GOING

PIZZAEXPRESS's transition last year from a private group to a publicly listed company is an example of the benefits of securing a stock market listing. Its share price has risen from a low of 66p in April to more than £1, and the company is preparing to make use of increased funding opportunities and its higher profile to boost expansion.

The pizza chain will shortly be joined on the stock market by Forte Airport Services - possibly as early as the end of this month or in February - while the likes of Gardner Merchant and Groupe Chez Gérard may join the fray by the end of the year. Neither of the Forte-spawned groups is expected to have much difficulty attracting the necessary support, given their track records and size, but for some of the smaller companies in the list below things might not be quite so easy.

As leisure analyst Jason Streets of Charterhouse Tilney said: "The whole point of the stock market is as a forum for raising capital for businesses. Companies who simply want to replace one form of capital with another - for example venture capital with institutional shareholders - will not be welcome automatically.

"Investors are looking for companies which are growing and will be requiring additional capital to expand their business in areas where they have demonstrated competence."

Mr Streets added that very small companies - in stock market terms, having a market capitalisation of less than £20m - should consider very seriously whether they are large enough to cope with the demands of being a quoted company.

That is a view echoed by Charlie Batten, director in the corporate finance department of Kleinwort Benson Securities: "The regulation and public exposure involved with a listing can be uncomfortable for some management."

But for those who can cope the advantages are many. A higher profile automatically brings into play a number of potential sources of capital and equity closed to private companies. It also opens up a variety of ways of rewarding and motivating staff by giving them a share in their own business.

So what sort of companies normally seek a stock market listing? Mr Batten gave the following list:

lCash-hungry and expanding companies.

lBuyouts such as Gardner Merchant, BrightReasons and Jarvis Hotels.

lOver-geared companies seeking to realise cash other than by a rights issue - for example, Forte floating off its airport services division.

Note: The information given under the company name headings was provided by the companies themselves, in response to a survey conducted by Caterer in December 1993.