Work Service Debuts on the London Stock Exchange

Work Service, the largest Polish company providing human resources management services, has been listed on the London Stock Exchange (LSE) since Thursday as part of a so-called technical dual listing.

The company, valued at PLN 800 million, is thus simultaneously listed on the Warsaw Stock Exchange and the London Stock Exchange, and the share price on both markets is directly linked and denominated in Polish zlotys and British pounds.

Work Service's entry onto the main market of the London exchange on Thursday is the realization of last year's announcement by the Chairman of the Supervisory Board, Tomasz Misiak, who emphasized that the listing on the new market does not, for the time being, involve the issuance of new shares or a capital increase.

"The completion of the dual listing process is another step for us in building Work Service's position on international markets. (...) We are convinced that our presence on the London exchange will help us strengthen our position as a regional leader in the industry and ultimately enter the top five companies providing HR services in Europe," said Maciej Witucki, President of the Management Board of Work Service, quoted in the market release.

Adam Jenkins, President of Work Service International, emphasized in an interview with PAP that the decision to enter the London exchange was motivated by the desire to reach a wider group of international investors. "Thanks to this, we have become a pan-European company that goes beyond just emerging markets," he assessed. As he noted, while the company currently has no plans to raise new capital, potential future issues could take place via the London exchange.

Jenkins admitted in the interview with PAP that the decision to enter the London trading floor is related to "structural challenges" associated with the Polish capital market. "Foreign investors are more willing to take risks, aware of sectoral challenges, and finally, there are simply more of them," he emphasized.

Next month, the company's management is scheduled to hold investor meetings in key European financial capitals, including London and Frankfurt.

As assessed in an interview with PAP by Przemysław Malicki from the consulting firm ProPrimo, which together with the law firm Kochański Zięba i Partnerzy and the law firm Pinsent Masons advised on the Work Service debut process in London, expanding into foreign markets has become a natural direction for Polish companies seeking new capital following the reform of Open Pension Funds (OFE).

"For many years, OFEs were a natural provider of capital for Polish companies. It was a constant source of several billion zlotys annually for investment in Polish companies, which gave other market participants, including foreign and individual investors, a guarantee of stable development. Cutting off this capital through the OFE reform, as well as the increase in political risk associated with investing in Poland, caused investors to turn away," said Malicki.

"We cannot comment on the situation of individual companies, but we are observing increased interest in our exchange in the Central and Eastern Europe region," confirmed Axel Kalinowski, responsible for business relations at the London Stock Exchange in Continental Europe, in an interview with PAP.

"Considering Poland's position as the largest economy in the region and the London stock exchange as the most important capital market in Europe, there is a natural connection between the two countries," he added, assessing that in London "there are real development opportunities for companies from the region".

According to experts with whom PAP spoke and who wished to remain anonymous, introducing a Polish company to the London exchange is "relatively simple," taking into account the existence of the so-called single European passport.

As they assessed, the set of conditions required to be met before listing in London is similar to those applicable on the Polish market, which allows the process to be completed in "three to six months." The cost of conducting a dual listing depends on the size of the company, but is estimated at several million zlotys.

Work Service is the seventh company from the Warsaw market to decide on such a move. In turn, four companies — including Stock Spirits Group — are listed exclusively in London, although their operations take place mainly in Poland.

Among companies that could also enter the London exchange in the future are Asseco and LPP, the owner of the Reserved brand, which recently signed a contract worth PLN 675 million for a 25-year lease of premises on one of London's most important shopping streets, Oxford Street.

Analysts also expect such a move to be considered by companies with a significant capital share of OFEs, which might fear a potential takeover of control by the State Treasury.

Last year, two Polish companies — Migam.org and Medort — were accepted into the London Stock Exchange's prestigious ELITE program, which gathers companies with high potential for dynamic growth and facilitates their navigation of international financial markets.