A total of 222 new companies joined AIM in 2007, a substantial figure in the historical context of the market’s development, but down by 39 per cent in comparison to the 362 new entrants that joined AIM the year before (see Table 1). Similarly, the £6.23 billion of funds raised on arrival is 34 per cent lower than the £9.4 billion of 2006, reflecting a tougher new issues climate and the challenging conditions experienced by global stock markets in the second half of the year.

Of the new tally, 184 companies were admitted following a fundraising and 38 joined by way of an introduction – reductions from 281 and 81 respectively for 2006. Furthermore, the number of companies migrating from the London Stock Exchange’s Official List was also in retreat, falling from 31 to just six. Of those businesses joining AIM in search of new funds, the average haul was £28.1 million, 16 per cent lower than the £33.5 million figure averaged a year ago, though still considerably ahead of previous years.

AIM investors demonstrated an appetite for companies of all sizes, although there was a notable move towards enterprises at the smaller end of the scale, with 97 companies (44 per cent of all new arrivals) raising less than £5 million and 20 ventures (representing nine per cent of new arrivals) attracting between £5 million and £10 million. Together then, 53 per cent of the market’s new arrivals raised less than £10 million, an increase from the 40.4 per cent seen in 2006.

Among those successfully attracting larger sums, 37 companies (17 per cent) raised between £20 million and £50 million, 28 companies (13 per cent) lured in between £50 million and £100 million, and 16 companies (seven per cent) raised £100 million or more, all roughly in line with the figures from a year ago.

Busiest brokers and advisers

In terms of total funds raised, the leader among brokers is NM Rothschild, by virtue of the £637 million raised in four floats, an improvement on its performance in 2006 when it raised £357 million from five floats. All four companies floated by the 200-year-old investment bank were large investment funds: Prosperity Russia Domestic Fund, which raised £180 million; Africa Opportunity Fund (£70 million); Vietnam Infrastructure (£201 million); and PacificAllianceChinaLand (£196 million). The average share price performance of these businesses was a respectable gain of 6.5 per cent.

The chasing broking houses are led by Collins Stewart, historically AIM’s largest fundraiser, which managed to attract £625 million. That this sum was raised from 16 new companies, makes the group the most active broker by some margin. But this is some way lower than the 28 ventures it shepherded to AIM in 2006, and the total money raised represents a 63 per cent drop from the £1.6 billion of a year earlier. Nevertheless, Collins Stewart brokered sizeable sums for a diverse batch of businesses, including £100 million for private equity fund Oakley Capital

Investments, £97 million for Finnish paper mill business Powerflute and £80 million for film and TV content owner Entertainment One. Collectively, new companies brought to AIM by Collins Stewart posted a respectable 5.13 per cent share price gain in challenging markets.

A significant change this year is the absence in the higher positions of investment giants Deutsche Bank, Credit Suisse and HSBC – second, third and fifth in last year’s list of largest fundraisers. In their place, we find instead mid-market specialists, such as Panmure Gordon and KBC Peel Hunt, investment banks that have attracted greater funds than last year for fewer clients. Cenkos Securities and Landsbanki Securities are conspicuous new entrants to the table’s upper echelons as well.

Of those firms retained as nominated advisers, listed in Table 3, accountant Grant Thornton tops the list, having been involved in the raising of £661 million for 11 clients. Three of its IPOs in the year were in partnership with the aforementioned Rothschild as broker. Collins Stewart, last year’s table-topper in this category, is in second place. It extracted £550 million of new cash for its 15 new advisory clients, down from £1.5 billion for 26 nomad clients the year before.

Performance winners

In price performance terms, Beaumont Cornish and Daniel Stewart sit atop the brokers pile by virtue of average price performance gains of 72 per cent. The average boasted by Beaumont Cornish was boosted by the emphatic gains posted by property developer Commercial Group Properties and explorer Leni Gas & Oil, while Daniel Stewart’s performance was propelled by a 213 per cent share price rise at Hitchens Group, the provider of clearance outlets for surplus stocks of clothing and household goods, as well as a doubling in value of shares in clean energy business Helius Energy from an issue price of 26p to 52p.

Both also feature at the top of the list of nominated advisers in price performance terms, as does Hanson Westhouse with an average rise of more than 48 per cent, reflecting share price gains of 95 per cent and 50.6 per cent at US-focused hydrocarbon production and development company Nighthawk Energy and Chinese petrochemicals group Haike respectively. Adviser Zimmerman Adams occupies fourth position with an average advance of 25.5 per cent, buoyed by gains at VPhase, Hertford International and Dragon-Ukrainian Properties & Development.

