Most companies that abandon a flotation do not fail because the market turned. They fail because the diligence found something — a restatement, a related party arrangement nobody had documented, a forecast the finance team could not support — and by then the cost of fixing it exceeded the cost of stopping. IPO readiness is the work that happens 18 to 24 months before anyone speaks to a bank, and it is mostly unexciting.
The financial track record
The first question is whether the company can produce an audited historical financial record on the basis a prospectus requires, covering the last three years, prepared consistently under the reporting framework the listing will use. For a private company that has reported under FRS 102 and will list under IFRS, that means a conversion exercise — restating three years of comparatives, resolving the differences that matter (revenue recognition, leases, financial instruments, share-based payments, business combinations) and being able to explain every one of them.
Conversion takes longer than finance teams expect, not because the accounting is hard but because the underlying data frequently does not exist in the form the new standard needs. Lease data, contract terms and share option histories are the usual culprits.
Alongside it sits the audit question. A company that has been audited by a small firm may need a different auditor for the transaction, and changing auditor in the middle of a listing process is disruptive. That decision is better taken early, and it is one of the few genuinely irreversible steps in the timetable.
Controls, forecasting and the working capital statement
A listed company has to make a working capital statement — a public assertion that the group has sufficient working capital for at least the next twelve months — supported by a model that the reporting accountant and the sponsor will test hard. This is the single most common place where readiness work reveals a gap, because it requires something many private companies do not have: an integrated three-statement model, driven by documented assumptions, capable of running downside scenarios that are genuinely severe rather than notionally cautious.
The same exercise tests the financial position and prospects procedures — the framework of systems, controls and reporting that lets the board say it can run a public company. Boards discover here that month-end takes three weeks, that the forecast is a spreadsheet one person maintains, and that there is no process for producing results to a market deadline. None of that is fatal 18 months out. All of it is fatal three months out.
The corporate housekeeping nobody budgets for
Legal and structural diligence generates the longest list, and the items are individually small:
- The statutory books — a complete, accurate share register and a documented chain of every allotment and transfer. Reconstructing this late is the classic readiness fire drill;
- Share schemes — options granted informally, EMI schemes with valuation or notification defects, and arrangements that need to be settled, rolled over or regularised before listing;
- Related party arrangements — loans to and from directors, property leased from a shareholder, family members on the payroll. None of these is necessarily improper, and all of them must be identified, priced at arm's length, disclosed or unwound;
- Group structure — dormant entities, overseas subsidiaries without local compliance, and intra-group balances that have never been reconciled;
- Tax — historic positions that a buyer of shares would insist on quantifying: employment status, VAT treatment of a significant revenue line, transfer pricing, and any relief claimed on a basis that would not survive review.
Governance and the board you will need
A listed board looks different from a private one: independent non-executives, an audit committee with a member having recent and relevant financial experience, a remuneration committee, terms of reference, and a documented division of responsibility between chair and chief executive. Recruiting genuinely independent directors takes months, and doing it late produces appointments made for availability rather than fit.
The finance function itself usually needs strengthening. Investor relations, a group reporting capability and someone who has done this before are the three additions that most often prove decisive — and the third is worth more than the first two.
A realistic sequence
Eighteen to twenty-four months out: gap assessment across financials, controls, tax, legal and governance; decide the reporting framework and start conversion; fix the statutory books. Twelve months out: appoint advisers, begin the financial position and prospects review, build the model that will support the working capital statement, recruit non-executives. Six months out: audited track record complete, diligence questions answered rather than discovered, board functioning as a listed board. Three months out: execution.
The value of doing it this way is not only the listing. Every item on that list — clean books, a supportable forecast, arm's-length related party terms, a functioning audit committee — makes the company more valuable and more saleable whether or not it ever lists. Companies that complete readiness and then choose a trade sale instead rarely regret the work.
Acumon supports readiness through reporting accountant work, financial due diligence and IFRS conversion, with financial modelling for the working capital assessment and corporate governance support for the board that has to sign it. If a listing is being discussed for next year, the gap assessment is this quarter's work.