AIM INSIGHTS. Review of AIM for the six months to June 2014

Transcription

1 AIM INSIGHTS Review of AIM for the six months to June 2014

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3 Review of AIM for the six months to June REVIEW OF AIM FOR THE SIX MONTHS TO JUNE 2014 The first half of 2014 has seen the economic recovery that started in 2013 become entrenched, as strong broad-based growth continues to be recorded. After the long period of closure in the capital markets since the financial crash in 2008 many more companies are looking at IPOs and other capital markets transactions as a genuine way of unlocking value and raising substantial equity funds. In this edition of our six monthly survey of AIM, the BDO capital markets team considers the performance of AIM and AIM listed companies for the six months ended 30 June How has AIM performed relative to the FTSE All Share? 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? KEY FINDINGS H saw a net increase of 17 in the number of AIM listed companies, up from a net increase of 2 in H After six years of decline, this was the second consecutive half-year period that the number of AIM companies has increased The increase in AIM companies came despite a 14% decline in the AIM 100 index There were 41 IPOs 1 in the first half of 2014, which is in line with the 40 seen in the second half of 2013 but higher than the 22 achieved in H Total proceeds from new admissions in the first half of 2014 amounted to 1.74 billion, more than double the 0.85 billion raised in the second half of 2013 Total proceeds from further issues in H amounted to 1.97 billion, an increase of 20% compared to H ( 1.64 billion) and 82% compared to H ( 1.08 billion) In H1 2014, consumer services and industrials were the most active sectors for fundraising with 24% and 21% of total funds raised. In H2 2013, the most active sectors were technology (23%) and other financial (15%) The most active reporting accountant in the first half of 2014 was BDO with nine IPOs. The most active nomad was Cenkos Securities with five IPOs although Zeus Capital raised the most IPO money ( 0.5 billion) The increase in size and change in sector from technology to consumer services and industrials suggests that investors are looking to invest in established businesses with proven revenues and profits. 1 IPOs in this document are defined as excluding introductions and reverse takeovers.

4 2 Review of AIM for the six months to June 2014 MARKET PERFORMANCE AIM IN REVERSE The AIM 100 declined by 14% whereas the FTSE All Share was broadly flat over the six month period. In H2 2013, the AIM 100 grew three times faster than the FTSE All Share The marked change in fortunes for the AIM 100 index over the last 12 months relative to the FTSE All Share index highlights the relative volatility of the AIM market compared to the wider capital markets. This is particularly evident for some of the larger AIM 100 companies The divergence is particularly evident in the second quarter, with the AIM 100 declining by 12% and the FTSE All Share remaining broadly flat over the same period In the last five years, the AIM 100 has generally outperformed the FTSE All Share, although recent underperformance is evident over the last three months The half year peak for the AIM 100 was in March (4,092); the peak for the FTSE All Share was in June (3,676). STOCK MARKET INDICES H (REBASED) Jan 2014 Feb 2014 Mar 2014 Apr 2014 May 2014 Jun 2014 FTSE AIM 100 FTSE All Share STOCK MARKET INDICES 5 YEAR (REBASED) Jul 2009 Jul 2010 Jul 2011 Jul 2012 Jul 2013 FTSE AIM 100 FTSE All Share

