Expert commentary by Marcus Stuttard, Head of UK Primary Markets, London Stock Exchange Group
In June 2020, AIM celebrated its 25th anniversary. For a quarter of a century, AIM has established itself as a leading platform for smaller and growing companies to gain earlier and efficient access to the public markets, supported by a community of experienced investors and advisers.
Throughout its history, AIM has adapted and evolved to meet the needs of growth companies. It has adapted to business and economic cycles – from the technology boom at the start of the millennium to the global financial crisis – and it will continue to do so. It has proved itself to be an enduring market for all cycles and sectors.
Today, this need for a market for young, dynamic, innovative companies is greater than ever.
We are proud to see 60 AIM-quoted companies featured in this year’s 1000 Companies to Inspire Britain report. Between them, they have raised a combined £634m on admission and have collectively come back to market to raise capital a further 179 times, raising on average £18m per transaction. These companies have also shown the true global reach of AIM, with 44% of their revenues arising from exports.
The COVID-19 pandemic has demonstrated the capacity of AIM to enable its quoted companies to access capital quickly and efficiently. Some companies have used the proceeds raised since the onset of the pandemic to shore up their balance sheets. Many have used the funds to help them return to or maintain their growth trajectory, to support further acquisitions or adapt their business models to new ways of working. Public equity markets are extremely efficient at providing long-term funding at the very moment that companies need it. The diverse range of investors accessible to companies through AIM, from individuals to global institutions, provides companies with access to capital and liquidity at IPO and throughout their life on AIM. The investor base has been able and willing to stand behind companies to support them during an exceptionally testing period.
AIM has a critical part to play to support growth, innovation and employment across the UK economy. In many regional and sub-regional economies, these companies are flagships and demonstrate the benefits of using equity capital. They provide a model and example for growth. They create local employment opportunities and economic value. They attract investment that will not only help facilitate the economic recovery but will also help stimulate new growth in new industries and sectors.
Congratulations to each of the companies featured in this year’s report, and on their wider contribution to the UK economy. During this unprecedented time, access to capital continues to be key to ensuring SMEs can thrive and enabling their growth aspirations to be met.