The AIM All-Share is up 14% since hitting a near-12-month low towards the end of last month, recovering sharply after an initial sell-off triggered by the outbreak of hostilities involving Iran and subsequent turmoil in the Strait of Hormuz.
It has outperformed the FTSE 100, up 5% over the same period, by some distance. But the trajectories of the two benchmarks could scarcely be more different.
The bombings and blockades knocked the blue-chip index from its all-time high. AIM, by contrast, had bounced back from a near-record low.
The reasons for AIM's ills have been rehearsed in this column over recent months and years. The catalyst for the junior market's long slump was Russia's invasion of Ukraine in 2022, which effectively turned off the cash spigots, leaving growth companies facing an uncertain future.
Some drew down the shutters for good. Others left AIM for the private markets, where, perversely, the funding wells run deeper. A hardy few soldiered on, leaving 615 constituents on the index today (there were close to 1,700 at AIM's peak in 2007).
Based on admittedly ad hoc research, the cash taps appear to be flowing through this conflict in a way they were not when Putin sent the tanks over the border four years ago.
Using share placings as a proxy, ten have completed since the start of April. Counting back to the outbreak of the Iran conflict on February 28, there have been around 30 investment rounds, some oversubscribed, including a bumper £10 million raise by neuroimaging specialist IXICO and a £16 million by SRT Marine.
Whether this reflects a hardening among small-cap investors to geopolitical risk, or simply the bargain-basement valuations now on offer, remains to be seen.
Mirriad's existence threatened
With the AIM All Share down 1.5% over the week, it seems appropriate to start with the biggest faller, Mirriad Advertising, which collapsed 80% to the almost inconceivably small price 0.0008p after warning it could enter administration or liquidation if emergency funding is not secured. The in-content advertising group said trading deteriorated sharply following Middle East tensions, hitting a key market during a peak period, while expansion elsewhere has been too slow. With just £675,000 of cash at the end of March and no funding agreed, directors said an orderly wind-down may be required.
Mercantile Ports & Logistics gave back the previous week’s gains, plunging 75% as a dispute over its Karanja terminal in Mumbai intensified. The company said India’s formal insolvency process had rejected its proposal to repay debts in full and instead backed a rival plan from billionaire-backed Adani Ports. Management slammed the process as “biased” and “stage-managed”, and said it will pursue legal action.
Chairman Jeremy Warner Allen said the company will raise concerns with the UK, US and Indian governments "on how investors from their respective countries are being cheated". He said the situation should be addressed "so that it does not undermine the credibility" of the recent UK-India trade deal.
Funds available
Elsewhere, as mentioned, a string of fundraisings highlighted that capital remains available to small caps, though often a discount is required.
Ondo InsurTech dropped sharply after abruptly saying it needed short-term funding, despite reporting 19% revenue growth and strong expansion in the US. Delays to partner orders have squeezed cash, with the group ending March with £1.1 million and now exploring financing options.
More expected, ATOME shares were still returned to where they were two weeks earlier as it raised the final £25.6 million to complete the funding of its flagship Villeta fertiliser project in Paraguay, allowing final investment decision to be reached as the full financing package was secured.
Arc Minerals slipped 12% as it raised £3 million for copper exploration in Botswana, Firering Strategic Minerals bagged £2.5 million raise to increase its stake in a quicklime project in Zambia, and Quantum Data Energy dropped as it launched a £1 million fundraising to support its power assets.
Newly listed Rift Helium made a positive start, trading about 10% above its IPO price on its first day, after raising £8.1 million to develop assets in Tanzania’s Rukwa Basin. Fundraising proceeds will be deployed in work including an environmental impact assessment, 3D seismic and some drilling.
Chief executive Charlie FitzRoy said the company is entering the market against a "highly favourable backdrop," citing recent supply disruption in Qatar, and described the company’s approach as having "third-mover” advantage, applying lessons from earlier entrants to the region to target helium accumulations more efficiently.
As we get deeper into reporting season, LBG Media fell 26% despite the LadBible owner posting first-half numbers showing 19% revenue growth. However, underlying earnings fell by 34% to £8 million as margins were hit by investment and a shift towards lower-margin direct revenues, alongside ongoing weakness in referral traffic linked to changes in Meta’s Facebook algorithm.
Contract wins and bids
Among the risers, Diales advanced 12% after saying first-half operating profit is set to jump 43%, supported by higher revenue and a stronger cash position.
Active Energy Group also had a strong week, climbing 39% on a flurry of updates. The company said its Ghummud site in the UAE has been energised ahead of schedule, potentially accelerating revenue, and later agreed heads of terms for another grid connection in Taweela. A further tie-up with Bitdeer to develop a digital asset mining platform added to momentum.
The biggest surge was seen as North Sea explorer Deltic Energy, up 122% after confirming it has received separate takeover approaches from three parties, including Capricorn Energy and Petrogas. The company is now in an offer period, with bidders required to clarify their intentions by late May. The move also revives interest after a previous recommended bid from RockRose Energy was abandoned in March.
Elsewhere in the energy sector, Kistos rose 22% on higher production and progress on its Oman acquisition, which is expected to add scale and diversification.
In other deal news, Advanced Medical Solutions Group shares rose 12% after it confirmed talks are being held with US private equity firm TA Associates about a possible offer.
And finally, hVIVO shares have risen more than 30% in the year to date, though some investors used a dose of very good news earlier this week as a profit-taking opportunity, top-slicing their holdings rather than chasing the stock higher.
The trigger was a contract to run the world's first pivotal phase III human challenge trial for a whooping cough vaccine, which broker Cavendish described as a landmark moment for the broader human challenge trial sector.
Cavendish said the deal with US biotech ILiAD Biotechnologies could encourage other drug developers to adopt similar trial designs.
The broker values the stock at 16.5p, almost double the current price.