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RESURGENCE OF TECH IPOs ON AIM AS A RESULT OF BOOMING VALUES

Average enterprise value of AIM listed tech stocks hits £111m
Figure represents a 24.9% increase in H2 2017 and 50% increase in the last year
H2 2017 saw seven tech IPOs – up from just one in the previous six months

The latest Tech Barometer from Moore Stephens, the top ten accounting and advisory firm, has revealed that the average enterprise value of technology companies on the Alternative Investment Market (AIM) has reached £111m – a 24.9% increase from 30 June 2017 and a 50% increase for the full year.

The continued growth in value of these stocks has resulted in a resurgence of tech IPOs with seven in the second half of 2017, raising £114m in total. This is a stark increase to just the one to take place in the previous half-year.

Dougie Hunter, Director at Moore Stephens said of these findings: “Six months ago we predicted an increase in IPO activity and this has certainly been the case. In total, more than £1.2bn was raised by technology companies on AIM throughout 2017 – it really is a booming market.”

In fact, this total figure – £1.2bn – is four times as much that was raised in 2016. Moore Stephens’ research unearthed the fact that more than £810m was raised from secondary fundraisings in the six-month period to 31 December 2017 – this was more than in the previous two years combined and includes the five largest individual company fundraises since 2015.

Dougie Hunter continued: “There is no doubt that the ability of companies to raise significant levels of secondary funds has been one of the factors for the increase in the number of technology IPOs. Another, is the prices that have been paid with values of technology companies on AIM increasing by nearly 25% in the last six months and 50% compared with the start of the year.”

By way of a sector-analysis, the dramatic growth shown in the past six months has been driven by:

Hardware companies – increasing by 16%;
Support services – increasing by 56%;
Software by 20%.

By comparison, the FTSE AIM All-share index increasing by 24% in the last year and the FTSE All-Share index by 9%.

Dougie Hunter concluded: “The AIM market clearly remains an attractive option for tech businesses. With Brexit on the horizon, it is clear that companies still have faith in the UK’s alternative market as their chosen place for exit. Over the next six months, we think the trend for IPOs will continue as demonstrated by the recent £30m fundraise by OnTheMarket in the last week.”

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