With the 2019 AIM awards fast approaching, our award-winning AIM writer guesses the winners.
The 2019 AIM awards shortlist has been published. There are plenty of great companies and individuals to pick from, but also some notable absentees.
This year, the awards will be held in London on 10th October and the full shortlist is available here.
Some of the shortlists are much longer than in the past, making it more difficult to squeeze everyone in. The entrepreneur of the year award has a shortlist of seven candidates. However, there are some companies that are included in more than one list. It is noticeable that Fevertree Drinks (LSE:FEVR) is not on any shortlist this year.
Best investor communication
Last year's winner, healthcare IT systems supplier EMIS Group (LSE:EMIS), is back on the shortlist. Gift wrap supplier IG Design (LSE:IGR) is also on the shortlist again, so it appears to be a favourite among the judging panel. In the past IG Design has won AIM awards, including AIM company of the year.
Residential property developer Telford Homes (LSE:TEF) is also back on the shortlist, but it will soon leave AIM following a takeover.
Branded ceramic products supplier Portmeirion (LSE:PMP) has a good track record, but its interims were disappointing, and the full-year profit figure will be flat. Video games services provider Sumo (LSE:SUMO) floated less than two years ago, and it was on last year's best newcomer list. It continues to grow strongly.
North Sea-focused oil and gas company Hurricane Energy (LSE:HUR) recorded its maiden revenues of $22.5 million in the first half of 2019, with more to come in the second half. It has had to manage good and bad news over the past year.
Best guess: Hurricane Energy
Best Use of AIM
AB Dynamics (LSE:ABDP) appears the big favourite of the judges with the awards where it is eligible. The automotive testing services and equipment supplier won the global achievement award in 2018, but this is not an award that is included this year.
AB Dynamics is a supplier to the top 25 global vehicle manufacturers, and it has expanded its exposure in the US through the acquisition of California-based Dynamic Research Inc. The success of the group is recognised in the rating which, even after the recent decline in the share price, is still more than 30 times for the year to August 2020.
Medical device company Creo Medical (LSE:CREO) floated nearly three years ago. The first commercial orders for its Speedboat device have been received from the US. Speedboat helps to reduce the risk of laparoscopic and other surgical procedures. This is part of the CROMA electrosurgical advanced energy platform that enables precise localised cutting and controlled coagulation in surgical procedures.
Since moving from Plus/NEX, compliance software provider Ideagen (LSE:IDEA) has grown through a combination of acquisition and organic growth. Recurring revenues are two-thirds of the total. Scientific Digital Imaging (LSE:SDI) has used its quotation to make a series of scientific instrument business acquisitions.
Learning Technologies (LSE:LTG) has done something similar to these two companies but on a much larger scale. Learning Technologies was valued at around £25 million when Epic reversed into In-Deed Online six years ago. It has become one of the top 25 companies on AIM by market capitalisation and full-year pre-tax profit will be well in excess of its starting valuation.
Best guess: Learning Technologies
AB Dynamics pops up yet again on this list, as does Creo Medical. Software company First Derivatives (LSE:FDP), which won the award last year, is the only other non-health related company on the list.
Angle (LSE:AGL) is making progress towards FDA approval of its Parsortix liquid biopsy diagnostic test for breast cancer. There are uses for the technology in a range of cancers with one ongoing study relating to ovarian cancer. Oncimmune (LSE:ONC) has developed a test called EarlyCDT Lung that tests for the antibodies specific to lung cancer. Studies have shown its effectiveness at reducing the number of patients with late-stage cancer.
Kidney-focused artificial intelligence- enabled diagnostics developer Renalytix AI (LSE:RENX) was spun out of EKF Diagnostics – see AIM transaction of the year below – and gained FDA breakthrough device designation in May 2019 for KidneyIntelX, the in vitro diagnostic product for the identification of fast progressing kidney disease.
Best guess: Renalytix AI
AIM Transaction of the Year
Social care services provider CareTech Holdings (LSE:CTH) acquired fully listed rival Cambian for £372 million in cash and shares during the period, and the integration is going well, with the margins of the acquired business already improving.
Internet domain names registrar and retailer CentralNic (LSE:CNIC) has made more than one acquisition over the past 15 months, but it appears that the purchase of KeyGlobe, which was made right at the beginning of the judging period, is the one identified. This deal improved the quality of earnings by boosting the recurring revenues.
GB Group (LSE:GBG) acquired IDology Inc for $301 million (£233 million) earlier this year, and this boosts the identity verification technology provider's US presence. IG Design's earnings enhancing takeover of US rival Impact Innovations created the world's largest consumer gift packaging business.
Serica Energy (LSE:SQZ) acquired interests in the Bruce, Keith and Rhum fields in the North Sea for less than their asset value.
EKF Diagnostics spun off Renalytix AI in November 2018 and this has proved a big success enabling Renalytix AI to raise further cash to finance product development and growth.
Best guess: CareTech
AIM Growth Business of the Year
Communications services provider Gamma Communications (LSE:GAMA) was the AIM company of the year in 2018 and this is the only shortlist it is on this year.
