£650 million ($975 million) was raised for IPOs during 2015, a 77% decrease from 2014. After a two year bull market for AIM IPOs, 2015 was a year for the market to digest all of the new entrants. This is evidenced by the fact that £4.9 billion ($7.4 billion) was raised during 2015 for secondary offerings, up 51% from 2014 and the most since 2010.
UK equities' markets also faced four major political and macroeconomic headwinds during 2015; the UK General Election, a resumption of the Greek debt crisis, the continuing collapse of the energy and commodity sectors and general market volatility triggered by China and other emerging markets and the U.S. Federal Reserve. The two political headwinds have been ameliorated; the UK General Election was definitive and positive for business and Greece has taken a more reasonable and realistic position with the EU, however, the two macroeconomic headwinds will likely linger throughout 2016.
The average and median AIM IPO during 2015 raised $26 million and $15 million, respectively, with 71% raising between $5 million and $75 million. 8 of the 38 IPOs included meaningful liquidity events for selling shareholders. The average and median opening market caps were $83 million and $42 million, respectively, with 82% falling between $15 million and $375 million.
From a sectoral perspective, financials accounted for 24% of AIM IPOs with four of the nine being Investing Companies with TMT mandates. Healthcare AIM IPOs accounted for 16% with five of the six coming from the biotech sub sector and none of the six generating revenue. Consumer services also accounted for 16% and it's interesting to note the technology component; three of the six engage with consumers exclusively online. Six industrial companies completed IPOs on AIM for a 16% share. Pure play technology companies accounted for 13%. Consumer goods' businesses accounted for 11% where two of the four were focused online. Finally, the basic materials (i.e. mining) and oil and gas sectors accounted for an aggregate of 4% of AIM IPOs during 2015.
This post provides insight into each of the 38 companies; the industries and geographies in which they operate and their overall listing, financial and operating metrics.
Highlights
- 38 companies completed IPOs on AIM during 2015, a 54% decrease from 2014
- Two are U.S. biopharma companies, one raised $100 million, the 2nd largest IPO
- £650 million ($975 million) raised for IPOs during 2015, a 77% decrease from 2014
- The 2013/14 AIM IPO bull market needed a breather to digest the new entrants
- £5 billion ($7.5 billion) raised in secondary offerings during 2015, most since 2010
- UK equities’ markets, and others, faced political and macroeconomic headwinds
- Average IPO raised £17.1 million ($25.7 million), median £9.8 million ($14.7 million)
- At a cost of 9.3% and 11.9%, respectively, of gross funds raised
- 71% of IPOs raised between £3 million and £50 million ($5 million and $75 million)
- Average opening MC of £55 million ($83 million), median £28 million ($42 million)
- 82% of MCs between £10 million and £250 million ($15 million and $375 million)
- IPO dilution of existing shareholders amounted to 29%
- Average post-IPO free float of 39%
- Average and median share price return of 16% and 5% since IPO (median date 6/3/15)
- FTSE AIM All-Share Index rose 5% during 2015 but fell 5% from 6/3 - 12/31/15
- 22 of the 38 companies generated revenues > £2 million (range £2 million - £1.1 billion)
- Median trailing pre-money revenue multiple of 1.54
- Those w/o significant revenues; investing companies, healthcare and mining/O&G
- 10 of the 38 companies earned profits > £1 million (range £2 million - £13 million)
- Median trailing pre-money P/E ratio and EBITDA multiple of 14.85 and 10.26
- Industry and geographic dispersion and financial profile of the 38 companies - pages 5 - 7
- Detailed descriptions and insights into the 38 companies - pages 8 - 10
Number of IPOs
|
Gross Funds Raised
(in £ millions)
|
Average Funds
Raised
(in £ millions)
|
|
2011
|
45
|
560
|
12
|
2012
|
45
|
695
|
15
|
2013
|
62
|
1,025
|
17
|
2014
|
82
|
2,818
|
34
|
2015
|
38
|
650
|
17
|
Total
|
272
|
5,748
|
21
|
The table above shows that after a two year
bull market for AIM IPOs, 2015 was a year for the market to digest all of the
new entrants. This is evidenced by the
fact that £4.9 billion ($7.4 billion) was raised during 2015 for secondary
offerings, the most since 2010. UK
equities’ markets also faced four major political and macroeconomic headwinds
during 2015; the UK General Election, a resumption of the Greek debt crisis,
the continuing collapse of the energy and commodity sectors and general market
volatility triggered by China and other emerging markets and the U.S. Federal
Reserve. The two political headwinds
have been ameliorated; the UK General Election was definitive and positive for
business and Greece has taken a more reasonable and realistic position with the
EU, however, the two macroeconomic headwinds will likely linger throughout
2016.
