More firms to take AIM, says Deloitte

BIG four accountancy firm Deloitte is predicting that the number of firm on the Alternative Investment Market is set to grow during the first six months of 2012 for the first time in five years.

Scores of firms from the North West have come off the AIM market since the onset of the financial crisis either by willingly seeking a de-listing in a bid to save costs or by default as a result of financial troubles.

Company bosses have complained that the cost of maintaining a presence on AIM, which easily top £100,000 when advisors’ fees are included, has outweighed the benefits of a listing when share prices have languished for many smaller firms making fundraising through new shares difficult.

Moreover, despite many firms talking of the prospect of a listing only one North West firm has listed in 2012 – Blackpool-based Inspired Energy, which raised £3.4m via a reverse takeover last month.

Deloitte’s North West head of corporate finance, Paul Lupton, said that since the end of 2007, the number of firms on the market had dropped by a third to 1,150 by the end of November.

However, he added that the shake-out of companies from the market was now almost complete, with the number of firms de-listing dropping by 55% to 131 in the year to November 30 when compared with its peak in 2009. He said this was the lowest level of de-listings since 2005.

“By its very nature AIM is a dynamic market,” said Lupton. “The classic AIM strategy for a company is to join during an expansion phase, use AIM to build profile and access growth capital, and then depart either to a premium listing or potentially be taken over by a larger player in the same industry.  

“The consequence of this dynamism is that over the medium term the constituent members of the market can churn quite significantly. From another angle, if you compare the top 50 capitalised companies on AIM at 31 December 2007 only nine remain in the top 50 at 30 November 2011 – it is a substantially changed population.  
He said that this “natural churn” experienced meant that the market had rid itself of many of the companies which were not suited to the market.

“The AIM market’s return to growth will stimulate a more positive outlook for investors in small cap, high-growth companies.  2012 is set to be an exciting year for followers of the AIM market.”