Research reveals AIM’s highs and lows

AIM admissions dropped to their lowest level in more than a decade, according to research by Deloitte.

The junior stock market recorded just 36 new entrants in 2009 compared to 114 in 2008 – the lowest since 75 in 1998.

Robert Seldon, transaction services partner based at Deloitte’s Leeds office, said that although 2008 was the economic crunch point the repercussions were felt a year later.

He said that since the number of companies on AIM peaked in 2007 there had been a steady stream of companies de-listing from the market.

“The reasons for this are twofold,” he added.

“Either the underlying business has suffered through problems in the wider economy or the management team has decided that their listing is not giving them value for money and therefore de-list as a cost-cutting exercise.

“In our region, we have also seen de-listings arise from takeover or restructuring activity, most recently The Medical House.”

Research shows that in 2009, 293 companies de-listed compared with 258 in 2008.

As of December 31, there were 1,293 AIM listed companies – a 17% drop on the year before and a 24% drop in 2007 figures.

Despite having its worse year so far, AIM has seen its overall value rise significantly.

The AIM all-share index rose 66% from 394 to 654, a rise of 66% while the FTSE main market all-share measure rose by just 25% over the same period.

This is reflected in the spread of market capitalisations across the AIM market and the number of larger companies by this measure.

At December 2008 there were only 77 companies with a market capitalisation greater than £100m. This almost doubled to 147 at the end of December 2009.

Mr Seldon said: “The AIM market has continued to provide access to further funds for already listed companies with fundraising in 2009 reaching £4.8bn, almost 150% of the total in 2008, which totalled £3.2bn.

“For those companies which see AIM as a stepping stone to bigger things, 2009 saw a continuation of companies completing a ‘move-up’ to the main market. Nine have completed this in the year although, notably, none have been in our region.”

However, Mr Seldon warned that accessing AIM as a new company has never been more difficult.

“This may well continue for those companies with higher risk profiles such as previously unproven technology or business model,” he said.

“We are however seeing renewed local interest from companies with a recent history of growth.”