AIM in a Nutshell

The Alternative Investment Market, or AIM, is arguably the leading market in the world for smaller, growing companies. It offers a company:- 

  • The ability to raise capital to fund future growth
  • A market for its shares, both broadening its shareholder base and enabling existing shareholders the opportunity to exit or dilute shareholdings
  • The ability to raise its profile
  • Marketable currency in the form of shares to fund acquisitions
  • A stepping stone to a full listing 

It also offers investors certain tax breaks. There has been a lot of press comment about ‘indigestion’ in the market. Looking at the statistics, 400 companies were admitted to AIM in the 11 months to November 2006 in contrast to 519 in the whole of 2005. Yet £13.2bn of total money was raised in 2006, in contrast to £8.9bn raised in 2005.

There has been a spate of profit warnings from recent entrants and the share prices of a number of brokers have fallen sharply. A sentiment that is heard more often is that institutions are increasingly looking to fund larger transactions on the Main Market. Hasgrove PLC recently bucked the trend when it floated on 14 November 2006, raising £6.25million.

Based in Manchester, the Hasgrove Group is a pan-European marketing and communications service business. Incorporated in October 2004, it has grown rapidly by acquisition and is typical of many companies that AIM attracts. CLB Coopers acted as Reporting Accountants.

So what is the future for AIM?

All markets are cyclical and sentiment will inevitably change.

Given that the time it takes to float can be at least 6-9 months if not longer, and if it is a route that you are considering, do not be put off by current press comment and do start thinking seriously now. There are typically ‘windows’ of opportunity in the calendar to float on AIM and it is important to ensure that your planning reflects these. The process of admission is relatively simple and, unlike other markets, AIM does not stipulate minimum criteria in relation to company size, track record or number of shares to be held by the public.

Contact David Clift at dclift@clbcoopers.co.uk for a discussion of the pros and cons together with what is involved.