Interactive Investor

AIM’s best companies of 2023: shortlist revealed

Award-winning AIM writer Andrew Hore runs through the nominees for this year’s AIM Awards and has a guess at who’ll take home the prizes.

29th September 2023 15:04

by Andrew Hore from interactive investor

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The 2023 AIM Awards dinner will be held in London on 12 October and the shortlist for the awards has been announced (www.aim-awards.co.uk). There are four companies with three nominations each and six more with two nominations.

Here’s a rundown of the runners and riders.

Best investor communication

This is the first of three nominations for marketing services provider Next 15 Group (LSE:NFG), which needed to boost its investor relations after the failed bid for M&C Saatchi (LSE:SAA) and the share price decline. Although there was an initial recovery, the share price has fallen further even though trading has been resilient.

Automotive testing systems supplier AB Dynamics (LSE:ABDP)was the winner in 2020 and it has been on many other shortlists through the years. Franchised lettings firm Belvoir Group (LSE:BLV) was on the shortlist last year.

The Artisanal Spirits Company  (LSE:ART) has a growing number of international subscribers to the Scotch Whisky Society. The company has done well to educate investors on the value of the inventory of its whisky casks.

Smart Metering Systems (LSE:SMS)has a solid base of index-linked annualised recurring revenues, which has reached £110 million. Annual dividend growth continues at 10% a year. Transport optimisation software and service provider Tracsis (LSE:TRCS) has maintained a relatively high rating over the years because of its consistent performance.

My best guess: Smart Metering Systems

Best use of AIM

This is an award dominated by companies that have nominations in other categories. Audio visual distributor Midwich Group (LSE:MIDW)has used its AIM quotation to expand internationally via acquisitions, and it has more than doubled in size over seven years.

Components and battery systems supplier Solid State (LSE:SOLI) joined AIM on 26 June 1996 at 80p. There are not many companies left that have been on AIM longer. It has a good acquisitions record (see best transaction) and has grown from £5 million to £133 million.

SigmaRoc (LSE:SRC)started out as a shell with an experienced construction materials management team that acquired a Channel Islands-based aggregates businesses, then made further acquisitions in the UK and Europe.

YouGov (LSE:YOU) has been built up through organic growth, plus acquisitions (see best transaction).

CleanTech Lithium (LSE:CTL)has used the cash raised on AIM to develop its lithium projects in Chile and add to the JORC resource. A pre-feasibility study for the Laguna Verde project is due to be published in the coming months.

Team Internet Group (LSE:TIG), which was previously CentralNic, has used its quotation to initially build up the internet registrar operations and then to move into digital marketing, which is growing on the back of the ending of the use of cookies.

My best guess: Solid State

Best technology

Medical device company Creo Medical Group (LSE:CREO) develops surgical endoscopy products. Speedboat Inject is an advanced multimodal instrument for flexible endoscopy that can deliver advanced bipolar RF and microwave energy. It was recently CE marked for use in the gastrointestinal tract.

Eagle Eye Solutions Group (LSE:EYE)has developed technology to provide real-time digital coupons and loyalty products via Software-as-a-Service. Acquiring French company Untie Nots has enhanced its AI capabilities.

FD Technologies (LSE:FDP)is expected to grow annualised recurring revenues in 2023-24 by more than one-third. The growth is coming from KX software, which supplies financial modelling and data analysis software.

Ultrasound simulators developer Intelligent Ultrasound Group (LSE:IUG)is building up the revenues from its AI-based software. ScanNav AI has secured GE as a licensee. Revenues are still relatively small, but growth is accelerating.

IQGeo Group (LSE:IQG) has developed cloud-based software that helps telecoms and utilities companies to manage their infrastructure networks. It is winning international clients.

Oxford Metrics (LSE:OMG)has developed 3D motion capture technology under the Vicon brand. Valkyrie is the latest motion capture system, which has four camera models. It can track fast-moving subjects.

Sondrel (Holdings) (LSE:SND) is also nominated as best newcomer despite the recent profit warning from the semiconductor designer. It supplies application specific integrated circuits and systems on chips.

Best guess: Creo Medical

Woman drinking whisky

Diversity Champion

LBG Media Ordinary Shares (LSE:LBG) has one-fifth of its leadership from ethnic minorities, and women make up 29% of the board. Women make up more than than two-fifths of Learning Technologies Group (LSE:LTG) board.

Mind Gym Ordinary Shares (LSE:MIND) provides training for management that help to encourage inclusivity and it is investing in sustainability. Mortgage Advice Bureau (Holdings) (LSE:MAB1) has launched a green mortgage product, as well as providing enhanced leave for caregivers and well-being activities.  

Next 15 has worked to improve diversity and has a gender equal board. YouGov (LSE:YOU) promotes inclusivity for its market research panels and has launched a campaign to encourage employees to disclose diversity data.  

My best guess: MindGym

AIM transaction of the year

Franchise Brands (LSE:FRAN)made its largest ever acquisition when it paid £200 million for Pirtek Europe, which provides on-site hydraulic hose replacement and other services through service centres and mobile service vans. The business is being integrated into the group, which includes drainage businesses Metro Rod and Metro Plumb.

Transport security and information systems supplier Journeo (LSE:JNEO) acquired IGL Ltd, which supplies displays for rail passenger information, for £8.7 million. IGL provides additional scale for Journeo in the rail market.

Solid State has more than doubled the size of its battery power business by acquiring Custom Power for up to £36 million. The California-based battery pack and power technology business provides Solid State with a US base and enables growth in added value products and systems.

Marlowe (LSE:MRL)acquired ISO auditing and certificate services provider IMSM Holdings for £17.4 million. This broadens the governance, risk and compliance activities of the company and provides cross-selling opportunities.