From a sectoral perspective, financials accounted for 24% of
AIM IPOs with four of the nine being Investing Companies with TMT
mandates. Healthcare accounted for 16%
with five of the six coming from the biotech sub sector and none of the six generating
revenue (two of the six are U.S. companies and one raised $100 million, the 2nd
largest IPO). Consumer services also
accounted for 16% and it’s interesting to note the technology component; three
of the six engage with consumers exclusively online. Six industrial companies completed IPOs on AIM
for a 16% share. Pure play technology AIM IPOs accounted for 13%. Consumer
goods’ businesses accounted for 11% where two of the four were focused online. Finally, the basic materials (i.e. mining) and
oil and gas sectors accounted for an aggregate of 4% of AIM IPOs during 2015 after
accounting for an aggregate of 11%, 21%, 33% and 51% during 2014, 2013, 2012
and 2011.
The chart below provides the distribution of gross funds
raised from AIM IPOs during 2015. While there
was a spike in IPOs raising between £15 million and £30 million ($23 million
and $45 million), this year did not have enough activity to convey the fact
that the sweet spot for AIM IPOs is between £3 million and £50 million ($5
million and $75 million).
Of the aggregate gross funds raised, 80% was for the
companies and 20% was for selling shareholders, which were present in 10 of the
IPOs, with eight selling a meaningful equity stake. While the average amount of gross capital
raised was £17.1 million ($25.7 million), the median was only £9.8 million ($14.7
million).
The equation in the chart below can be used to predict the
cost of an AIM IPO with 88% confidence.
The 26 data points represent the gross funds raised and associated costs
for the non-Investing Company IPOs that raised at least £3 million ($5
million). Since these 26 companies raised
an average of £21.55 million ($32.33 million), the expected cost would be £1.85
million ($2.78 million) or 8.6% of the gross funds raised.
The average and median offering costs for AIM IPOs amounted
to 14.7% and 10.7%, respectively, of the gross funds raised, however, the
average, in particular, is skewed by a handful of relatively small IPOs where
the fixed costs dominate.
The chart below provides the distribution of opening market
capitalizations. The average company’s
opening market capitalization was £55 million ($83 million) whereas the median
was £28 million ($42 million). The sweet
spot for market capitalizations on AIM is between £10 million and £250 million
($15 million and $375 million).
The chart below illustrates the IPO dilution of existing shareholders over the last five years. As expected, dilution decreased coming into the two year bull market for AIM IPOs in 2013 and increased coming out of the bull market in 2015. This is due to the fact that favorable market conditions place companies in stronger negotiating positions with respect to pre-money valuations and vice versa.
The final chart in this section provides the distribution of
share price returns since each company completed its AIM IPO during 2015
through the end of the year. It should be
noted that the median IPO date is June 3, 2015, therefore, the average and
median returns of +16% and +5%, respectively, only represent, on average, the
last 211 days of 2015. As a
point-of-reference, the FTSE AIM All-Share Index rose 5% during 2015 but fell 5%
from June 3, 2015 through December 31, 2015; therefore, the relative performance
of the 37 companies that completed their IPOs on AIM during 2015 and remained
listed through yearend has been quite strong.
The average and median post-IPO free float for all 38 companies was 39%
and 32%, respectively.
Industry and Geographic Dispersion and Revenue and Profitability Profile
Revenue and
Profitability*
|
UK (24)
|
China (3)
|
U.S. (2)
|
Israel (2)
|
Africa (2)
|
Other (5)
|
Totals (38)
|
Financials (9)
|
1 SR & SP
2 SR
5 Neither
|
1 Neither
|
1 SR & SP
2 SR
6 Neither
|
||||
Healthcare (6)
|
3 Neither
|
2 Neither
|
1 Neither
|
6 Neither
|
|||
Consumer
Services (6)
|
2 SR & SP
1 SR
|
1 SR & SP
|
2 SR & SP
|
5 SR & SP
1 SR
|
|||
Industrials (6)
|
2 SR & SP
2 SR
1 Neither
|
1 SR & SP
|
3 SR & SP
2 SR
1 Neither
|
||||
Technology (5)
|
2 SR
|
1 SR
|
1 SR
1 Neither
|
4 SR
1 Neither
|
|||
Consumer
Goods (4)
|
3 SR
|
1 SR & SP
|
1 SR & SP
3 SR
|
||||
Basic
Materials (1)
|
1 Neither
|
1 Neither
|
|||||
Oil & Gas (1)
|
1 Neither
|
1 Neither
|
|||||
Totals
(38)
|
5 SR & SP
10 SR
9 Neither
|
2 SR & SP
1 Neither
|
2 Neither
|
1 SR & SP
1 SR
|
2 Neither
|
2 SR & SP
1 SR
2 Neither
|
10 SR & SP
12 SR
16 Neither
|
* Significant
Revenues (SR) and Significant Profitability (SP) are defined as > £2
million and > £1 million, respectively.
