According to research from City law firm Trowers & Hamlins and accountancy group UHY Hacker Young, the number of companies leaving AIM in 2010 fell by 44 per cent to 157, from 280 in 2009.
The final quarter of 2010 also saw the number of companies joining the market (23) surpass the number of companies leaving due to financial or other problems (13) for the first time since the start of the financial crisis.
“AIM has taken a real beating over the last two years, but has weathered the storm nicely and could well emerge stronger than it was before the financial crisis,” says Charles Wilson, partner at Trowers & Hamlins.
During 2010, the number of new listings more than trebled, up from 18 in 2009 to 65 in 2010.
In 2009, 212 companies cited financial problems, the failure of their business strategy, the cost of maintaining a listing or other difficulties as the reason for their departure. In 2010, the number of companies leaving AIM because they could not maintain their listing, or did not see the value of doing so, fell to 72. The majority of companies departing during Q4 left as a result of M&A activity or promotion to the Main Market.
“The upturn in M&A activity suggests that some companies were looking for economies of scale and hoping to expand by taking advantage of relatively depressed valuations on AIM,” says Wilson. “However the market’s rally in the last quarter may mean that the window for that type of deal has closed.”