Rise in AIM costs slows as advisers negotiate fees

THE cost of listing on the Alternative Investment Market (AIM) has dropped as banks and other advisers compete to win contracts, a survey out today shows.

AIM listing costs have been surging as companies have been saddled with more regulations to comply with.

But the costs rose at the slowest rate in the last year and the total cost is now 7.29 per cent of all funds raised, according to the research by accountants UHY Hacker Young. Over the last five years the cost of listing on AIM as a percentage of funds raised has risen by a fifth from 6.1 per cent in 2005 as due diligence costs have mounted. UHY Hacker said that the increase in the cost of listing on AIM has been slowed by more competition. Laurence Sacker, senior partner at UHY Hacker Young, said: “With the AIM market activity increasing, investment banks and broking firms are once again competing for market share in AIM IPO work. So they are being slightly more flexible on fees.”

“That is good news as AIM needs to keep the cost of listing down in order to keep well ahead of its international competitors.”

Last year there was a jump in AIM listings, up from 18 in 2009 to 65 in 2010. Among the companies listing this year is sports retailer JJB, which is undertaking a restructuring. Broker Numis is handling the process.

Sacker added: “The trend to increase levels of due diligence work seems to have now levelled off in the last year or so.”