Shield Therapeutics (LSE:STX)was nominated before its latest fundraising. This nomination relates to last December’s fundraising and collaborative sales agreement with Viatris for the US marketing of iron deficiency treatment Accrufer.

Market research firm YouGov raised £51.2 million at 920p/share to help finance the purchase of the consumer panel business of GfK for €315 million. The deal should enhance earnings by a mid-teens percentage in the first full year. GfK has consumer panels in 16 European countries that cover more than 100,000 households. The EU is forcing GfK to sell this business following the merger with NielsenIQ.  

My best guess: YouGov

AIM corporate governance

Builders’ merchant Lords Group Trading (LSE:LORD) is one of the better performers in its sector and it recognises the value of high standards of corporate governance.

Employee benefits and insurance provider Personal Group Holdings (LSE:PGH) believes that good governance should enhance performance and enable achievement of strategic aims. Insurance revenues are recovering.

Sanderson Design (LSE:SDG) continues to grow licensing revenues and North America has been a strong market, offsetting the weak UK market. It believes that corporate governance ensures that a company is managed effectively and good communication builds trust.  

Next 15, SigmaRoc and Smart Metering Systems are all nominated for other awards.

My best guess: Next 15

AIM growth business of the year

This is the first of three nominations for software provider Cerillion (LSE:CER) and electricals retailer Marks Electrical (LSE:MRK). Both companies have strong growth records.  

IQGeo is moving into profit this year and it will generate more than enough cash to cover capital investment. High operational gearing means that profit is set to grow rapidly after this year.

Food wholesaler Kitwave Group (LSE:KITW)has consistently outperformed expectations sparking multiple upgrades. Kitwave continued to trade strongly in the first half despite the tough economic conditions. Full-year figures could be slightly higher than expectations.

Despite the weak stock market, Tatton Asset Management (LSE:TAM) is still managing to grow its assets under management at a rapid rate. This is down to winning mandates from financial advisers. In the year to March 2023, Tatton Asset Management increased assets under management by 22% to £13.9 billion, even though market performance reduced the figure by £400 million. Net inflows averaged £148 million a month during the second half.

My best guess: Kitwave

Best newcomer

This is the shortest list, with four companies included. The meeting to draw up the shortlist was held on 13 September, which was just after semiconductors designer Sondrel warned that three projects have been delayed which knocked forecasts. It joined AIM on 21 October 2022 at 55p/share and the share price was trading at a premium before slumping to 16p since the end of August.

Coventry-based Aurrigo International (LSE:AURR)develops autonomous vehicles for automotive, aviation and transport sectors. Ground handling and cargo markets are the focus. It floated on 15 September 2022 at 48p/share and the share price has risen to 122.5p. Aurrigo has been gaining grant funding to finance development programmes.

Fadel Partners (LSE:FADL)was founded two decades ago by Tarek Fadel, and it has three main products. IPM Suite, which covers rights and royalty management for publishers; Brand Vision, a brand compliance and monitoring platform that was acquired in 2021; and PictureDesk, which helps with searches for images. The shares floated at 144p/share on 6 April 2023, and it has continued at around that price with limited trading.

Smarttech247 (LSE:S247) provides cybersecurity services via a combination of automation and human analysis. It raised money at 29.66p/share at the end of 2022 to finance new products and move into new international markets. The current share price is 32p.

My best guess: Aurrigo International

Entrepreneur of the year

Mo Khan of hVIVO (LSE:HVO) is one of two people on the list whose company has not received any other nominations. The contract research and infectious disease study services continues to win contracts for its study programmes, and it is moving into larger London premises in Canary Wharf.  The latest interim results have led to an upgrade of guidance for the full year, and hVIVO intends to pay a nominal dividend for 2023.

Euan Fraser stepped down as chief executive of Alpha Financial Markets (LSE:AFM)earlier this year, although he is still an adviser. He held the role for ten years, including the AIM flotation in October 2017.

Stephen Fenby of Midwich is the driving force behind the acquisition strategy of the company.

Louis Hall has been chief executive of Cerillion since before its flotation. He has guided the telecoms software supplier to a point where it is winning bigger and bigger contracts.

Philip Meeson is stepping down as executive chairman of airline and tour operator Jet2 (LSE:JET2) after running the business for four decades. Over that period, Jet2 has become a significant budget airline operator.

Mark Smithson is the founder of Marks Electrical and it has grown consistently before and after joining AIM. He has placed emphasis on service in order to win market share.

My best guess: Philip Meeson, Jet 2

AIM company of the year

Alpha Group International (LSE:ALPH)is planning to move to a premium listing having joined AIM in 2017 as Alpha FX. The foreign exchange and financial services provider increased its pre-tax profit by more than ten times between 2016 and 2022, and the market capitalisation has jumped from £81.9 million to £849 million.  

Since the March 2016 flotation, the Cerillion share price has risen from 76p to £13.30. It is trading on a prospective multiple of 33 because of the strong and consistent track record.

Jet2 is one of the largest companies on AIM and it is making a strong recovery following the problems of Covid lockdowns. Having raised money to get through the lockdowns, Jet2 is back to generating cash.

Marks Electrical continues to take market share in electrical appliances and is broadening the range of products it offers.

NIOX Group (LSE:NIOX)was previously known as Circassia Pharmaceuticals. The share price has been steadily recovering since February 2019 when the asthma diagnosis company moved from the Main Market. The company moved into profit last year.

Renew Holdings (LSE:RNWH)is the safe bet among the shortlist because it provides essential engineering services for utilities and infrastructure. The business is growing steadily because the spending does not fluctuate like capital spending does.  

My best guess: Cerillion

Andrew Hore is a freelance contributor and not a direct employee of interactive investor.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. 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.

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