focus on aim 19 Thriving on AIM
Since AIM’s inception in 1995, the market has raised nearly £70 billion to help growth companies develop new ideas and realise their plans for expansion. But with de-listings from AIM having exceeded new admissions since 2008, will it continue to be a natural home for innovative and ambitious companies? Sam Taylor, director at PwC, believes that the AIM model is far from being broken
“AIM is arguably more relevant to the UK economy and the entrepreneurs upon which it depends than ever before”, says Taylor. “In fact, AIM as a whole has emerged leaner and fitter than before as a result of the shake- out of companies”.
Primed for growth
Indeed, a recent survey* of AIM-listed company executives revealed that they are remarkably confident about their prospects for 2012, with the majority citing ‘aggressive growth’ as their main corporate priority over the next 12 months. “The agenda for most AIM companies in recent years has been cutting costs, streamlining operations and accumulating cash. With most of the internal reshaping out of the way, companies have a renewed drive for growth”.
PwC also found that the average
target for revenue growth among AIM-listed companies over the next 12 months is 24%, some way ahead of comparable surveys of FTSE 250 firms (average 12% target for growth) and private companies (average 18% target for growth). One in five AIM companies is looking to expand turnover by over 50% in the next year, despite the challenging economic conditions.
Almost all those surveyed recognise the importance of a strong growth story in winning over investors. Yet, most feel that maintaining effective investor relations is the toughest challenge they face. “Smaller AIM companies are always going to be vulnerable to a withdrawal of investment in difficult economic conditions” says Taylor. “It’s essential therefore that they continue to tell their growth story through effective
market communication, as well as maintaining high standards of governance and transparency.”
AIM – a good place to do business?
Most of the companies that took part in the research agree that AIM is a good place for entrepreneurs to grow their business and 90% believe that listing on AIM was the right choice for their company at the time. However, companies seeking an AIM listing should be very clear about their reasons. Taylor warns, “AIM requires a significant amount of hard work to reap the rewards. Owners that simply look to AIM membership to raise their company profile or realise the value of their holding without putting in the effort to win over investors are likely to be disappointed”.
Is AIM the world‘s most successful growth market?
AIM calls itself the “most successful growth market in the world“. Since its launch in 1995, more than 3,000 companies from across the globe have joined AIM – the Alternative Investment Market.
AIM helps smaller and growing companies raise the capital they need for expansion. Part of the London Stock Exchange, it has attracted a wide range of businesses including early-stage, venture-capital backed companies as well as more established firms.
The latest AIM statistics show that since its inception there have been 2,473 admissions of UK companies and 575 foreign companies. The total raised through AIM placements has been £78.6 billion.
Recent admissions include Berkshire-based Enteq Upstream plc, which had a market capitalisation of £69.2 million. This was actually a re-admission following a reverse takeover of the company.
Enteq Upstream, based in Ascot, is focused on acquiring and consolidating companies providing specialist products and technologies to the upstream oil and gas services market.
THE BUSINESS MAGAZINE – THAMES VALLEY – JULY/AUGUST 2012
It initially raised £15m seed capital and subsequently a further £40m from a number of blue-chip investors through AIM. The company was originally listed in July 2011, and in May this year it completed the acquisition of XXT Incorporated, based in Santa Clara, California.
In another example, a University of Southampton spinout company, Ilika plc, floated on AIM in 2010 with a market capitalisation of some £18.7m.
Ilika, which now has grown to a market capitalisation of £26.4m, has established a strong client base of multi-national companies such as Toyota, Shell, Asahi Kasai and NXP, and is one of 12 successful companies that have been spun out from Southampton since 2000.
The technology platform used by Ilika was initially developed at the University through an investment of more than £6m from the Higher Education Funding Council for England.
Since being spun-out of the University in 2004, the company has established itself as a global leader in the development and application of
innovative research and
development techniques for the discovery of new materials. It has developed many products that impact on diverse markets, including the energy and healthcare sectors, eg developing lithium ion batteries for use in electric and hybrid vehicles.
www.businessmag.co.uk
Details: Sam Taylor
sam.j.taylor@uk.pwc.com
* Compiled by PwC, the Thriving on AIM report draws on the analysis of market trends and a survey of 105 executives from 96 AIM companies. For a copy of the report, contact vicky.
heath@uk.pwc.com.
