The majority of the money, some £230 million, is spread between the 31 AIM-listed cash shells, while the balance of £11 million is held by 21 PLUS-quoted vehicles, according to the research from Business XL magazine.

In total, shells hold five times more cash than they did at the same time last year, with market valuations ranging from £120,000 for the smallest shell to £109 million for the largest.

Cash shells can offer businesses an alternative route to a listing on the stock market through a “reverse takeover”, whereby the shell company acquires a larger, private company.

Richie Clark, head of capital markets at law firm Fox & Williams, says, ‘In the recessionary times we’ve just been through, reverse takeovers had a certain appeal. The advantage is that the market conditions are not so important [as in an initial public offering], if you are relying on the existing cash in the shell.’

Ila Security, which supplies personal security alarms for women, joined AIM in March through a reverse takeover by cash shell West End Ventures. CEO Simon McGivern says that the money in the shell proved useful at a time when it was difficult to raise funding from other sources.

Adds McGivern, ‘We looked at innovative ways to raise cash, and thought if we could find a cash shell that was clean enough, it would help our reputation with big retailers and also give confidence to international retailers who hadn’t heard of us – a listing is definitely a marketing opportunity.’