|
|||||||
AIM-listed companies are organized into 90 sub sectors,
which feed into 40 sectors, which feed into 10 super sectors. During 2015, only two super sectors,
Telecommunications and Utilities, were not represented with IPOs. The first pie chart above
illustrates the relative number of AIM IPOs in each of the eight represented super
sectors. Since the classifications can
be deceptive, the table at the end of this newsletter on pages 8 - 10 provides some
detailed descriptions and insights into the individual companies.
From a sectoral perspective, financials accounted for 24% of
AIM IPOs with four of the nine being Investing Companies with TMT
mandates. Healthcare accounted for 16%
with five of the six coming from the biotech sub sector and none of the six
generating revenue (two of the six are U.S. companies and one raised $100
million, the 2nd largest IPO).
Consumer services also accounted for 16% and it’s interesting to note
the technology component; three of the six engage with consumers exclusively
online. Six industrial companies
completed IPOs on AIM for a 16% share.
Pure play technology companies accounted for 13%. Consumer goods’ businesses accounted for 11%
where two of the four were focused online.
Finally, the basic materials (i.e. mining) and oil and gas sectors
accounted for an aggregate of 4% of AIM IPOs during 2015 after accounting for
an aggregate of 11%, 21%, 33% and 51% during 2014, 2013, 2012 and 2011.
The second pie chart above shows the main
country of operation for the companies that completed IPOs on AIM during 2015. Unsurprisingly, the UK is the main place of
operation for more AIM-listed companies than any other country. Approximately 61% of the 1,044 companies listed
on AIM are based in the UK. During the
depths of the global financial crisis in Europe, UK companies only accounted
for 31% of AIM IPOs from 2010 - 2012. The
healing process that began in Europe in 2013, and took firm hold in the UK,
triggered the start of a two year bull market for AIM IPOs with UK company
participation bouncing back to expected levels, capturing 53%, 63% and 63% of
AIM IPOs during 2013, 2014 and 2015, respectively.
Of the 38 companies that completed AIM IPOs during 2015, 22 (58%)
generated significant revenues (i.e. > £2 million or $3 million) during
their most recent financial year with the range being £2 million - £1.1 billion
($3 million - $1.7 billion). The average
trailing pre-money revenue multiple was 4.70, although this is heavily skewed
by one company at 63.50 and would otherwise be 1.82, and the median was
1.54. Of the 22 companies that generated
significant revenues, 10 (45%) earned significant profits (i.e. > £1 million
or $2 million), with the range being £2 million - £13 million ($3 million - $20
million). The average trailing pre-money
P/E ratio and EBITDA multiple for the 10 companies that earned significant
profits was 16.14 and 10.45, respectively, and the medians were 14.85 and 10.26.
Of the 24 UK companies that completed AIM IPOs during 2015,
15 (63%) generated significant revenues during their most recent financial year. Of these 15 companies, five (33%) earned
significant profits. The comparative
metrics for 2014 were 56% and 69%, respectively, indicating that investors
during 2015 wanted to see a little more commercial traction but are apparently willing
to wait for significant profits. Of the
14 companies from outside the UK that completed AIM IPOs during 2015, seven (50%)
generated significant revenues. Of these
seven companies, five (71%) earned significant profits. The comparative metrics for 2014 were 60% and
44%, respectively, leading to the opposite conclusion reached above for the UK
companies.
