Aim growth forecast in 2010 as market hits four year low

THE number of firms listed on the Alternative Investment Market (Aim) fell in 2009 to its lowest level in over four years, after the combined impact of low share prices, illiquidity and fundraising difficulties prompted a slew of delistings during the crisis.

Last year saw 293 firms leave Aim, according to accountancy firm Baker Tilly. That takes the number of firms on the market to just 1,293 – the lowest level since August 2005.

Only 36 companies were admitted to the market over the year, with a total of £610m raised from just 13 initial public offerings (IPOs). However, the tide of market activity picked up substantially in the fourth quarter of 2009, when nine of the IPOs were completed, including £142m raised by private equity guru Jon Moulton’s new vehicle, Better Capital.

Chilton Taylor, head of capital markets at Baker Tilly, said the flood of delistings could prove to be a positive development in the coming months, since the large number of micro-cap companies which have now left Aim have paved the way for a market with fewer but larger firms.

“It is still difficult and more expensive to obtain bank funding, and private equity houses in particular will need to seek exits,” he said. “There is a backlog of good quality companies seeking finance, and acceptance by proprietors of more realistic valuations will all contribute to the potential for an increase in IPOs [in 2010].”