The AIM segment of the London Stock Exchange amidst the coronavirus pandemic

The global capital markets have been going through an extremely rough patch during the past month. Most indices have been trading at their 52-week lows amidst the fear of the coronavirus pandemic spreading to a greater number of countries and lockdown conditions prolonging for an indefinite period of time. On the London Stock Exchange, the AIM market segment and the Main market segment usually behave differently to global cues. Given these characteristics, the FTSE AIM All share index does not always move in unison with its larger cousins, the FTSE 100 index and the FTSE 250 index. The current pandemic induced crisis has been having a very depressive impact on the trading conditions at the London Stock Exchange with most investors not willing to take risks and head out to take positions in these highly volatile conditions.

Today we would try to analyze how the AIM segment of the London Stock Exchange has performed amidst the volatile market conditions, in comparison to its peer indices on the exchange. We will also look at the top five companies on the market in terms of the trading returns generated by them since the beginning of the year and lastly we will see how the market has performed in terms of new issues entering the market since the beginning of the year in comparison to the Main Market Segment.

AIM market segment performance against the main market segment performance

Source – Thomson Reuters, YTD performance of FTSE100 vs FTSE 250 vs FTSE AIM All Share index

Since the beginning of the year 2020, all three indices have been moving in unison. All three indices started to trade in the negative around 21 February 2020, when the pandemic started to gain alarming proportions in the country. As of Friday 20 March 2020, till the time his report was being written, the FTSE 100 had provided a return of -31.7 per cent since the beginning of this year. The FTSE 250 was the worst performer of the three giving a return of -41.37 per cent since the beginning of the year and the FTSE AIM All Share index performing better than the FTSE 250 index but worse than the FTSE 100 index by providing a return of -38.44 per cent.

Top Performers on the AIM

1. EDDIE STOBART LOGISTICS PLC – (LON:ESL) Eddie Stobart Logistics Plc is a trucking, logistics and supply chain providing company. The shares of the company have gained 75 per cent in value since the beginning of the year. In its results announced on 26 February 2020, the company had revealed that its revenues had increased by 26 per cent year on year in the six months ended 31 May 2019 to stand at £421.3 million compared to £334.5 million for the corresponding period in 2018. The adjusted loss before tax came in at £5 million compared to a restated loss of £1.9 million in the corresponding period of the prior year. Due to a delay in the publication of 1HFY19 results, the stock was suspended from trading on the AIM.
2. KEYWORDS STUDIOS PLC - (LON:KWS) Keywords Studios Plc is an electronics entertainment company providing its services to the global video games industry. The shares of the company have gained 24 per cent in value since the beginning of the year. In a trading statement released on 30 January 2020, the company had informed that its revenues would be around €326 million for the full year 2019 compared to €250.8 million reported by it for the year 2018, registering a growth of 30 per cent. Adjusted profit before tax is expected to be at €41 million, representing a growth of 8% from the year-ago period. The company’s profitability reflected strong revenue growth, partially neutralized by ongoing investment in its operations.

3. IMIMobile PLC – (LON:IMO) IMIMobile Plc is the United Kingdom domiciled communications software provider, and the company claims that its products help its clients improve their interactions with the consumers to enhance customer experience and reduce operating cost. The shares of the company have gained 6 per cent in value since the beginning of the year. In the interim results released by the company on 29 November 2019, the company announced that it had reported a revenue of £83.0 million for the half-year ended 30 September 2019 compared to revenue of £67.2 million for the corresponding period in 2018, signifying a growth of 24 per cent. Adjusted profit after tax came in at £2 million, up 12% year over year.

4. SILENCE THERAPEUTICS PLC – (LON:SLN) Silence Therapeutics Plc is a United Kingdom-based pharmaceuticals and biotechnology company, majorly involved in the research and development of pharmaceutical products based on RNA (ribonucleic acid) technology. This technology harnesses the body’s natural occurring mechanisms to create therapeutic effects within its own cells in the body. Company’s pipeline basically includes various programs under three core categories which are hematology, cardiovascular diseases and rare diseases. Under Hematology, the programs include Beta Thalassemia which has completed the pre-clinical phase, Myelodysplastic Syndrome, which has also completed the Pre-clinical phase and an undisclosed indication which is in the discovery phase.

For the six months ended 30 June 2019, loss after tax of the company came in at £8.2 million while cash and cash equivalents stood at £16.5 million at the end of the period.

The shares of the company have gained 5 per cent in value since the beginning of the year.

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5. YOUNG & CO'S BREWERY PLC – (LON:YNGA) Young and Co's Brewery Plc is a United Kingdom-based alcoholic beverage and food retailing company. The company manages pubs in the country under three brand names Geronimo managed houses, Young's managed houses and Ram Pub Company. The company manages nearly 250 pubs in and around London and in the South East. The shares of the company have gained 3 per cent in value since the beginning of the year.

Revenues for the half-year ended 30 September 2019 came in at £168.2 million, up 7.3% year over year while profit before tax declined 6.4% to £24.7 million.

New IPOs which have been listed at the AIM market segment this year

Since the beginning of the year 2020 till 29 February 2020, the AIM market segment had got two IPOs listed on the market. One being INSPECS GROUP PLC and the other being THE BARKBY GROUP PLC. Both companies collectively raised £29 million in new money from the IPOs and have a combined market capitalization of £144.11 million as on the close of trade on 19 March 2020.

During the same period, the main market segment saw three new IPOs coming out, raising fresh capital. NIPPON ACTIVE VALUE FUND PLC, CALISEN PLC and PANTHER METALS PLC together raised £404 million of new money from the IPO issues. As on the close of trade on 19 March 2020 all the above three companies had a combined market capitalization of £ 824.91 million.