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Best AIM companies of 2017 confirmed
By Andrew Hore | Fri, 13th October 2017 - 15:54
This year's AIM Awards were held last night at Old Billingsgate in London and the winners came from a broad range of sectors with no company winning more than one award this year.
I shocked myself by managing to predict five of the winners, compared with three last year when there were fewer awards.
BEST INVESTOR COMMUNICATION
This year: Majestic Wine (WINE)
Last Year: WYG Group (WYG)
Majestic Wine is a former AIM company of the year and the wines retailer has been highly successful in its time on AIM, but it has been much tougher in recent years. The second half of the financial year to the beginning of April 2017 showed a sharp upturn in fortunes as measures taken by the management begin to pay off.
In the past year, Majestic has moved PR firm from Buchanan to Instinctif, although it appointed former Buchanan executive Gabriella Clinkard as internal head of public and investor relations just over one year ago.
BEST PERFORMING SHARE
This year: Nu-Oil and Gas (NUOG)
Last Year: Pantheon Resources (PANR)
Nu-Oil and Gas changed its name from Enegi Oil in 2015, and in the 12 months to July 2017 the share price has risen by more than 1,300%. Positive news concerning progress with the onshore petroleum lease in Western Newfoundland, Canada has helped to propel the share price upwards, particularly in July 2017. This late surge probably secured the title. The share price has subsequently fallen by one-quarter.
Nu-Oil focuses on developing marginal fields via a joint venture and it is seeking further licences.
BEST USE OF AIM
This year: GB Group (GBG)
Last Year: Conviviality (CVR)
GB Group has been quoted for more than two decades, but it moved to AIM in 2010. The greater flexibility in terms of transactions has helped the company to become one of the leading identity capture, verification and analysis businesses in the world. More than two-fifths of revenues come from fraud and risk management services.
Richard Law had headed the expansion of the group, having originally been finance director, but he was replaced in April by Chris Clark. The focus continues to be global growth.
GLOBAL ACHIEVEMENT AWARD
This year: Gooch & Housego (GHH)
This is one of the awards where the correct company won, even if I did think that ASOS (ASC) might be given the award. Gooch & Housego has been on AIM for almost 20 years and it has changed from a company dominated by its founder into a wider ranging international business. The process has not always been smooth but progress made, both organic and via acquisition, has been substantial. The share price low was in February 2009 and the current price is nearly 30 times that figure and more than double the previous high.
Gooch & Housego is a world leader in the photonics sector and it has been expanding its operations in areas such as defence and life sciences.
This year: IQE (IQE)
Last Year: MaxCyte Inc (MXCT) (MXCT)
The voting panel appears to have gone with the old timer in the form of epitaxial semiconductor wafers supplier IQE, rather than the newer robotics software supplier Blue Prism. Both share prices have roughly quadrupled in the past year.
IQE started out on the Main Market and transferred to AIM 14 years ago. The share price was a few pence at the time of the switch, but it had been more than £7 in 2000.
Historically, the company has been dependent on the wireless market and it has grown on the back of the increasing number of chips used in mobile phones. Growth in sales to the photonics market means that it was nearly one-quarter of interim revenues and other markets are also growing.
AIM TRANSACTION OF THE YEAR
Last Year: Breedon Group (BREE)
Animalcare always appeared the stand-out candidate in this category and this is the first award of the night that I got right. Ecuphar reversed into Animalcare right at the end of the period that the awards cover. The deal increases the number of vet medicines supplied by the group and brings with it a European distribution operation.
Pro forma figures for the six months to June 2017 indicate revenues of £45 million and underlying EBITDA of £6.3 million. Product development activities will be combined and there are cross selling opportunities. Management expects the earnings enhancing benefits to show through in 2018.
AIM GROWTH BUSINESS OF THE YEAR
This year: Keywords Studios (KWS)
Last Year: Fevertree Drinks (FEVR)
I felt that Keywords had the requisite track record for this award having built up an excellent track record over the past four years. The current share price is not far off 12 times the July 2013 flotation price of 123p.
Management of the localisation, testing and art services provider to the video games industry has shown that it can make earnings enhancing acquisitions. In 2012, revenues were €14.3 million and they are set to reach €135 million in 2017. Pre-tax profit was €2.74 million back in 2012 and it is expected to be €20.5 million this year.