Top 50 AIM companies by market capitalisation Company
1 LOMBARD MEDICAL TECHNOLOGIES 2 GULF KEYSTONE PETROLEUM LTD 3 INDUS GAS LTD
4 ENERGY XXI(BERMUDA) 5 ASOS
6 AFRICAN MINERALS LTD 7 MULBERRY GROUP 8 PLAYTECH LTD
9 COASTAL ENERGY CO 10 SONGBIRD ESTATES
11 ROCKHOPPER EXPLORATION 12 ABCAM
13 COVE ENERGY PLC
14 GREEN DRAGON GAS LTD 15 ALLIANCE PHARMA 16 DATATEC
17 ORIGIN ENTERPRISES PLC 18 JAMES HALSTEAD 19 IENERGIZER LTD
20 KIRKLAND LAKE GOLD INC 21 CANACCORD FINANCIAL INC 22 ASIAN CITRUS HLDGS
23 PROVIDENCE RESOURCES
24 BORDERS & SOUTHERN PETROLEUM 25 AVANTI COMMUNICATIONS GROUP PLC 26 HIGHLAND GOLD MINING 27 FAROE PETROLEUM PLC 28 EROS INTERNATIONAL PLC 29 EMIS GROUP PLC 30 LONDON MINING PLC
31 VINACAPITAL VIETNAM OPPORTUNITY FD 32 PACIFIC ALLIANCE CHINA LAND LTD 33 ARCHIPELAGO RESOURCES 34 FALKLAND OIL & GAS
35 BANKERS PETROLEUM LTD 36 GEOPARK HLDGS 37 MOOD MEDIA CORP
38 YOUNG & CO'S BREWERY 39 LXB RETAIL PROPERTIES PLC
Business sub-sector
4537 Medical Supplies
0533 Exploration & Production 0533 Exploration & Production 0533 Exploration & Production 5371 Apparel Retailers 1775 General Mining
3763 Clothing & Accessories 9537 Software
0533 Exploration & Production
8633 Real Estate Holding & Development 0533 Exploration & Production 4573 Biotechnology
0533 Exploration & Production 0537 Integrated Oil & Gas 4577 Pharmaceuticals 9533 Computer Services 3573 Farming & Fishing
2353 Building Materials & Fixtures 2791 Business Support Services 1777 Gold Mining
8777 Investment Services 3573 Farming & Fishing
0533 Exploration & Production 0533 Exploration & Production 6575 Mobile Telecommunications 1777 Gold Mining
0533 Exploration & Production 5553 Broadcasting & Entertainment 9533 Computer Services 1757 Steel
8985 Equity Investment Instruments 8733 Real Estate Holding & Development 1777 Gold Mining
0533 Exploration & Production 0533 Exploration & Production 0533 Exploration & Production 5555 Media Agencies 5757 Restaurants & Bars
8633 Real Estate Holding & Development
40 NEW EUROPE PROPERTY INVESTMENTS PLC 8985 Equity Investment Instruments 41 LONDON SECURITY PLC 42 MAJESTIC WINE PLC 43 NICHOLS
2791 Business Support Services 5379 Specialty Retailers 3537 Soft Drinks
44 M.P.EVANS GROUP 45 DAISY GROUP PLC
46 NAUTICAL PETROLEUM
47 PACIFIC ALLIANCE ASIA OPPORTUNTY FD 48 MONITISE PLC
49 NAUTILUS MINERALS INC 50 RARE EARTHS GLOBAL LTD
3573 Farming & Fishing
6535 Fixed Line Telecommunications 0533 Exploration & Production
8985 Equity Investment Instruments 6575 Mobile Telecommunications 1775 General Mining 1775 General Mining
Market Capitalisation £m
3,593.56 1,717.32 1,646.23 1,517.05 1,403.65 1,237.67 1,233.22 1,007.20 965.31 814.63 779.65 772.93 729.18 670.09 643.72 630.75 552.02 529.43 524.06 430.11 407.16 402.58 349.14 348.41 346.94 336.96 329.15 326.95 323.49 321.53 317.14 314.24 306.99 304.68 301.61 295.90 294.35 282.98 279.51 276.26 262.18 257.48 256.74 255.13 252.28 238.45 236.98 234.23 232.09 228.92
May 2012
http://www.londonstockexchange.com AIM Market statistics is located within the Statistics section
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