5 Review of AIM for the six months to June NUMBERS ON THE UP H saw a net increase of 17 (1.6%) in the number of AIM listed companies compared to December This compares to a net increase of 2 in H H was the second consecutive half year period that the number of AIM companies increased, after six years of decline There were 64 new admissions to AIM in the first half of 2014, broadly in line with the number in the second half of 2013 (65) The number of IPOs in the first half of 2014 (41) was in line with the second half of 2013 (40) but almost double the number in the first half of 2013 (22). H saw 23 other admissions (such as introductions and re-admissions), which compares to 25 and 12 non-ipos in H and H respectively Average market cap per company at 30 June 2014 was 71 million, which is in line with the average at 31 December 2013 of 70 million but substantially higher than the average of 57 million at 30 June 2013 The average market cap for new admissions in H was 90 million, an 84% increase on H ( 49 million) and a 200% increase on H ( 30 million) There was a reduction in the level of churn, with the number of delistings declining from 63 in H to 47 in H1 2014, which is broadly in line with the churn in the same period in 2013 (45) The total market cap of all AIM companies at 30 June 2014 was 77.2 billion, a 2% increase compared to the 31 December 2013 total of 76 billion and a 25% increase compared to 30 June 2013 of 61.8 billion The distribution of companies by market value between June 2013 and June 2014 shows a marked reduction in small companies (ie less than 5 million) and a general increase in larger companies, particularly those over 100 million. This not only reflects the general increase in market capitalisation of AIM companies but also the impact of a number of large IPOs in recent months. AIM COMPANIES - NUMBERS AND MARKET CAPS ,021 1,399 1,634 1,694 1,550 1,293 1,195 1,143 1,096 1,087 1, Jun 2014 No. of companies (l-h scale) Market value (r-h scale) AIM JOINERS AND LEAVERS (20) (40) (45) (47) (56) (62) (60) (63) (80) H112 H212 H113 H213 H114 Admissions Delistings AIM COMPANIES BY MARKET CAP NUMBER OF COMPANIES ( m) MARKET CAP June 2013 June bn

6 4 Review of AIM for the six months to June 2014 FUNDING MARKETS BOOMING Total proceeds from new admissions in the first half of 2014 amounted to 1.74 billion, more than double the 0.85 billion raised in the second half of 2013, which itself was a 151% increase on the 0.34 billion in the first half of 2013 The vast majority of the first half proceeds ( 1.67 billion) related to IPOs Average IPO proceeds per company in the first half of 2014 was 40.8 million. This is substantially higher than the average in both the second half of 2013 of ( 18.2 million) and the first half of 2013 of ( 11.3 million), largely reflecting the impact of the three unusually large IPOs noted above Excluding the three largest IPOs from each period, average IPO proceeds per company were 24.9 million in H1 2014, 11.2 million in H and 6.2 million in H This indicates that the general appetite for larger IPOs in the first half of the year was broadly spread and not restricted to a few particularly large IPOs Total proceeds from further issues in H amounted to 1.97 billion, an increase of 20% compared to H ( 1.64 billion) and 82% compared to H ( 1.08 billion) 224 companies raised money through secondary issues in H at an average of 8.8 million per company. This compares to 234 companies in H at an average of 7.0 million per company and 184 companies in H at an average of 5.8 million per company. TEN LARGEST IPO FUNDRAISINGS - H Sector m Boohoo.com Retail 300 Dalata Hotel Group Travel and leisure 222 Dx Plc Transport 201 RM2 International SA Industrial 137 Mysale Group Retail 115 Manx Telecom Telecoms 89 Safecharge International Group Support services 76 XL Media Media 42 Horizon Discovery Group Pharmaceuticals and biotech 40 Flowtech Fluidpower Industrial engineering 40 TEN LARGEST FURTHER ISSUES - H Sector m Imperial Innovations Group Financial 150 Monitise Telecoms 109 Regenersis Support services 100 Wolf Minerals Mining 99 Newriver Retail Real estate investment 85 Firestone Diamonds Mining 70 Faroe Petroleum Oil and gas 65 Globalworth Real Estate Investments Equity investment instruments 65 Petroceltic International Oil and gas 60 Sareum Holdings Pharmaceuticals and biotech 55

