Following upbeat year-end financials and recent record fund raisings, PLUS is gearing up for an eventful summer as it looks forward to Recognised Investment Exchange status. Nevertheless, some corporate financiers have yet to be convinced.

When Peter Jackson left broker WH Ireland last month to join PLUS as director of regulation, it was yet another sign of how far the junior market has come since Simon Brickles took over as chief executive.

As a newly created post in charge of stepping up regulatory issues, Jackson’s job will be to smooth through the process of PLUS’s approval as a Recognised Investment Exchange (RIE) this summer. Hiring Jackson is also a further signal by Brickles that he intends PLUS to be a serious player in small cap stocks since launching the trading platform in 2005.

Few would doubt that the market’s chief executive has had a huge impact on PLUS (formerly Ofex) since taking over the near bankrupt company in 2004. As well as regulatory tightening, Brickles has also pruned the number of corporate advisers by raising fees claiming that quality not quantity is needed. Some 25 advisers out of about 90 have pulled out in recent months after fees increased by 20% last year and Brickles plans to intensify the weeding out process.

Last December, PLUS raised £25 million on AIM at 14p a share, almost doubling its market cap to £74.3 million enabling it to expand operations (see last month’s column). Moreover, its financial results to December 31 reported increased revenues by 49% to £2.2 million, while pre-tax losses of £1.3 million were reduced fractionally – although these losses were blamed on the launch of the trading platform.

Nevertheless, despite imminent RIE status and the recent institutional backing during AH Medical’s record £13 million fund raising, corporate finance players continue to reserve judgement about PLUS when asked about prospects for the year ahead. One corporate financier – requesting anonymity – who takes companies to AIM recently told me: “The problem with PLUS is that I can’t raise any money or any interest from anyone.” He added that it remains to be seen if gaining RIE status changes anything.

Justin Randall, partner at Jeffreys Henry accountancy, which has an affiliate that sponsors his PLUS clients, believes the Brickles business model that worked on AIM will work on PLUS, although he has concerns about the immediate future status of the market.

“It’s a matter of where they really perceive themselves to be in the market,” he said. “Do they see themselves as an alternative to AIM? If so, is the pricing of a PLUS listing going to creep up in the same way as an AIM list?

“Or do they see themselves as a self regulating, lower cost alternative, which is where I would prefer them to sit. They’re betwixt and between and I’m not sure they know where they are at the moment.

“There’s no doubt that Simon Brickles is trying to use the same model [he used on AIM], but that doesn’t necessarily mean that he has to take all the attributes.”

Randall believes PLUS has a niche position in the market, but also has its limitations. “My view is that it has its place. There are brokers out there who feel they can raise money on the PLUS market. There are some institutional investors who would put money into PLUS companies as well. But in terms of institutional fund raising, you’re restricted as to your approach.”

Randall’s sentiment was echoed by Bruce Walker, financial director of AH Medical, who claimed that some institutions and investors were difficult to attract because they “view PLUS as not one thing or another”.

Nevertheless, Walker is confident that PLUS will develop as a capital market as it moves towards RIE status and believes it is a good vehicle for small companies looking to achieve critical mass.

“PLUS has allowed us to grow AH Medical to a reasonable size,” he said. “I think they’re doing the right things to allow us to do what we’re doing.”