Holdings has asked investment banks to pitch for a role on an initial public offering of the company’s shares later this year.
The timing of a float has yet to be decided, and will partly depend on the company’s performance in the important post-Christmas trading period, according to City sources.
Entertainment Magpie is backed by NVM Private Equity, an investment firm which has helped to fund the company’s pledge to pay consumers for items on the same day that they are received by its warehouse.
The MusicMagpie website initially focused on items such as DVDs but has shifted more broadly into items including mobile phones, tablets and laptop computers.
The company’s most recent set of accounts filed at Companies House, which cover the eight months ended 31 May 2016, suggested it was on course to become the UK’s biggest consumer electronics recycler within a year.
“Management believes that the strength of the business’s multi-sales channel approach, together with its operational and logistics strength, ongoing technology development, unique customer proposition, efficient marketing practices, and excellent customer service practices will cement the ambitions of the group to be known as ‘The Recommerce Company’,” the accounts said.
During the period, it made earnings before interest, tax, depreciation and amortisation of £2.275m on turnover of £52.6m.
According to a list published by Entertainment Magpie to coincide with a post-Christmas rush to cash in on unwanted festive gifts, many households could earn hundreds of pounds by trading books, games and handheld electronic devices.
The company has expanded to the US, where it trades as Decluttr, and it has forged important relationships with sales channels such as Amazon and eBay.
It was previously chaired by Allan Leighton, the businessman whose CV includes stints at the Co-op Group, Royal Mail and Asda.
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A spokeswoman for NVM declined to comment on its float plans for Entertainment Magpie.
If it does go public, it could join companies such as Chargemaster, the electric vehicle-charging group, and Funding Circle, the peer-to-peer lender, as debutants on the London Stock Exchange.
Source: Sky