AIM companies upbeat about prospects in 2012

Companies listed on the Alternative Investment Market (AIM) are surprisingly upbeat about their prospects for 2012, according to market experts at PwC.

In a report entitled ‘Thriving on AIM’, PwC found that the average target for revenue growth among AIM-listed companies over the next 12 months is 24%, some way ahead of comparable surveys of FTSE 250 firms (average 12% target for growth) and private companies (average 18% target for growth). One in five AIM companies is looking to expand turnover by over 50% in the next year, despite the challenging economic conditions.

Mark Skedgel, PwC’s AIM leader in the Midlands, said:

“AIM companies in the region believe that the market has emerged leaner and fitter as a result of the recent shake-out of companies.

“There are also some encouraging signs regarding profitability, however, some AIM companies may need to take care not to get caught out by the current economic uncertainty. One notable finding is that AIM companies in our survey looking to new geographic markets as a source of growth see the US (28%) and the EU (24%) as their main focus. With recent Eurozone difficulties and continuing issues in the US economy, they should increasingly consider emerging markets as potential markets for growth.”

According to the survey, almost all AIM companies recognise the importance of a strong growth story in winning over investors. Yet, most feel that maintaining effective investor relations is the toughest challenge they face.

Only:

- 28% believed that investors are looking for greater transparency
- 21% of respondents think investors are looking for improved corporate governance
- 4% think investors want more diversity on their board

Mark Skedgel said:

“Smaller AIM companies in the region are always going to be vulnerable to a withdrawal of investment in difficult economic conditions. It is therefore essential that they continue to tell their growth story through effective market communication as well as maintaining high standards of governance and transparency.”

The survey also highlights the important role government has to play in supporting AIM at the current time, helping to ensure it retains its leading position as a market for growing companies.

Mark Skedgel added:

“AIM companies are calling for a simpler tax system, lower rates of corporate and employment taxes and greater investment incentives. They also recognise the importance of a skilled workforce and identify investment in education as a priority. The government’s recent commitments to alleviate the burden of export paperwork and local regulation in target export markets with the help of the UKTI is just the type of initiative that local AIM companies need.”

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Email: Mark Skedgel
Tel: 0121 265 6959