7 Review of AIM for the six months to June FUNDING MARKETS BOOMING In H1 2014, consumer services and industrials were the most active sectors for fundraising with 24% and 21% of total funds raised In H2 2013, the most active sectors were technology, with 23% of funds raised compared to 11% in H and other financial, with 15% compared to 7% in H In the corresponding period in 2013, the most active sectors were industrials (24%) and oil & gas (17%) The consumer services sector included the IPOs of boohoo.com and Dalata Hotel Group, which raised 300 million and 222 million respectively and were the largest two IPOs in H The industrials sector included the IPOs of DX plc and RM2 International, which were the third and fourth largest IPOs, raising 201 million and 137 million respectively The increase in size and change in sector from technology to consumer service and industrials suggests that investors are looking to invest in established businesses with proven revenues and profits Funds raised in the year to June 2014 were higher in every month compared to the prior year, with the exception of August and September 2013 Total funds raised in H ( 3.71 billion) were 48% higher than in the previous six months ( 2.5 billion) The bulk of the funds raised in 2013/14 were in the traditional Q4 and Q1 fundraising quarters Funds raised in the peaks of November/ December 2013 and February to April 2014 accounted for 59% of total funds raised in the year to June TOTAL NEW AND FURTHER FUNDS RAISED BY SECTOR H % 2%2% Consumer services 24% 7% 24% Industrials 21% Tech/Telecoms 11% 8% Oil and gas 11% Basic materials 10% 10% Healthcare 8% Other financial 7% 21% Real estate investment 4% 11% Equity investments 2% 11% Other 2% NEW AND FURTHER ISSUES Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2012/ /14

8 6 Review of AIM for the six months to June 2014 MOST ACTIVE ADVISERS REPORTING ACCOUNTANTS With nine IPOs, BDO continues to be the leading reporting accountants for IPOs on AIM with clients across a range of sectors, including retail (2), telecoms/tech (2), oil and gas, support services, leisure, REITs and chemicals BDO was also the leading reporting accountant for the same period in 2013 with five IPOs. IPOS 1 REPORTING ACCOUNTANTS ON AIM H H BDO 5 9 KPMG 3 7 PwC - 6 Deloitte 1 5 Grant Thornton 4 4 Baker Tilly 3 3 Crowe Clarke Whitehill 1 3 Ernst & Young 1 3 Mazars - 1 Other 6 5 Total IPOs include introductions (H1 2013: 2; H1 2014: 5) NOMADS The most active Nomad for AIM IPOs in the first half of 2014 was Cenkos Securities with five IPOs The most successful Nomad on AIM in terms of IPO proceeds was Zeus Capital who raised 557 million. Zeus Capital s IPOs included boohoo.com which was the largest IPO on AIM in terms of money raised ( 300 million) and DX plc ( 201 million). IPOS 2 - MOST ACTIVE NOMADS (H1 2014) IPOs (No.) Money raised ( m) Cenkos Securities Zeus Capital Nplus 1 Singer 4 62 Finncap 3 17 Westhouse Securities 2 17 Panmure Gordon 2 46 Oriel Securities 2 25 Northland Capital s 2 10 Cairn Financial Advisers 2 10 ZAI Corporate Finance 2 3 Others Total 46 1, IPOs include introductions (5)

9 Review of AIM for the six months to June

10 8 Review of AIM for the six months to June 2014 ABOUT BDO BDO presence 1. Independent research (Mid Market Monitor 2012 and 2013) undertaken by Meridian West shows BDO has the highest client satisfaction rating among its peers 2. Client Listening Programme 2012/13 3. US$6.45bn ( 4.92 bn) combined fee income 2013

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12 CONTACTS ANDY HARRIS READING t: +44 (0) e: CHRIS HEATLIE MANCHESTER t: +44 (0) e: CHRIS SEARLE LONDON t: +44 (0) e: GRAHAM ELSWORTH BIRMINGHAM t: +44 (0) e: IAN COOPER LONDON t: +44 (0) e: JEFF HARRIS GATWICK t: +44 (0) e: JOHN BARKER LONDON AND EAST ANGLIA t: +44 (0) e: MATT COPLEY LEEDS t: +44 (0) e: This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO LLP to discuss these matters in the context of your particular circumstances. BDO LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it. BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. A list of members names is open to inspection at our registered office, 55 Baker Street, London W1U 7EU. BDO LLP is authorised and regulated by the Financial Conduct Authority to conduct investment business. BDO is the brand name of the BDO network and for each of the BDO Member Firms. BDO Northern Ireland, a partnership formed in and under the laws of Northern Ireland, is licensed to operate within the international BDO network of independent member firms BDO LLP. All rights reserved. HB06555