Companies

Four companies left AIM due to financial difficulties in 2020, UHY finds

The group said that the last quarter has seen 16 new companies listed on AIM, the ‘highest number since Q2 2018’

Four companies in total were forced to leave AIM in the last year due to financial distress and insolvency, the lowest number since 2007, according to UHY Hacker Young, a national accountancy group.

UHY Hacker Young said the “financial stress” caused by Covid-19 has not resulted in “mass de-listings” that some may have expected at the start of the lockdown last year. 

In comparison, 66 left the market in 2009/10 after the global financial crisis due to financial difficulties.

Furthermore, UHY Hacker Young discovered that the AIM market grew for the first time since Q3 2017-  increasing by a net five companies in Q2 2021

The group said that the last quarter has seen 16 new companies listed on AIM, the “highest number since Q2 2018”.

Of the companies that left AIM in the last year, 26 were the subject of takeover deals, accounting for 55% of all de-listings, the highest proportion since 2006. 

Daniel Hutson, partner and head of audit at UHY Hacker Young, said: “AIM is an increasingly attractive hunting ground for both trade buyers and private equity firms.”

“AIM companies have also coped far better with the Covid crisis than the financial crisis. Insolvencies of AIM companies have been very rare, further enhancing the reputation of the market.”

He added: “AIM is now a much more robust market than it was in the last recession – it has better companies, better regulation and a better orientation towards growth sectors like technology.”

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