Supporting Thames Valley companies 23 years on
The world’s most successful growth market and home to no less than 70 Thames Valley-based companies, AIM, turned 23 this year. As it celebrates another milestone, it is an opportunity to shine a light on regions such as the Thames Valley and the companies contributing to the market’s success, writes Claire Dorrian, senior manager, primary markets, London Stock Exchange Group
Today, the area’s AIM companies have an aggregate market capitalisation of over £7.5 billion and an average individual value of £100 miilion, which is double 2016’s figures, demonstrating the growth of the region.
Companies come from across all sectors, from retail, to manufacturing and biotech. This not only reflects the growing number of successful entrepreneurial businesses flourishing across the region but also AIM’s ability to support more mature companies.
In August this year, Oxford-based healthcare technology company, Sensyne Health, joined AIM, raising £60m with a market capitalisation of £225m. It is just one of the 29 successful initial public offerings, including games developer Team 17 and egg-free cake producer Cake Box, we’ve seen on AIM in 2018 so far.
And despite volatile economic market conditions, over 70% of these stocks are currently trading up, with average post IPO performance running at 20%. They have an average market capitalisation of approximately £108m, a stark difference
compared to a decade ago when the average value of new companies joining AIM was £17m.
Again, these 29 companies show the market is stepping up, particularly post the financial crisis. While we’ve seen other global markets struggling, AIM has in fact been outperforming the Main Market in some key respects. A third party report on AIM dividends this year highlighted that AIM dividends tripled between 2012 and 2018, almost three times faster than main market dividend growth.
That’s not to say that investment in the financial markets doesn’t carry risk. When investing equity capital there is always an evaluation of risk versus reward, but this is a feature of any investment on any market. Through venues like AIM, London Stock Exchange is committed to giving investors the opportunity to have a stake in innovative ambitious companies that will shape the future of our global economy.
AIM is a tremendous success story for the Thames Valley region and Britain as a whole,
re-balancing the economy away from debt towards equity and boosting access to vital growth finance for thousands of ambitious businesses. Equity funding is the right sort of capital for these companies because they should be spending as much as they can to innovate, grow and create jobs, rather than having to prioritise servicing a loan.
Figures for the latest year available on AIM’s impact on the wider economy show companies which raised capital on AIM, created 731,000 jobs, paid £2.3b in tax and contributed £25b alone to UK GDP.
In June 1995, the market was launched with just 10 companies and an aggregate value of £82m. More than two decades on, AIM is now the world’s most successful and established market for growth companies, having supported close to 4000 companies raise over £110b. As it continues to connect thousands of smaller companies to capital, support the wider UK economy and develop in its own right, we must ensure AIM carries on thriving and supporting companies from the Thames Valley region and beyond.
The Thames Valley AIM Breakfast Seminar
Friday, November 22 – 8am-11am – Royal Berkshire Conference Centre, Madejski Stadium, Reading There is free parking within the Madejski complex
Speakers:
• Claire Dorrian, London Stock Exchange Group: Update on current IPO activity, size and sector of companies and how much money they are raising.
• Andy Crossley, Stockdale Securities: In an environment where PE appears to be the default for ambitious businesses, lets look at circumstances where an AIM IPO may suit better.
• Robin Stevens, Crowe: The process involved in making your company ‘investor ready’; accounting and taxation issues that arise during an IPO.
• Daniel Bastide, Irwin Mitchell: Knowing what it is you are listing: business perimeter, suitability & disclosure considering in particular due diligence and the risk register.
• Neil Clark, CEO of Destiny Pharma: Destiny Pharma plc, completed its £15.3 million placing and admission to the AIM market in September 2017, becoming only the second life sciences company to do so at the time.
Free to all delegates. To register your interest, email Pauline:
pauline@elcot.co.uk sponsors For the Thames Valley AIM list 2018, see overleaf ... The event will be reported in the January/February edition.
THE BUSINESS MAGAZINE – NOVEMBER/DECEMBER 2018
businessmag.co.uk
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