A not insignificant number of companies (5 of 38) completed
their AIM IPOs during 2015 via the ‘fast track route to AIM’, wherein their
securities were traded on an AIM Designated Market (ADM) for at least the
previous 18 months. The ADM for four of
the five companies was the UKLA Official List (i.e. the London Stock Exchange’s
Main Market) and the other company used the Australian Securities Exchange
(ASX) and remains dual listed. The fast
track route to AIM had been rare; used by only five of the 234 AIM IPOs from
2011 - 2014. Companies utilizing the
fast track route do not have to produce the typical AIM Admission Document but
rather a brief, but detailed, pre-admission announcement. The 10 ADMs are the top tier markets of the
ASX, Deutsche Börse Group, Johannesburg Stock Exchange, NASDAQ, NYSE, NYSE
Euronext, NASDAQ OMX Stockholm, Swiss Exchange, TMX Group and UKLA Official
List.
Two of the 38 AIM IPOs during 2015 were the result of
operating companies being acquired by Main Market-listed Investing Companies and
simultaneously raising fresh capital on AIM.
The Investing Companies then delisted from the MM and the operating
companies emerged on AIM.
Only one company that completed its IPO on AIM during 2015
migrated to AIM from the UK’s ICAP Securities & Derivatives Exchange (ISDX). From 2011 - 2014, 21 of the 234 companies
that completed IPOs on AIM were previously listed on the ISDX.
One final point to note during 2015 is that one company simultaneously
completed its IPO on AIM and the Enterprise Securities Market of the Irish
Stock Exchange (ESM).
|
(9)
|
One is an Investing Company that intends to identify,
acquire and invest in Chinese-based SMEs with technology and/or IP in the
education sector that can be leveraged through the company’s existing contacts
at local and international higher education institutions for the provision of
online vocational training video courses for industrial workers, one is an
Investing Company that intends to invest in UK and Chinese businesses or
projects that are seeking to expand and/or establish themselves
internationally in the media and entertainment sectors, primarily theatre
production and the music industry, one is an Investing Company that intends
to buy, fix and sell businesses in the European Telecommunications, Media and
Technology (TMT) sector that are focused on network-based communications
and/or entertainment, one is one of the UK’s leading providers and
administrators of Self-Invested Personal Pensions (SIPPs) and Small Self-Administered
Schemes (SSASs), one provides finance to the UK clients of insurance brokers
and professional firms in order to help them spread the cost of insurance
premiums and professional fees, one is a Central London-focused residential
REIT that intends to acquire, develop and manage residential property assets
by acquiring Special Purpose Vehicles (SPVs) with historic capital gains,
providing an exit for the vendors of SPVs and attractive yields for the
company’s investors, one is an Investing Company that was established to
acquire and operate companies in the media sector with a focus on the UK, the
U.S. and (to a lesser extent) Europe, one is an Investing Company focused on
investing in UK companies and platforms which provide specialist financing and
alternative asset management services to the SME and professional services
sectors; financing trade and securing specialist funding throughout the
supply chain to help fuel growth in these sectors and one is a UK-based
hybrid estate agency that uses a combination of local property experts,
technology and customer facing software for the buying, selling and letting of
residential property at a fraction of the cost of traditional estate agents
|
Healthcare
(6)
|
One is a UK-based drug discovery and development company focused
on improving the characteristics of existing drug classes to create highly
differentiated, best-in-class new drugs in the areas of cancer and infectious
disease where their oncology-related drug programs encompass immuno-oncology
and their anti-infective drug programs have the potential to produce one of
the first new chemical classes of antibiotics in a generation, one is a
U.S.-based, clinical stage biopharmaceutical company specializing in the
development of novel antibiotics designed to be effective against serious and
life-threatening infections caused by multidrug-resistant bacteria, one is a
U.S.-based pharmaceutical company that uses its proprietary computational
drug discovery platform to generate multiple, chemically-diverse, novel drug
candidates for each of its drug programs by accurately modeling molecular
interactions, developing sophisticated optimization algorithms and the
computer integration of synthetic and medicinal chemistry knowledge,
resulting in the design of novel potential therapeutics for medical
conditions in anticoagulation, diabetic macular edema and oncology, one is a
UK-based clinical stage drug development company focused on the treatment of
cancer and neurological conditions where its core technology is a patent-protected
method of stabilizing natural and synthetic versions of the naturally
occurring compound sulforaphane, a known anti-cancer agent derived from
broccoli and other brassica vegetables, one is a Finland-based clinical stage
drug discovery and development company focused on acute organ traumas, cancer
immunotherapy and vascular damage where its lead candidate has been developed
to treat acute respiratory distress syndrome, a rare, severe, life threatening
medical condition characterized by widespread inflammation in the lungs and
one is a spin out from the University of Sheffield, UK that has two late
