The potential closure of the AIM market has sparked significant concern among industry leaders.
- Claire Milverton, CEO of 1Spatial, emphasises AIM’s role in their fiscal stability and growth.
- The Tony Blair Institute suggests a new listing route for tech firms instead of closing AIM.
- Milverton fears the main market’s regulations could harm 1Spatial’s progress.
- James Ashton of the Quoted Companies Alliance warns closure could limit UK funding options.
Claire Milverton, CEO of the data management software company 1Spatial, has expressed her concerns about the possible closure of the AIM market. AIM has played a crucial role in the company’s development, especially during challenging financial periods. According to Milverton, AIM facilitated raising capital needed to pay off debts and invest in technology, enabling the company’s US expansion. She is apprehensive that closing AIM would impact companies favourably benefitting from its less stringent regulations, which have been instrumental to their success.
In response to ongoing discussions about the AIM market’s future, the Tony Blair Institute has proposed an alternative solution. The institute suggests the introduction of a specialised listing route on the London Stock Exchange designed specifically for high-growth firms in emerging technology sectors. This recommendation stems from critiques that AIM has not effectively supported scaling businesses and that the main market is overly reliant on legacy firms, primarily from the energy and finance sectors.
Milverton warns that transitioning to the main market could pose significant challenges for 1Spatial. She highlighted concerns about increased regulatory burdens and questioned the level of support they would receive from main-market shareholders, who typically expect dividends, a contrast to AIM’s supportive investor base. These regulatory changes could potentially hinder the growth trajectory of 1Spatial, particularly given its current £70 million market capitalisation.
Despite the concerns surrounding AIM, 1Spatial has reported positive performance indicators. The company has seen an expansion of its geographic footprint, securing contracts in 21 US states and engaging with several prominent French cities. Furthermore, it recently signed a significant £1 million deal with a major UK county council. Financially, 1Spatial recorded a 5% increase in revenue to £16.2 million and an 18% jump in pre-tax earnings to £2 million for the six months ending July. These figures are complemented by a 2% rise in share prices to 67p, underscoring a successful growth phase.
James Ashton, CEO of the Quoted Companies Alliance, has raised further concerns about the potential closure of AIM. He regards AIM as an essential avenue for growth companies not yet ready for the main market, highlighting its importance in diversifying UK funding options. Ashton warns that its removal could lead to fewer initial public offerings and a trend of companies going private, which would stifle entrepreneurial growth.
The debate over the AIM market’s future highlights crucial considerations for sustaining growth and innovation among UK tech firms.