AB Dynamics is on this list, as are Boohoo (LSE:BOO), patent translation services provider RWS Holdings (LSE:RWS) and market research firm YouGov (LSE:YOU), which are all on the company of the year shortlist. The other company on the list is video games services provider Sumo, which is the only one that has been quoted for less than four years.
Online fashion retailer Boohoo has bucked the trend of the retail world, when rivals such as ASOS (LSE:ASC) have run into problems, some of which are of its own making. The growth of the core Boohoo brand has been added to by acquisitions of other brands and forecast upgrades have become a habit. Interim revenues increased 43% to £565 million, while pre-tax profit was 45% ahead at £51.8 million.
There is more than £200 million of cash in the bank, even after investing in warehouse facilities. The acquisition of the Karen Millen brand could further boost growth.
Best guess: Boohoo
Innovative Fundraising of the Year
No sign of Burford Capital (LSE:BUR) on the shortlist this year, even though it has won the award every year since it was launched two years ago. This is a difficult one to predict with no real stand out.
Mkango Resources (LSE:MKA) received a £7 million investment from Talaxis to fund the completion of the feasibility study for Songwe Hill rare earths project in Malawi. This should be completed in 2020.
Renalytix AI is on this list for the demerger from EKF and subsequent financing. Crossword Cybersecurity (LSE:CCS) raised £2 million via a placing and subscription when it joined AIM in December 2018.
Scientific Digital Imaging used PrimaryBid to raise £100,000 out of a total fundraising of £2.57 million and Futura Medical (LSE:FUM) used PrimaryBid to help it to raise £5.6 million.
One Media iP (LSE:OMIP) raised up to £6 million from an unsecured 7% loan note issue provided by the Business Growth Fund. The initial draw down was £1.9 million. This cash is being used to finance the acquisition of music catalogues that generate steady incomes.
Best guess: One Media IP
RenalytixAI is on yet another shortlist (see best technology).
Crossword Cybersecurity made the jump from NEX to AIM, but it is small compared with the other candidates. The share price performance has been impressive, but a lack of liquidity may have been part of the reason.
Northern Ireland-based Diaceutics (LSE:DXRX) uses its data analysis and advisory services to make the development of precision medicines and their related diagnostic tests, more efficient and help pharma companies achieve a better return. There is an enormous potential market. The shares went to a premium to the 76p placing price – mainly because of a lack of liquidity – and they have maintained most of that initial rise.
Essensys is a developer of Software-as-a-Service and cloud services for the flexible workspace sector. The share price soared from the placing price of 155p in the first few days of trading and has subsequently fallen back to nearer the float price.
Bristol-based Loungers (LSE:LGRS) operates 146 café/bar/restaurants in England and Wales under the Lounges and Cosy Club brands. The share price went to a small premium to the 200p placing price, but it has fallen back to the placing price.
Insolvency litigation funder Manolete Partners (LSE:MANO) floated at 175p last December and the share price is nearly three times that level. There is a strong pipeline of new cases according to the AGM statement.
Best guess: Diaceutics
Entrepreneur of the Year
AB Dynamics founder Anthony Best is on this shortlist. He is still involved with the business, although he has given up a lot of his executive duties. He retains a 26.6% stake in the company.
Debbie Bestwick of Team17 (LSE:TM17) is back on the list for the second year running. Team17 is a fast growing and highly cash generative developer of video games.
Sam Smith of finnCap (LSE:FCAP) is also on the list following last year's flotation of the broker following the merger with M&A adviser Cavendish. This has enabled finnCap to offer a Dual Track service, where a company can run an IPO and sale process together before deciding which avenue to follow.
David Beech of lawyers Knights (LSE:KGH) is the newest AIM boss on the list. In 15 months as an AIM business, Knights has made three acquisitions in line with its strategy of building up its operations in secondary markets outside of the big cities.
Keywords Studios (LSE:KWS) has lost some of its premium rating over the past year, but it is still highly rated and boss Andrew Day is up for this award. He has steered the video games consolidator to the top 20 AIM companies by value through consistently earning enhancing acquisitions.
David Braben has made sure that video games developer Frontier Developments (LSE:FDEV) is no longer dependent on one or two games and it is developing and publishing its own games.
Tim Dyson has built up the international operations of Next Fifteen Communications (LSE:NFC) and made it less dependent on a limited number of large technology clients.
Best guess: Debbie Bestwick
Company of the Year
None of the companies were on last year's company of the year shortlist. The judges tend to go for companies with good track records. Floorcoverings supplier James Halstead (LSE:JHD) is certainly that. It is the only one not on any other list. Market research firm YouGov (LSE:YOU), RWS Holdings (LSE:RWS) and identification services provider GB Group (LSE:GBG) all crop up again on this shortlist.
The frontrunners appear to be boohoo and AB Dynamics, with the latter likely to win.
Best guess: AB Dynamics
Andrew Hore is a freelance contributor and not a direct employee of interactive investor.
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