More firms quit AIM than join as euro crisis takes toll

Research by accountants UHY Hacker Young showed 24 companies left AIM at the end of the year, against 22 in the previous quarter, while just 16 firms joined, down from 26 in the third quarter.

Yorkshire departures included crash repair chain Just Car Clinics.

The Goole-based company left AIM in November, saying the costs were too high and the perceived benefits of its listing have largely failed to materialise in nine years.

Digital marketing group Fuse 8 also decided to leave AIM in the final quarter of 2011.

The Leeds-based company said the departure of its chief executive Nigel Hunter and a profits warning had undermined investor confidence, “severely compromising” its fundraising plans on AIM.

Earlier in 2011 Leeds-based online search company Infoserve delisted with the approval of major shareholder David Hood.

Other firms to ditch the market included Doncaster-based engineer Clyde Process Solutions, although Leeds-based engineering business 600 Group moved to AIM from the main market to take advantage of looser listing regulations.

UHY Hacker Young said the on-going euro zone crisis is heaping pressure on AIM with more companies leaving the market than joining it.

More companies said they were leaving AIM because of financial stress, up from just four companies in the third quarter of 2011 to seven in the fourth quarter as economic growth stuttered.

Over the year as a whole, the number of new listings increased very slightly, from 65 in 2010 to 69.

The number of companies leaving the market dropped 27 per cent, year on year, down from 158 in 2010 to 116 in 2011.

Laurence Sacker, partner at UHY Hacker Young, said: “Although AIM has clearly pulled through some very difficult times, it has not been immune to the current problems with the euro.

“In the short term, a full recovery in the IPO market seems unlikely. Investors have retrenched into defensive assets and until they have confidence that politicians have fixed the euro zone crisis once and for all, they are unlikely to return to the AIM market en masse.”

UHY Hacker Young said that new companies listing on AIM are finding it much harder to raise funds than in 2010.

The total money raised by new issues was down 77 per cent in 2011.

The amount raised through IPOs fell to £513m in the 11 months to November 2011, down from £908m.