Best AIM companies of 2018 named here

by from interactive investor |

With only weeks to go until the 2018 AIM awards, former AIM writer of the year Andrew Hore reveals who he thinks will walk off with the gongs this time.  

There is less than a fortnight to the 2018 AIM awards and the shortlist has been published. This year the awards will be held in London on 11th October and the shortlist is available here.

Best investor communication

Healthcare IT supplier EMIS has had to cope with problems with service levels for some of its business. Management is on the way to sorting out the problems and it is noticeable that the share price has bounced back in recent months.

Residential property developer Telford Homes regularly organises site visits for analysts and others. That has helped it raise cash through placings in order to grow the business. 

Lettings agency Belvoir Lettings has added further franchise brands since flotation. Belvoir attempted to merge with rival The Property Franchise Group but it was rebuffed. There is organic growth of franchise fees, supplemented by the acquisition of Brooks, which secures finance for clients.

Gift wrap supplier IG Design was on the shortlist last year but lost out to Touchstone Innovations. The former AIM star has recovered investor confidence thanks to a return to growth and just after the relevant period it acquired US rival Impact. 

Best guess: IG Design

Best use of AIM

This is one of three awards where Diversified Gas & Oil is on the shortlist. Diversified has acquired groups of oil and gas assets in the Appalachia region of the US. These have been financed by four placings each one of which has been achieved at a higher share price. 

Three years ago, Gateley was the first lawyer to float on AIM. Acquisitions have boosted specialist operations and broadened the scope of the business. 

Keywords Studios has an impressive record as a consolidator in the video games services sector and the share price continues to defy gravity because it has not made any major mistakes despite the rapid rate of acquisitions. Keywords could have won this award in any year it has been quoted. 

Cosmetics supplier Warpaint London is also up for the best transaction award (see below). It has grown organically and via acquisition following its flotation.

Best guess: Keywords Studios

Global achievement award

Automotive testing systems supplier AB Dynamics has grown its capacity by moving into new premises and there is a strong order book. This is a truly international business and a new subsidiary has been set up in Germany.

Software robotics company Blue Prism has gone from strength to strength and it is growing strongly in North America. At the beginning of this year, cash was raised to finance further growth and partnerships with other technology companies are helping Blue Prism, which is capitalised at more than £1bn, grow internationally. 

Mixer drinks supplier Fevertree Drinks has been a regular on the awards shortlists since joining AIM and revenues and profit are continuing to grow at an impressive rate, although they need to, considering the high rating. 

Software provider and consultancy First Derivatives is a regular on various shortlists, but it does not tend to win very often. It is one of the best performing AIM companies in terms of share price. More than two-thirds of revenues come from outside the UK.

Best guess: Blue Prism

Best technology

Direct carrier billing company Boku Inc is the newest AIM entrant on the list and is also in the running for newcomer of the year. Boku appears on course to move into profit this year. Boku processed $1.5 billion worth of transactions in the first half. 

Software supplier First Derivatives is on the shortlist for the second year running and it is also in the running for the global achievement award (see above). 

Identity verification services provider GB Group was the winner of the best use of AIM award last year. The range of identification services has been widened through acquisition since moving from the Main Market and one-third of revenues are from international markets.

The investment in technology development by film and video localisation and dubbing services provider Zoo Digital is paying off. The ability to offer cloud-based services is helping the business to grow and move into profit. Hollywood studios have been customers for many years and newer customers, such as Netflix, are increasing the size of the market.

Best guess: Zoo Digital

AIM transaction of the year

Diversified Gas & Oil paid $575 million for further oil and gas producing assets in the Appalachia basin and this enhanced earnings as well as enabling a significant increase in dividend. The dividend policy is to pay 40% of excess cash flow as dividend and that cash flow should double after the acquisition, whereas the number of shares will rise by two-fifths. 

RWS spent $320 million on Moravia, which provides technology-enabled localisation services, and this provided a separate leg to the business and made it less dependent on the patents sector. 

Fresh produce supplier Total Produce acquired a 45% stake in Dole Food Company for $300 million in cash. Dole is one of the largest fresh produce suppliers in the world and this has broadened the international scope of the business. The deal "is expected to generate low double digit adjusted earnings per share accretion" in the first full year after completion (2019). 

