Small-cap IPOs are a little like London buses. You wait ages for one – and three turn up at the same time.
Last year was a washout for listings, both big and small, and 2023 has continued in that vein.
According to research from the professional services firm EY, the number of new companies joining AIM fell by 31% in the first half compared with the latter part of 2022.
The reason? Well, it’s what the professionals call a risk-off attitude to investing.
What this means is stock speculators have kept their hands firmly in their pockets against the backdrop of conflict in Ukraine, steepling inflation, and a series of interest rate hikes.
You have seen this in the secondary market too, where small- and micro-cap companies have struggled to tap into new sources of capital. The latest round of fundraisers has tended to be of the keep-the-lights-on variety of less than £1.5 million.
It’s rare in 2023 to see a company bring in more, although there have been exceptions, including Premier African Minerals (down 4% at 0.4p), which on Friday said it has found £4 million in new investment.
This, alongside the (completed and putative) IPOs Tan Delta Systems (up 6% at 27.6p), Tribe Technology and RTOP, suggest we may be seeing the green shoots of recovery in the growth sector.
AIM All-Share’s dog-day week
Turning to market for those small-caps already listed, the AIM All-Share was a perfect reflection of what happens during the dog days of summer in the Square Mile – absolutely nothing.
The index marked time at 734.05 points. It lagged the FTSE 100, which was up 1.35% at 7,360.42 in that time.
In the oil services sector, it was a big week for those sitting on shares in Plexus Holdings, which rose 72% to 6.625p over the trading week. The catalyst was a significant upgrade to the value of a contract for its POS-GRIP wellhead technology.
Moving sideways into the exploration sector, Orcadian Energy was up 30% at 4.25p after providing some respite in securing a repayment plan for a loan it has with Shell.
Up 50% at 4.5p, SEEEN was AIM’s second-biggest riser. Lighting the blue touchpaper under shares of the video content specialist was a director share purchase.
Making the risers list (with a gain of 17% to 7.45p) was Jubilee Metals after a positive update on its chrome joint venture in South Africa and the growth of its Roan Concentrator in Zambia.
Bears pull the lever on Fulcrum
Turning to the losers: It was a tough week to be a backer of Fulcrum Utility Services; the energy infrastructure group shed around three-quarters of its value (it’s down 73% at 0.225p).
The collapse coincided with news it would be cancelling its AIM listing subject to shareholder approval.
Arguing there are limited prospects of raising additional equity on the junior market, the group said trading volumes on the exchange have been too weak to justify the significant costs and regulatory burden associated with being a quoted company.
This departure underlines the rather sketchy ability of AIM to provide capital and/or liquidity for growth companies.
The light-touch market is anything but these days with listing numbers dwindling to just over 700 from more than double that figure in the heyday of the bourse.
Finally, Proactive was able to delve a little deeper into the recent update from BiVictriX Therapeutics, which is developing drugs that target cancer without the collateral damage and side effects of traditional treatments. This week it secured US patent protection of BVX001, its lead asset.
In conversation with Proactive’s Thomas Warner, chief executive Tiffany Thorn revealed there had been industry interest in BiVictriX’s cutting-edge technology.
This is important because small, aspiring life sciences companies often need the deep pockets and expertise of larger partners to fund and oversee large-scale clinical trials.
"We're continually generating positive data for our lead programme and the wider platform. We're constantly in contact with some of these interested parties," Thorn told Warner.
The stock closed the week at 15.1p, up 26%.