INNOVATIVE FUNDRAISING OF THE YEAR
This year: Burford Capital (BUR)
Litigation funding provider Burford Capital seemed the only company on the shortlist to fully fit the remit for this award, which is why I felt it would win. Burford raised £175 million via an oversubscribed issue of bonds that will be traded on the Main Market and through the electronic order book for retail bonds. They yield 5% and are repayable in December 2026. Burford is expanding in Asia with the opening of an office in Singapore. The current share price is eleven times the flotation price back in 2009.
Burford's 2017 litigation finance survey shows that 81% of UK lawyers are aware of litigation finance, with 54% of those that have not used it as year expecting to do so in the next two years. There are similar percentages for US lawyers.
This year: Stockdale
Last Year: Liberum
Stockdale Securities has been rebuilding its business over the past couple of years following its name change from Westhouse and taking on Peter Ashworth, a past winner of this award, following the purchase of Charles Stanley's broking business by Panmure Gordon, helped to boost its research team.
INTERNATIONAL COMPANY OF THE YEAR
This year: Taptica International (TAP)
Last Year: Somero Enterprises Inc (SOM)
Israel-based Taptica has managed the shift in business from online to mobile marketing and a focus on data analysis has transformed the group, and I thought it was the frontrunner in this category. Taptica did not do well in its first year on AIM with profit slipping, but swift action meant that it soared to new highs in 2016. The share price has trebled over the past 12 months.
In the first half of 2017, revenues were 27% ahead at $65.6 million and pre-tax profit jumped 47% to $12.7 million. Cash generation is strong and this has enabled the payment of dividends as well as acquisitions, including the purchase of Tremor Video's demand-side platform business for $50 million.
This year: Alpha FX Group (AFX)
Last Year: Hotel Chocolat (HOTC)
The judges have gone for the newly-floated company with the best share price performance this year. Corporate foreign exchange services provider Alpha FX joined AIM on 7 April and raised £13 million at 196p a share. By the end of May, the share price had already more than doubled and, at 467.5p, down from a high of 560p last month, it has risen by 139%.
Alpha FX's clients include fellow AIM company ASOS and the total number of clients has risen to 269. In the first half of 2017, revenues were 90% ahead at £6.29 million -based on £1 billion of transactions. Pre-tax profit, excluding flotation costs, jumped from £1.72 million to £3.14 million.
ENTREPRENEUR OF THE YEAR
This year: Mahmud Kamani and Carol Kane, boohoo.com
Last Year: Diana Hunter, Conviviality (CVR)
Online fashion retailer boohoo.com has been one of the major reasons behind a strong performance in the FTSE AIM 100 index this year, so it is no surprise that joint chief executives Mahmud Kamani and Carol Kane have been recognised in these awards.
The retailer was not always a favourite with the market, and for the whole of 2015 the share price was below the flotation price, although it is currently quadruple the placing price.
One of the keys to the improvement in the share price was the regularity of profit upgrades as trading continually beat expectations. The addition of other brands - Nasty Gal and PrettyLittleThing - provides further impetus to growth.
COMPANY OF THE YEAR
This year: Fevertree Drinks
Last Year: Restore
Given the performance of spirit mixer drinks brand owner Fevertree Drinks in the three years it has been quoted, and the AIM awards it had already won, I thought that Fevertree was a banker for this award. The share price is 16 times the flotation price from November 2014. This has been achieved despite founders and pre-flotation investors selling a substantial number of shares in the flotation and in the past three years.
The latest interim figures show revenues 77% ahead at £71.9 million, pre-tax profit doubling to £24.1 million and a near-doubled dividend of 3.01p a share. Sales in the UK more than doubled and there was significant growth in the other regions.
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
|GOOCH & HOUSEGO||1,362.50p||6.53%|
|SOMERO ENTERPRISES INC||272.50p||-1.80%|
|TAPTICA INTERNATIONAL LTD||411.00p||6.75%|
|NU OIL AND GAS||0.84p||0.60%|
|HOTEL CHOCOLAT GROUP||360.25p||0.63%|
|ALPHA FX GROUP||532.50p||0.00%|
|BURFORD CAPITAL LTD||1,150.00p||2.40%|
|All data 15min delayed as of: 01:46:09 23/11/17|