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AIM outperforming Main Market a year on from the start of Covid-19

Publications featured in include: City AM and Daily Mail.
  • AIM All-Share up 22% since pandemic, FTSE All-Share down 10%
  • AIM defies sceptics on the anniversary of Covid

AIM has seen a fall in companies leaving compared to a rise in delistings on the Main Market, a smaller fall in money raised by IPOs than the Main Market and a much better share price performance than the Main Market during the first year of the pandemic.

  • The number of companies leaving AIM fell 27% from 75 in 2019/20 to 55 in 2020/21, while the number of companies leaving the Main Market rose 8% from 49 to 53 over the same period (year end 31 Jan). 
  • Money raised by new companies joining the Main Market fell 19% from £3.1bn in 2019/20 to £2.5bn in 2020/21, while AIM only saw a decline of 1% from £496m to £489m.
  • The AIM All-Share Index rose 22% between 1 February 2020 and 31 January 2021, in comparison to the FTSE All-Share Index, which fell 10%.

AIM has been buoyed over the course of the pandemic by its large exposure to some of the economy’s best-performing sectors, such as technology. Strong share price performance by AIM-listed video games companies Boku (formerly Codemasters) (+107%), Frontier Developments (+96%), Keywords Studios (+65%) as well as SME management software maker Maestrano (+487%) were major contributors to AIM’s outperformance over the past year. 

Online fashion retailer ASOS (+89%), now the largest AIM company by market cap, also recorded strong share price growth. AIM only took until 6 October to make up all the ground it lost in the fall in share prices triggered by the pandemic in February.

The number of IPOs on AIM has also held up well during Covid. AIM saw 20 IPOs in 2020/21, down only marginally from 23 a year earlier*. While IPO activity fell very sharply during the early stages of the pandemic, with only three new listings between January and May, it bounced back strongly with 10 new listings in the final three months of 2020.

There is pent-up demand for AIM IPOs, with a number of floats that were shelved during 2020 now being restarted. There is expected to be strong IPO activity on the market during the second quarter of the year as the UK’s vaccination programme progresses.

Secondary fundraising was also a major success for AIM companies in 2020/21, with more than £5.1bn raised, up 50% from £3.4bn in 2019/20 (year-end Jan 31). Much of the money raised in 2020 was to fund acquisitions later in the year. The biggest fundraises on AIM during the year were by ASOS (£246m) and Boohoo (£197m), both of which were used to fund M&A deals for fashion retailers.

Dan Hutson, Partner and Head of Audit at our London office comments: “A year on from Covid, AIM has defied widespread expectations of underperformance and had a far better year than the Main Market.”

The tech sector was perhaps the biggest winner of the pandemic and AIM is home to some of the UK’s best tech companies. Those who backed AIM’s tech businesses in the past year have been handsomely rewarded.

AIM acted as a great platform for its businesses to grow over the past year. AIM’s big success stories like ASOS and Boohoo were able to quickly raise cash to acquire high street fashion brands when they saw the opportunity.

AIM is now a much more robust market than it was in the last recession – it has better companies, better regulation and a better orientation towards growing sectors like technology.”

* Not including reverse takeovers
 

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