AIM listed firms look towards fundraising and acquisitions

Trading conditions have improved, finds report

Carys Matthews 17 February 2011 17:11

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Business confidence among UK based AIM companies is continuing to increase, with many looking towards further fundraising and acquisitions this year, a new report had found.

In a survey of 120 AIM listed firms, 83% of respondents said they were positive about the outlook for their business in the year ahead, which is a large improvement from two years ago when just 61% were confident.

Just under two-thirds of the AIM companies said trading has improved over the last year and 67% expected trading to improve in 2011, with many of those looking to enter into fundraising and acquisitions to fuel growth. 42% of firms anticipate fundraising this year and 22% expect to make an acquisition within the next six months.

Philip Quigley, chairman of Smith & Williamson, the accountancy and financial group which conducted the research, said “On the whole, AIM’s members are saying that it continues to fulfil its primary purpose and function as an effective growth market.

“Attitudes to further fundraising have remained remarkably stable over the last three years according to our data, demonstrating AIM’s resilience as a market for growth companies during challenging economic conditions.”

According to the survey, decision makers continue to see the benefits of an AIM listing and have faith in the market, as 58% of respondents say that, despite the recession, AIM has been good for their company.

Half of the respondents were confident about the outlook for the AIM market itself, with only 13% feeling negative. However, two-thirds said they expect the number of AIM companies to continue to fall.

Azhic Basirov, Smith & Williamson’s head of capital markets warned: ‘“The level of optimism is certainly higher than two years ago, but there are still some major challenges ahead - the ongoing reshaping of banking balance sheets, concerns over national governments’ budget deficits, inflation and interest rate expectations will be the key factors influencing the analysts and the future direction of the equity markets.”