The number of businesses opting to be listed on the Alternative Investment Market (AIM) – the London Stock Exchange market for SMEs – is set to increase as businesses seek out ways to promote growth.
According to the Close Brothers Business Barometer, an independent survey designed to spot industry trends, the number of businesses appearing on the Alternative Investment Market could double.
Out of the 601 companies polled, 15 per cent were already listed and a further 15 per cent had plans to do so. Listing had a positive impact for 90 per cent of businesses surveyed, while only 1 per cent reported negative results.
Increased business growth
Patrick Haines, Regional Head of Advice at Close Brothers Asset Management, believes small and medium enterprises in the UK have a healthy appetite for growth and are seeing the value in AIM as being a platform to raise capital for investment.
Mr Haines said: “Coupled with the increased popularity of AIM stocks following their introduction into ISAs, business owners are warming up to the prospect of listing to grow their business. It also provides an explicit valuation for a company, not to mention an exit strategy for owners.”
He also warned of the need for preparation ahead of a listing, saying: “As a business grows its monetary needs often alter, as do the personal finance needs of the business owner. So it is crucial for those embarking down this route to seek financial advice as early as possible to understand the full implications of listing. When preparing to float, owners should consider their personal financial planning and how this change could impact their tax liabilities as well potential succession.”
Why list on AIM?
Making the decision to have your business featured on AIM can raise its profile and open up an array of potential investment opportunities in an international marketplace. Tax benefits and a clear idea of share value can help keep businesses in better financial shape.