Cosmetics supplier Warpaint London is also up for best use of AIM and it acquired Retra, which owns the Technic, Body Collection and Man's Stuff brands. This was immediately earnings enhancing. 

Best guess: RWS

AIM growth business of the year

Healthcare revenues software provider Craneware gets all its revenues from the US even though it is based in Scotland. Craneware has consistently increased its revenues and profit and the order book continues to grow as the US market moves towards value-based care models. 

Dart Group is also on the company of the year list (see below). 

Last year's company of the year Fevertree Drinks is on the shortlist for the third year running, having won the award in its first year. 

RWS was on the company of the year shortlist last year. The patent translation services provider is also up for transaction of the year (see above). 

Best guess: Fevertree

Innovative fundraising of the year

This is the second year in a row that litigation funding provider Burford Capital has been on the shortlist and it won the inaugural award last year. In January Burford raised $180 million from an oversubscribed 6.125% US$ bond 2025 issue that was closed early. The bonds are traded on the London Stock Exchange order book for bonds. This appears the best fit for the award but being the holder could make Burford less likely to win.

Diversified Gas & Oil raised $250 million via a placing at 97p a share and it also secured an enlarged $1 billion credit facility in order to finance a $575 million acquisition of oil and gas assets.

Back in November, graphene technology developer Versarien wanted to raise £1.2 million at 18p a share, which was a 21% discount to the market price. There was an offer via PrimaryBid.com and this was so successful that a total of £2.9 million was raised.

Telecoms services provider AdEPT Telecom raised £7.3 million from the Business Growth Fund via a convertible loan with a conversion price of 393p a share. The current share price is not far from that level.

Best guess: Burford Capital

Best newcomer

There are six companies on the shortlist for this award. Boku Inc is also up for best technology and its share price has trebled since flotation, while Team17 boss Debbie Bestwick is on the entrepreneur of the year shortlist.

Sumo Group, which provides creative services to the video games sector, appears to have floated on the back of the success of video games services consolidator Keywords and that certainly meant that it achieved a high rating. It is the second best performer on the list with a 60% increase since flotation.

Subsea cable protective coatings provider Tekmar joined AIM in June and has already made its first acquisition. Tekmar moved into the offshore wind turbines market in 2009 and its TekLink CPS product has a 74% market share in the offshore wind farm market in Europe.

Rosenblatt is one of the latest constituents of the growing legal sector on AIM and the placing funds are being used to set up a litigation funding subsidiary.

Scotland-based residential property developer Springfield Properties has a good growth record and a large land bank to ensure future growth. 

Best guess: Boku

Entrepreneur of the year

Debbie Bestwick of Team17 is the newest boss to AIM, but she is a founder of the computer games developer and has been its chief executive for approaching a decade.

Christopher Bogart and Jonathan Molot of Burford Capital are not on the company's board. Bogart is chief executive and Molot is chief investment officer.

Brian Conlon founded First Derivatives in 1996 and it is now capitalised at more than £1 billion.

Philip Meeson is executive chairman of Dart and he was behind the original flotation on USM. The company has been on AIM since 2005. 

Best guess: Philip Meeson, Dart

AIM company of the year

None of this year's shortlist was on the list last year, although online retailer of life science research tools Abcam is a previous winner. Abcam failed in its attempt to acquire fellow AIM company Horizon Discovery, but it is still growing rapidly. In fewer than two decades, Abcam has become valued at £3 billion.

Airline operator, leisure and logistics business Dart Group is one of the strongest long-term performers on AIM. It operates the Jet2.com airline and has distribution and logistics activities. The main growth has come from the airline and related travel activities.

Ticketing and queueing technology provider accesso Technology was on last year's best use of AIM shortlist and in the past decade it is one of the best performing AIM shares. The original focus was leisure and theme parks and it is entering the healthcare sector. 

Communications services provider Gamma Communications floated on AIM four years ago. Gamma was already a significant business when it joined the junior market. Gamma has grown by offering new products and good service. Andrew Taylor recently took over as chief executive from Bob Falconer.

Best guess: accesso Technology

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

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