Our Capital Markets team have produced a six monthly survey analysing the performance of AIM and AIM listed companies.
- How has AIM performed relative to the wider capital markets?
- What have been the trends in the number and size of AIM listed companies and how successful have they been in raising equity funds?
- Which sectors have been most in demand and which advisers have been most active?
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Review of AIM for the six months to June 2019
Market uncertainty experienced in 2018 continued into the start of 2019, with funds raised from IPOs significantly down on H2 2018 (70%).
However, despite this uncertainty, AIM indices grew and investors have continued to back companies, albeit more selectively.
Whilst IPO activity was low, overall fundraising activity was broadly in line with H2 2018 as investors deployed funds into secondaries, favouring corporates with an established track record.
- The total number of companies listed on AIM reduced by 23 in H1 2019, leaving 900 companies at the end of June 2019. Despite this reduction, average market capitalisation per company increased from £98.9m to £111.4m driven by a combination of growth in market caps and the quality of the remaining AIM population.
- Further issues proceeds of £1.97bn were broadly in line with the five year average (£1.99bn) and registered an increase from the £1.52bn raised in H2 2018. The increase in further issue proceeds compared to H2 2018 reflects higher average transaction size but lower transaction volume. 196 companies raised money through further issues in H1 2019 compared to 205 in H2 2018. This reinforces the view that investors appear to be deploying funds more selectively.
- IPO activity reduced in H1 2019 compared to H2 2018, with only 5 (14) IPOs. This is the lowest six monthly number of IPOs in the last five years, reflecting a more cautious approach by investors to IPOs. Consequently, IPOs raised £121.8m in H1 2019, a substantial reduction from the £409.0m in H2 2018.
- The FTSE AIM 100 outperformed the FTSE All Share for the majority of H1 2019, but both ended the first half at broadly the same level. Despite market uncertainty, the FTSE AIM 100 ended 8.4% up at June 2019 compared to December 2018.
- Total funds raised amounted to £2.11bn which is broadly in line with H2 2018, although the lowest level since H1 2017. Despite the market uncertainty, investors have nevertheless deployed funds through secondary issues in H1 2019, albeit selectively.
- Oil & gas, financial, real estate and technology were the most active fundraising sectors (collectively, 73% of total funds raised) in H1 2019. Real estate (which recorded only £3m in H2 2018) has shown an improvement with £376m raised in H1 2019, although this was largely driven by Globalworth Real Estate Investments Limited which raised £299m in April 2019.