This month’s column is of a particularly celebratory nature because London Stock Exchange is marking the twentieth anniversary of AIM, the world’s most successful and established market for growth companies.
20 years ago on June 19, AIM was launched with just 10 companies and an aggregate value of £82m. Two decades on, over 3,500 UK and international companies have joined AIM, raising nearly £90bn through new and further issues. And I’m delighted that AIM today counts 39 Yorkshire companies among its ranks.
As financial markets have evolved over the last 20 years, AIM has remained true to its central purpose. It continues to offer ambitious growth companies, from across the world and from any sector, the opportunity to raise capital on a market with regulation specifically designed for their needs.
Vital to AIM’s success has been the support and participation of the private investor community. We have worked hard to strengthen the relationship between private investors and the capital markets. Alongside a wide range of shareholder and industry associations, we have strived to secure AIM shares’ eligibility for ISAs and for the abolition of stamp duty on growth market shares. These moves are vital to encouraging ongoing investment into AIM, supporting liquidity in the market and supporting the revival of the UK economy.
The level of understanding around the significance of equity investment and its broader impact on the economy remains low. Banks play a critical role in the economy, but British business remains over reliant on bank lending.
Equity supports and nurtures ambitious high growth firms, allowing them to create jobs, drive growth and innovation and boost long term productivity. The figures are remarkable.
To demonstrate AIM’s economic contribution to the UK, Grant Thornton recently produced a report highlighting the market’s achievements.
Despite a backdrop of fluctuating equity market conditions over the past 20 years, AIM now contributes the equivalent of £25bn in GDP to the UK economy, that’s more than the UK aerospace and automotive industries and today, the British companies on AIM are responsible for almost three quarters of a million jobs. These figures cannot be ignored and the Government is recognising the importance of increasing support for the UK’s ambitious businesses.
One exciting area of development is the Government’s vision to create a Northern Powerhouse: a plan to attract investment into the UK’s northern cities and unite them, allowing them to collectively boost UK economic growth.
AIM is already playing its part. Those 39 Yorkshire companies quoted on AIM have a combined market cap of £3.1bn and together have raised £850m on the market. AIM is providing a platform for growth, allowing them to create jobs, innovate and ultimately contribute to our economy.
London Stock Exchange is committed to building on the success of AIM and despite the financial crisis, the market continues to rebound. A glance at, 2014’s figures show that it was the fourth highest year on record for money raised on AIM, amounting to nearly £6bn through a mixture of IPOs and follow-on capital raisings. And despite initial pre-election uncertainty, 2015 is set to be another successful year. To date, almost £2bn has been raised on the market.
Our goal for the next 20 years and beyond is to ensure that AIM builds on this momentum. We want to work with companies and investors, both private and institutional from around Britain, connecting them to a thriving market and enhancing AIM’s unique offering.
AIM’s 39 Yorkshire companies include Dart Group, the Leeds-based owner of Jet2 and Jet2 Holidays. Dart’s chairman Philip Meeson said a further four aircraft will come on stream in readiness for this summer as the group steps up its expansion.
Another AIM member is Sirius Minerals, which is poised to get the go-ahead to build a major potash mine in North Yorkshire.
Fast-growing engineering services group Leeds-based Renew Holdings has made the most of its AIM status and recently reported record half year results.
To read more about AIM visit www.lseg.com/aim20-report-2015