Interactive Investor

Best AIM companies of 2020 confirmed

4th December 2020 15:40

Andrew Hore from interactive investor

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There was no fancy award ceremony this year, but we do now know which AIM stars won the gongs.

This year the winners of the AIM awards have been announced online, rather than at the usual dinner. No company won more than one award this time. I managed to get four of the award winners correct in my article about the shortlist for the AIM awards. Here are all the winners. 

Best communication

This year: AB Dynamics (LSE:ABDP)

Last Year: EMIS (LSE:EMIS)

AB Dynamics  has been a favourite of the awards jury for many years, so I thought that it had a good chance of winning this award. The automotive testing services and equipment supplier has a good track record and has invested in increasing its capacity. 

Management has a history of keeping investors well informed about the progress of the business. 

Covid-19 did hamper progress in the second half. Manufacturing facilities continued to operate, while office personnel have been working from home. Track testing activities were suspended during the original lockdown. In the year to August 2020, revenues were 6% ahead at £61.5 million and pre-tax profit dipped 16% to £10.9 million. Order patterns are still difficult to predict. Cash of £31 million provides a buffer for any uncertainty and the funds to continue capital investment. 

Best Performing share

This year: Novacyt (LSE:NCYT) 

Last Year: Bidstack (LSE:BIDS)

It is no real surprise that Novacyt was the best performing share given the substantial boost it has received from the Covid-19 pandemic. Sales have multiplied in a short period of time thanks to its Covid-19 tests. 

The time period for the performance is from August 2019 to the end of July 2020. The share price was nowhere near its high at that point. It subsequently quadrupled at one point and it is still more than double the level at the end of July. 

Best technology

This year: MaxCyte (LSE:MXCT) 

Last Year: Creo Medical (LSE:CREO)

MaxCyte won this award in 2016, which was the year it floated on AIM. The cell engineering services provider raised a further $30.5 million earlier this year and it is planning to list on Nasdaq. CAMRA Cell Therapies has been set up as a separate subsidiary so that it can be developed as an independent therapeutics company, while MaxCyte focuses on the core cell engineering operations.  

Interim revenues were 30% ahead at $10.9 million and full-year revenues are likely to be ahead of expectations. Three new licences have been signed with cell therapy developers this year. The pre-commercial milestone payments from all the company’s licence deals are worth more than $800 million. 

AIM transaction of the year

This year: Inspiration Healthcare (LSE:IHC)

Last Year: EKF Diagnostics (LSE:EKF) / Renalytix AI (LSE:RENX)

Inspiration Healthcare paid £18 million for SLE in July. SLE is a designer and manufacturer of ventilators for neonatal intensive care and it fits well with the existing group products. There are cross-selling opportunities from the deal, which should be earnings enhancing in the medium-term. 

Inspiration declared a maiden interim dividend with its figures for the six months to July 2020. The 0.2p a share payment is intended to be one-third of the total payment for the year. Revenues were 77% ahead at £14.2 million, helped by the acquisition in the final month of the period. There was a one-off boost to sales due to NHS demand for adult ventilators and this continued into the second half. Underlying pre-tax profit improved from £558,000 to £2.11 million. 

Best use of AIM 

This year: Learning Technologies (LSE:LTG) 

Last Year: Ideagen (LSE:IDEA)

Learning Technologies has been transformed from a shell company in 2013 into a major international training and elearning company. The market capitalisation has gone from £45 million to £1.1 billion. This indicates how well it has used its AIM quotation and that is why I thought that it had a good chance of winning the award. 

Learning Technologies has grown internationally through acquisitions and the majority of revenues are generated in the US. Recurring revenues account for more than two-thirds of total revenues. The latest acquisition is Australia-based learning management systems supplier eCreations for an initial £3.1 million in cash, with up to £3.7 million more payable depending on performance.

A full year pre-tax profit of £37.5 million is forecast.

AIM corporate governance

This year: Hotel Chocolat (LSE:HOTC) 

This is the first year that this award has been included. Chocolate maker and retailer Hotel Chocolat is a strong brand. It has high ethical standards in its dealings with cocoa farmers and it plans to make all its packaging recyclable or reusable. 

In the year to June 2020, Hotel Chocolat made an underlying pre-tax profit of £2.4 million, down from £14.1 million, on revenues 3% ahead at £136 million. Second half revenues fell by 14% - reflecting disruption to Easter trading. There is growth in online sales, and they will remain more important than in the past. 

AIM growth business of the year

This year: Tristel (LSE:TSTL) 

Last Year: YouGov (LSE:YOU)

My guess that Tristel would be the winner proved correct. This award reflects the long-term performance of the disinfection products supplier as well as its progress in the past year. It has been a strong cash generator and dividend payer for many years. 

Tristel was valued at around £9 million when it joined AIM in 2005 and it is currently worth around £230 million. Unlike many other companies where there has been a large increase in their market capitalisation this growth has only been modestly helped by acquisitions. Total dividend payments have exceeded the original placing price. 

Full-year figures from Tristel were slightly better than expected. Revenues were 21% higher at £31.7 million and there was a 27% rise in underlying pre-tax profit to £7.1 million. Overseas revenues were nearly one-third higher and there is still significant potential internationally. Management is investing in the North American business ahead of potential news about FDA approval of its products.

Best newcomer

This year: FRP Advisory (LSE:FRP) 
Last Year: Loungers (LSE:LGRS)

Professional services provider FRP Advisory joined AIM on 6 March just as the market was slumping. The share price did initially dip below the 80p placing price before recovering sharply in April. The business was previously the business recovery division of former AIM-quoted accountant Vantis and management acquired it when Vantis went bust in 2010. 

Two acquisitions have been made since the flotation. Business recovery practice Abbott Fielding gives the business a Kent base and corporate finance and forensic services provider JDC provides an office in Norwich. 

Interim revenues were 14% ahead at £35.9 million even though formal insolvency appointments have reduced during the period. FRP has been appointed as administrator for retailer Edinburgh Woollen Mill. 

Entrepreneur of the year

This year: Debbie Bestwick, Team17 (LSE:TM17)

Last Year: Anthony Best, AB Dynamics (LSE:ABDP)

I thought that it would be third time lucky for Debbie Bestwick. Video games label and developer Team17 floated in May 2018 at 165p a share and the price has soared to 812p. That values the company at nearly £1.1 billion. 

Debbie Bestwick has been involved in the video games industry for more than three decades and is one of the founders of Team17. She became joint chief executive in 2009 and then the sole boss the following year ahead of a management buyout. The company’s Worms game franchise is 25 years old. 

In common with other video games companies Team17 has performed strongly due to additional games playing during Covid-19 lockdowns. Interim revenues were 28% higher at £38.8 million and pre-tax profit increased by the same percentage to £13.3 million. Three new games are set to be launched in the second half and there is a pipeline of ten future releases. 

AIM company of the year

This year: GB Group (LSE:GBG)

Last Year: RWS (LSE:RWS)

Identity and data intelligence services provider GB Group was originally on the Main Market and moved to AIM in August 2010. At that time, GB Group was capitalised at £22 million. Last year’s underlying pre-tax profit was £45.7 million. A combination of organic and acquisitive growth has propelled the company to a value of around £1.7 billion and into the top 10 AIM companies by market capitalisation. 

First-half trading was better than expected with revenues 9% ahead at £103 million, although this was boosted by a one-off contract. New business is being delayed by the effects of Covid-19, so full year pre-tax profit may be slightly lower. Even so, the long-term prospects due to greater levels of online trading and the need to combat cyber criminals remain strong. 

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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