The London Stock Exchange’s junior market is set for a buoyant month after a slow year for floats across the board.
While initial public offerings (IPOs) on the main market appear to have almost ground to a halt, at least five new listings are due on the Alternative Investment Market (Aim) in the coming weeks as companies look to push through with their plans before Christmas.
City A.M. understands Bradford-based cyber security group ECSC, which works with blue-chip UK companies, is set to file an intention to float on Aim on Monday.
The company is seeking to raise £5m, giving it a market capitalisation of £15m, and float on Wednesday 14 December.
Chief executive and founder Ian Mann said: “There’s a lot of need out there for people needing help with cyber security. And this flotation gives us a boost in investment, which allows us to accelerate our growth.”
Also due to join Aim this month is Oxford BioDynamics, a biotech company spun out of the city’s university. The company is planning to float next Tuesday after raising £20m, with a value of around £136m.
Diversified Gas & Oil is also due to IPO next week, having set out plans last month to raise $60m (£48m) through a float on Tuesday 6 December.
Surgical endoscopy specialist Creo Medical Group is due to list on the junior market the next day and Mongolian property developer Asia Pacific Investment Partners announced plans to float on Aim in December earlier this week.
How Aim, 21, has changed
The number of companies listed on Aim, which turned 21 this year, fell to below 1,000 for the first time since 2004 in October, according to Allenby Capital research. While 34 companies have floated so far this year – up from 31 across the whole of 2015 – 103 have delisted.
The London Stock Exchange Group points out, though, that Aim companies in 2016 are now bigger and raise more when floating.
The average market capitalisation of companies joining Aim in the last three years has been £88m, up from £17m in 2005, and average money raised has increased from £5m to £30.3m.
Aim companies that have listed this year are also, on average, trading up 31 per cent compared with when they floated.
“We expect a healthy December in terms of new companies joining the market and see a very encouraging pipeline for 2017,” Marcus Stuttard, head of Aim and UK primary markets at the London Stock Exchange Group.
While macro-events softened IPO markets worldwide, companies that floated on Aim this year have performed really well, up more than 30 per cent on average.
That’s a continuation of a three year trend that has seen an increasing number of larger, more mature companies using the market, raising really significant capital and providing robust returns for investors.
In now its 21st year AIM has certainly come of age.