AIM pipeline in Midlands gets stronger – PwC
THE AIM pipeline in the Midlands is stronger than at any point over the last two years as companies set their sights on growth, market analysts at PricewaterhouseCoopers have said.
After getting off to a relatively strong start to the year, with eight new listings raising £217m, IPO activity on AIM fell short of expectations in the second quarter – normally the most buoyant quarter of the year -, with 10 IPOs with a total value of £133m.
PwC said despite IPO activity on AIM being slower than expected at the start of the year, there were clear signs of ‘cautious optimism’ in the marketplace as companies were increasingly showing interest in achieving the right mix of debt and equity in order to fund their future growth plans.
Paul Norbury, PwC partner and Midlands AIM leader, said: “We have seen an upturn in interest from manufacturing and technology companies seeking to put their growth plans on a firm financial footing by balancing their use of debt and equity. When considering an IPO on AIM, businesses are often attracted by the additional flexibility equity funding provides, as it allows them some additional control over their working capital.
“Some of these companies are ready to float but others are less so. In some cases, they need to put in the place robust internal management systems to ensure they will succeed in securing a recommendation to join the market when the time comes.”
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According to PwC, some companies may also be waiting for others to go first and the recent increase in IPO activity on the main market is likely to filter through to AIM in the near future.
“With some high profile IPOs on the main market now imminent and others having completed, it is only a matter of time before this boost to investor confidence begins to rub off on AIM,” added Mr Norbury.
“With a strong pipeline already in place, all that is needed is a few companies to make the move successfully, at the right price, and the backlog of impending AIM flotations will start to unwind. However, at this stage in the year, activity is unlikely to pick up before Q4.”
PwC jointly organises the AIM Awards 2010 with Ford Sinclair, in association with the London Stock Exchange. Judges are currently considering entries and the winners will be announced on October 14.
