Money raised in IPOs on AIM triples – highest sum in six years

  • AIM raises £2.4 billion
  • AIM net gain of 12 companies signals return to growth

The Alternative Investment Market (AIM) has delivered its biggest year for IPOs since 2007/8, according to our research.

We explain that IPOs on AIM raised £2.4 billion this year* – nearly triple the £834 million raised in the previous year. This total was raised by 82 companies floating in the past 12 months compared with 46 the year before.

Colin Wright, Partner, comments: “Delivering almost two and half billion pounds from IPOs is a clear sign that investor appetite for AIM shares is returning towards pre-recession levels.”

“Investors are more willing to put their money into AIM listed companies than at any time over the past five years. They now appear to be more confident of a return on investment from these junior market companies.”

We explain there has been a return to growth for AIM, with a net gain of 12 companies over the past year. In 2012/13 the market shrank by 38 companies, and the total net loss of companies since 2006/7 is 759. This is the first time there has been growth in the overall size of market since before the credit crunch, and is a clear sign of improving market conditions.

We add that 21 companies listed in the second quarter of 2014 compared to 15 companies a year earlier and 13 in 2012.

Colin comments: “The return to growth of the market is very positive for AIM. It seems that businesses are now confident that listing on AIM will provide them with the investment needed to fund quick growth.”

According to our research departures from AIM remain low. The number of companies delisting from the market has decreased, from 275 in 2008/09 to 70 in 2013/14, a fall of 75%.

Of the 70 companies that left the market, 40% did so because they were taken over. By contrast only 20% of the companies that delisted in 2008/09 left because of M&A activity. We add that this is a positive sign for AIM as M&A deals show that bidders consider these companies to be attractively priced, with assets worth acquiring.

The biggest IPO in second quarter of 2014 was that of Safecharge International, a global payment provider, which raised £75.75 million in the first week of April.

We explain that some of the more notable IPOs in the last three months include high street names at both ends of the market: Patisserie Holdings, which operates Patisserie Valerie, the high end bakery chain and café, and Shoe Zone, the discount shoe retailer.

Colin says: “The list of successful IPOs so far in 2014 is likely to encourage more companies to raise funds for growth through AIM. There are already seven AIM IPOs scheduled for the first two weeks of July, and plenty more companies are driving their own plans forward.”

“Whilst the IPO market might be suffering from temporary indigestion we anticipate that investors’ appetites will fully recover after the summer break,” concludes Colin.

Money raised in AIM IPOs over the past six years


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AIM returns to full year growth – net change in the number of companies on AIM

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*Year ending 30/06/14