XCAP predicts brighter prospects for AIM
XCAP Securities is predicting an improvement in conditions for firms looking to raise money on the Alternative Investment Market (AIM) in 2011.
The firm, which employs around 20 of its 50 staff at an office in Wilmslow, will tell shareholders at its annual general meeting later today that it expects more companies to join the market this year.
“2010 saw an increase in activity with 43 IPO’s compared to 13 in 2009 and over £6billion was raised across both initial and secondary transactions,” said chairman Mark Holleran.
“Current commodity prices also resulted in a strong flow of natural resource-focused companies and indications are that this should continue.”
XCAP floated on AIM itself in September, raising £5m in a deal which gave the business a market cap of £17.5m. The company provides corporate finance and corporate broking to quoted firms and Holleran said the business is trading ahead of its forecasts.
“Our pipeline of work in both corporate finance and corporate broking is very strong and the firm now has 13 retained broking clients.
“We have enhanced our research capability to further bolster our corporate broking offering. Accordingly, a recent internal assessment has shown an average increase in liquidity of 388 per cent in our broking clients’ stock since XCAP’s appointment.
“This is a phenomenal achievement in a comparatively short time and clearly demonstrates the effectiveness of our broking and market making-led approach for corporate clients.”
The firm said that its retail stockbroking arm remains cash-generative and that its market-making business is performing well and is ahead of budgets. It now acts as a market maker for around 240 stocks “on a regular but prudent basis”, according to Holleran.
“Equity investors, both retail and institutional, are still looking to invest in new companies that are run by strong management teams and offer good growth prospects on appropriate valuations, regardless of sector,” he said.
“Given the lack of bank debt available, admission to a public market still provides companies with a source of finance to develop their business.
“The continued growth and expansion in small and mid cap companies should also help lead an economic recovery.”