Sector superiority

Once again, the largest amounts of cash found their way into the real estate, equity investment instruments and general financial sectors, although the leading sectors on AIM all showed declines in both the volume of new companies welcomed and the size of fundraisings. One exception was support services, where total funds raised increased to £195 million from £174 million. It is also worth pointing out that equity investment instruments and support services, two very broad parts of the market, have usurped the mining sector in terms of new issue numbers, with mining – in the midst of a veritable boom until quite recently – reporting a drop from 36 companies to just 13 new entrants in 2007.

In the real estate sector, there were sizeable new issues, ranging from London & Stamford (£285 million) to China Real Estate Opportunities (£398 million) and PacificAllianceChinaLand (£244 million). Ultimately, however, funding levels fell by 42 per cent to £1.9 billion from £3.3 billion previously.

The equity investment instruments sector encountered a less severe investment drop – down by 22 per cent to £1.1 billion – with its performance bolstered by a number of sizeable floats, including the aforementioned Vietnam Infrastructure and Prosperity Russia as well as Oakley, Loudwater Trust and pre-IPO fund St Peter Port.

Gains and losses

The individual share price performances are examined in greater detail in Table 5, where Commercial Group Properties is the leading stock with a gain of 268 per cent, based on a surge from an issue price of 50p to 184p as the company achieved several of its aspirations faster than expected. Led by experienced property entrepreneur Ken Wills, CGP owns three sites in southeast England and has intrigued investors with a potentially lucrative partnership with Chinamex, the official trading platform of the Chinese government, which is looking to develop a business centre at Manston Business Park (part-owned by CGP) near Ramsgate in Kent.

As well as bargain retail group Hitchens, previously traded on PLUS as Azurite Investments, strong share price performances were posted by Applied Intellectual Capital, a California-based investor in environmentally focused technology (which increased from 95p to 250p, a gain of 163 per cent), as well as profitable and fast-growing spread-betting group Worldspreads, whose share price rose by 115 per cent to 101p. Other notable increases were posted at Leni Gas & Oil, up 113 per cent; VPhase, a spin-out from AIM-listed Energetix into cash shell Flightstore that surged 108 per cent; oil and gas investor Bramlin, up 105 per cent; and biomass power developer Helius, up exactly 100 per cent.

Lamentable performers, as ranked in Table 6, include GeneMedix, the biopharmaceutical company controlled by Mumbai’s Reliance Life Sciences, which shed 88 per cent of its value. Two North American companies also disappointed their investors. US-headquartered Vectrix, which produces high-performance zero-emission scooters, plummeted from an issue price of 52p to 11.25p, a drop of 78.37 per cent, following disappointing sales and product quality issues that have now been resolved. Loss-making Canadian concern Silanis shed 77 per cent of its value at 10.25p after the electronic signature software group tested investors’ patience with disappointing figures – a severe recent profits warning has hardly helped sentiment. Cayman Islands-incorporated DiamondTech, the maker and operator of laser diamond sorting machines, has slipped dramatically from an issue price of 13p to just 3.38p, representing a fall of 74 per cent.

AIM’s international footprint

77 international companies joined AIM last year. While still healthy, this marked a 37 per cent fall from the 122 international concerns that AIM welcomed in 2006. The reduction in funds raised was more marked, at 51 per cent, with £2.3 billion raised in 2007, compared with £4.7 billion a year earlier. The British Virgin Islands and the Cayman Islands, two tax-friendly jurisdictions, led the overseas contingent, with 15 and 13 companies incorporated on their shores respectively.

Many of the larger floats on AIM were based in these regions, with Cayman Islands-incorporated companies including Vietnamese and Cambodian real estate investor JSM Indochina, which pulled in £110 million, and Leaf Clean Energy, which raised £200 million for investment in North American clean energy projects. Public Service Properties Investments, a British Virgin Islands-incorporated company specialising in real estate investment in the UK, US and Switzerland, raised £75 million, as did American Leisure Group, receiving enthusiastic backing for Floridian holiday resort development.

Overall, the numbers of North American companies coming to AIM slowed, with the US and Canada contributing 12 and eight companies respectively to AIM, down from 17 and 12 in the preceding year, with amounts raised by companies emanating from these nations reduced from £449 million and £179 million to £254 million and £102 million.