stage drug candidates targeting diseases of cortisol deficiency; one for
Congenital Adrenal Hyperplasia (CAH) in adults and the other for Adrenal
Insufficiency, including CAH, in children
|
Consumer Services
(6)
|
One is a leading UK automotive dealership and leasing
group, one is a UK-focused, real money, bingo-led online gaming operator, one
owns and operates five luxury beachfront hotels and a beachfront restaurant in
Barbados, one has developed a proprietary, artificial intelligence based software
platform that enables the automation and optimization of online advertising
campaigns, one is the leading retailer of gasoline and premium food and hot
beverages along motorways in the Republic of Ireland with a growing presence
in the UK and one was a Main Market-listed Investing Company that joined AIM
simultaneous with the acquisition of a digital media and analytics agency
that creates multi-channel campaigns across pay-per-click, natural search,
display advertising and other paid media, underpinned by proprietary
analytics; however, their overall strategy is to build a network of digital
companies spanning the marketing services, technology and e-commerce sectors
across the UK, the U.S. and Europe wherein each company will benefit from access
to the deeper resources of a strong platform of digital marketing services,
technology and e-commerce businesses in key revenue/growth sectors; for
example, digital strategy, analytics and insight, media planning and buying,
content and creative, customer relationship management, e-commerce and user
experience
|
Industrials
(6)
|
One provides assistance and travel service products, such
as insurance policies, via a B2B2C business model worldwide, one is the UK’s
leading provider of façade access and fall arrest equipment services,
lightning protection and electrical testing, high-level cleaning and
specialist electrical and mechanical services, one provides gas heating
appliance installation and maintenance services to residential and commercial
properties and general building services, such as domestic and commercial
plumbing, electrical work and general repairs across London and South East
England, one is a China-based provider of air filtration and clean air
technology products to the industrial, commercial and residential markets, one
is a mid-sized, UK commercial law firm and one is an education group
operating an online independent secondary school in the UK with a 10-year
track record, 42 teachers and 516 students
|
Technology
(5)
|
One is a software developer and operator of its own online
brokerage that has developed a simplified trading platform for themselves and
other online brokers in Europe, with expansion plans focused on Japan, China
and the U.S., to provide individuals with the ability to trade binary options,
one is a leading provider of satellite broadband services to consumer and
business users in the UK and Europe where they intend to continue to grow the
subscriber base organically and through acquisition by consolidating a fragmented
market across Europe where 20 million homes and businesses are not expected
to be able to access broadband speeds of more than 2 Mbps for the foreseeable
future via fixed line broadband networks, falling into what is called the
‘digital divide’, one designs, develops and commercializes mobile social
media applications focused solely on Myanmar; incorporating Burmese customs,
characters and language to drive user acquisition through locally relevant
products, acquire relevant consumer data (and allow advertisers to data mine
the Burmese script content) and monetize its digital properties through the
sale of advertising and digital goods, one is a UK-based designer and
manufacturer of a broad range of customized radio frequency, microwave and
millimeter-wave components and subsystems used in mobile wireless
communication equipment, point-to-point communication systems and related
defense sectors and one is a Switzerland-based security software company with
a range of products for mobile devices, PCs and communications networks
|
Consumer
Goods
(4)
|
One is a leading Chinese producer and processor of frozen
seafood, seaweed-based foods and marine snack foods for the domestic market and
for export to Japan, South Korea and the U.S., one is one of the largest UK-based
online retailers of musical instruments and music equipment, selling
third-party and own-branded products to customers ranging from beginners to
musical enthusiasts and professionals in the UK and Continental Europe
through its internally-developed ecommerce platform, with multilingual,
multicurrency functionality presented on custom-designed websites in 19
countries, one is one of the largest retailers of fishing tackle in the UK,
catering to all types of anglers - coarse, carp, game and sea fishing -
operating online and from a chain of seven retail outlets in the North of
England which are designed to be ‘destination’ stores with a comprehensive
range of products, knowledgeable and enthusiastic staff and an offering that
includes own-branded products and one is a UK-based company that develops,
produces and supplies hobby and toy products through an international network
of specialist and multiple product retailers
|
Basic
Materials (1)
|
This company is focused on the discovery and development
of high-quality iron ore projects in Africa, initially focusing on Gabon
|
Oil & Gas
(1)
|
This company is an explorer for, and proposed producer of,
unconventional gas, principally coal bed methane, in Botswana where the
vision is to augment the energy needs of southern African which is
experiencing an energy deficit due primarily to rapid population and economic
growth
|
No comments:
Post a Comment