Review of AIM for the six months to December 2019
2019 was a very challenging year for AIM, the quietest year for IPOs since it was created almost 25 years ago
Whilst total funds raised in 2019 of £3.8bn were considerably lower than the five year average of £5.2bn, investors have continued to support growth companies, albeit more selectively.
There was an improvement in December 2019, with new issue proceeds amounting to £108m compared to an average of £35m per month for the rest of the year. Can this momentum be maintained into 2020 on the back of greater political certainty following the clear general election result?
Key findings: 2019 and H2 2019 at a glance
The total number of companies listed on AIM reduced by 37 in H2 2019, leaving 863 companies at the end of December 2019. Despite this reduction, total market cap increased from £100.2bn to £104.2bn. 2019 saw AIM reverse almost all of the reduction in market cap seen in 2018.
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Stock market indices: H2 2019 (rebased)
The FTSE Allshare outperformed the FTSE AIM 100 for the majority of H2 2019, but both ended broadly at the same level. Market growth in both indices improved in December 2019 following the general election. Despite market uncertainty, the FTSE AIM 100 ended 3.9% up at December 2019 compared to June 2019 and 12.1% up for the year as a whole.
AIM market capitalisation distribution
Average market cap per company increased by 22.1% from £98.9m in 2018 to £120.8m in 2019 driven by improved valuations across the market and the departure of smaller companies with a market cap of less than £50m.
New and further issues
Despite market uncertainty, proceeds from new issues of £0.4bn were higher than the £0.1bn in H1 2019. This was largely driven by the IPOs of Uniphar Plc (raising £121m) in July 2019, Brickability Group (£57m) in August 2019, and The Pebble Group Plc (£79m) in December 2019, highlighting that there is still investor demand for companies with compelling investment stories.
Proceeds from further issues of £1.38bn in H2 2019 were below the five year average (£1.99bn) and registered a decrease from the £1.97bn raised in H1 2019. The decrease in further issue proceeds compared to H1 2019 reflects lower average transaction size.
Funding by sector
The most active sectors for fundraising in H2 2019 were natural resources, technology & media, healthcare & pharma and real estate (collectively, 68% of total funds raised).
About AIM Insights
A six monthly survey tracking the volume and value of IPOs and the performance of the AIM market and AIM listed companies. Produced by our Capital Markets team it examines market data and compares it with historical data to identify key trends.
- 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?