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Over half of the companies listed on AIM are valued under £20 million, making them perfect targets for acquisitive companies. Of the 1,692 companies listed on AIM, a third are valued under £10 million, 20 per cent under £5 million, and eight per cent under £2 million, according to research by Growth Company Investor*.

The market value of AIM grew only 1.7 per cent, from £95.8 billion to £97.4 billion, compared with the near-70 per cent growth reported in the previous four years. Among the select group choosing to come to market, only 16 new companies attracted £100 million or more, roughly half the 31 ventures that managed to pull in such sums a year earlier. Moreover, not one IPO managed to prise in excess of £300 million in 2007 (as two companies did in 2006) and there was a decline in floats attracting £200 million or above, with the number dropping from nine in our last report to only four this time around.

The research also found that only one out of the largest 20 IPOs of 2007 was a UK company – veterinary service provider CVS Group. The other 19 were all either overseas focused or incorporated in tax-friendly jurisdictions ranging from the Isle of Man, to Jersey and Bermuda.

All this may be bad news for CEOs on AIM or those contemplating a float, but for investors it could be an opportune time to buy cheaply priced stocks destined to reach the heights. Chris Hutchinson, manager of the Unicorn AIM Venture Capital Trust Fund, says: ‘Any high-net-worth investor should aim to allocate a small portion of their hard-earned wealth to a broadly based portfolio of shares in AIM-listed companies.’

*Growth Company Investor is a sister title of GrowthBusiness

BUY THE FULL REPORT:

This research is part of a more comprehensive report entitled Spotlight on AIM 2008. The report is available in PDF format priced £295 +VAT. To order a copy, call Danica Pasinis on 020 7250 7039 or email danica.pasinis@vitessemedia.co.uk

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