Exclusive: LSE’s AIM sub-market sees its biggest growth in 15 years
The AIM market has grown by a net 13 companies in since last year, its largest increase in 15 years with 62 new companies listing on the junior market, according to data that was exclusively shared with City PM this morning.
Currently, there are 750 companies listed on AIM, which experienced an overall 8 per cent increase in the number of companies listed in total this year.
This growth reverses the gradual erosion of the AIM market, which has been shrinking over the last 10 years, according to accountancy firm UHY Hacker Young.
IPO boost
Over £1bn has been raised from IPOs in 2020/21, up 100 per cent on 2019/20, the firm found.
IPOs in the AIM market have been dominated by industries which have fared well during Covid-19, such as technology and life sciences. This boost may be partly driven by companies delaying their listings since the start of the pandemic due to economic uncertainty, which has since abated.
Despite initial concerns at the beginning of lockdown, the financial stress of the pandemic has not led to mass delistings, the firm said. Many companies have emerged from the pandemic relatively unscathed, and as a result have boosted overall confidence in the UK economy.
Requirements for new admissions to the AIM market have undergone major reforms since 2018. It is now mandatory for AIM companies to adopt a recognised corporate governance code. Because of these regulations, companies going to market are in a far better financial position and able to deliver better outcomes as a result.
“The growth in the size of the AIM market is a welcome boost for the UK economy following the strains caused by Covid. There is clearly an enormous appetite for investors in UK tech companies, and AIM is the ‘go-to’ market for this client base,” said Daniel Hutson, partner and head of audit at UHY Hacker Young.
Hutson told City A.M. this morning that “the pandemic has not led to a mass slump in the AIM market as previously feared. In reality, the performance of AIM has exceeded expectations. This will have been helped by better regulation, rooting out those less likely to succeed on the market.”
“AIM is an ideal market for fast growing companies such as those in the science and technology sectors which have emerged the victors in this time of Covid and economic uncertainty,” he concluded.