Average market cap of AIM companies reaches record high, reveals BDO analysis

Analysis from BDO has revealed that the average market capitalisation of an AIM-listed company has reached a record high.

Total fundraising in the second half of 2016 increased by 47%, according to BDO’s AIM Insights report. The total market capitalisation of AIM companies rose to the highest figure since 2007 at £80.8bn, while average market capitalisation increased 18% to £82.3m.

BDO said that despite “positive investor sentiment”, there had been “a significant reduction” in new admissions and IPOs in the last six month, which indicated that “uncertainty arising from economic and political developments has impacted AIM activity”.

For the first time since 2004, the number of AIM companies has fallen below 1,000 to 982, following a fourth successive half-year period in which the number of AIM-listed companies has dropped.

Chris Searle, transaction services partner at BDO said: “Following the initial shock of the Brexit result, investors in the AIM market have generally taken the decision in their stride. They are continuing to back fast-growth, ambitious companies, although there does appear to be a preference for investing in those that are already listed rather than the perceived higher risks associated with IPOs.

“Brexit and the associated uncertainties seem to have delayed some companies’ plans to IPO in the second half of the year. But we are hopeful this is more of a stutter than a standstill. Businesses are still hungry for funds, and capital markets should be seen as an attractive route to secure investment.”