2021: the year AIM IPO activity bounced back

Although 16 AIM IPOs in 2020 represented a recovery from the all-time low of 10 the previous year, 2021 will go down as the year the market re-emerged as a significant funding opportunity. 

With 66 IPOs recorded in the year, 2021 was the market’s most active year for new IPOs since 2014. 

Kicking off with bar group Nightcap’s £4m fundraise in January and ending with the listing of hydrogen and ammonia production company Atome Energy shortly before the year’s end, 2021’s IPOs raised £1.5bn for those 66 companies, providing funds to help them deliver their growth strategies. 

Looking back at the year

• Retailer Victorian Plumbing Group reported the highest market capitalisation on IPO (£986m) – also the highest ever for AIM. 
• The largest single fundraising IPO was real estate investment company Life Science REIT’s £350m float in November.
• Setting aside the skewing impact of the Life Science REIT transaction, most new funds were raised in the discretionary consumer sector, where 10 IPOs raised a total of £206m – the largest being that of car-interiors manufacturer CT Automotive Group, which raised £34m in December.
• The largest reverse takeover was quarried materials investment company SigmaRoc’s acquisition in August of Nordkalk, a limestone business generating most of its revenues from Finland and Sweden. SigmaRoc raised over £260m from the listing, which was used to facilitate the €470m acquisition. SigmaRoc started 2021 with a market capitalisation of £176m. This increased to £542m on re-admission, falling back by 1.7% to £533m by year-end.

Winners and losers among AIM-listed companies in 2021

Among established AIM entities, online fashion brands ASOS and Boohoo Group were the most valuable companies coming into 2021, with market capitalisations of £4.78bn and £4.33bn respectively. By the year’s close, however, both had seen significant valuation reductions – ASOS by 50% to £2.39bn and Boohoo by 67% to £1.56bn – as both grappled with lower than anticipated demand and a backdrop of supply chain challenges and cost increases. The Boohoo reduction of £2.76bn was the biggest absolute value reduction over the 12 months.

The positions of these two retailers at the top of the tree were taken by two companies operating in the pharma-biotech sector, Hutchmed and Abcam. Chinese biopharmaceutical company Hutchmed increased its valuation by 37% to £4.58bn as a sequence of positive announcements were well received by the market. Antibody developer Abcam increased its capitalisation by 13% to £3.97bn, albeit that figure has dropped somewhat in the initial weeks of 2022.

In terms of the largest absolute increase in market capitalisation over 2021, Impax Asset Management Group achieved a £1.04bn uplift, more than doubling its value to £1.95bn by year-end. Over the year, this sustainability-focused asset management firm saw its value growth outpace that of its funds under management.

How newly listed AIM companies performed in 2021

Of the companies listing on AIM in 2021, 23 did so in the first half of the year. Among these entities, Kistos, the low-carbon-intensity energy producer, reported the largest absolute increase in value to the year’s close, up £201m to £340m, representing a 144% increase.

Despite such impressive figures, Kistos wasn’t the best performer in relative terms. That accolade went to another biotech company, 4basebio, which reported a 317% increase from its IPO market capitalisation, as its value rose from £18m to £76m by the beginning of 2022.

At the other end of the scale, although joining the market in June with the highest market capitalisation since the creation of AIM, Victorian Plumbing Group ended the year having seen a £601m (61%) reduction, to £386m, following its statement warning that despite reporting growth in 2021, current year profitability (to September 2022) may be closer to that achieved in 2020. 

These big increases and reductions in market capitalisation should be noted by any business considering an IPO, as levels of share price volatility ought to be factored into decision-making about whether and when to list. However, despite the variation mentioned, we are increasingly seeing business owners and management teams identifying AIM as a highly attractive source for the development capital they need to deliver their growth strategies faster.

It will be interesting to see this time next year whether similar levels of value variation are evident and whether the 2021 increase in AIM IPO activity was a blip or the start of a sustained period of growth.

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