Interactive Investor

Best AIM companies of 2023 confirmed

There are lots of excellent businesses on the AIM market and 10 of them were recognised at the recent AIM Awards. Award-winning AIM writer Andrew Hore reveals the companies that walked away with prizes.  

16th October 2023 11:09

by Andrew Hore from interactive investor

Share on

award win trophy prize 600

The AIM Awards winners were announced on Thursday night. The awards were all won by different companies, and I managed to guess three of the winners in my previous article.

The winners were:

Best investor communication

This year: Belvoir Group (LSE:BLV)

Last year: NWF Group (LSE:NWF)

Having been on the shortlist last year, it is second time lucky for franchised lettings and estate agency company Belvoir. Even though the house buying market is weak, the move into financial services along with continued growth in lettings has meant that profitability has been sustained. The share price has significantly outperformed AIM this year.

Belvoir did well in the first half of 2023 thanks to an improved contribution from lettings, offsetting a decline in estate agency income. Underlying pre-tax profit improved from £4.6 million to £5.1 million, but the second-half profit is likely to be lower than the second half of 2022.

Full-year pre-tax profit could be flat at around £10 million, and a higher tax charge will reduce earnings. The dividend is likely to be raised and the forecast yield is 5%.

Best use of AIM

This year: SigmaRoc (LSE:SRC)

Last year: Marlowe (LSE:MRL)

Building materials supplier SigmaRoc has been trading in its current form since the beginning of 2017 when the first building materials acquisition was made by the cash shell. The opening market capitalisation was £43.6 million, and it is currently valued at £362 million, even though the share price has declined in recent months.

Acquisitions were initially in the UK and the Channel Islands, but more recently European purchases have been made, particularly in Belgium and Scandinavia. The management team has decades of experience in larger building materials companies.

Full-year pre-tax profit is forecast to improve from £62.7 million to £65.1 million. Net debt is expected to be around £150 million and then fall to nearer £100 million next year due to strong cash flow. The prospective multiple is seven.

Best technology

This year: Oxford Metrics (LSE:OMG)

Last year: Neometals Ltd (LSE:NMT)

Oxford Metrics has been on AIM since April 2001. Vicon has always been the core business with other technology developed and sold off. Vicon is 3D motion capture technology and there are customers in the entertainment, life science and engineering markets. Location-based entertainment, such as virtual reality games, is a newer market which is still building up revenues.

Valkyrie is the latest motion capture system developed by Oxford Metrics and it has four camera models. It can track fast-moving subjects.

Oxford Metrics grew interim revenues by 70% to £21.3 million. The interim pre-tax profit was £4.1 million, up from £300,000. Following the sale of infrastructure tracking technology business Yotta, there is £63.6 million of cash in the bank available to make acquisitions and the cash pile should continue to rise until a deal is done.

Diversity champion award

This year: LBG Media Ordinary Shares (LSE:LBG)

Last year: Bango (LSE:BGO)

This award is designed for a company that advocates equality and inclusion. LBG Media has one-fifth of its leadership from ethnic minorities and women make up 29% of the board. LGBTQ+ representation is 13% and disability representation is 12%. Pre-tax profit is expected to improve to £16.9 million.

travel tech check-in airport 600

AIM transaction of the year

This year: Journeo (LSE:JNEO)

Last year: Mortgage Advice Bureau (Holdings) (LSE:MAB1)

At the end of 2022, transport security and information systems supplier Journeo acquired IGL Ltd, also known as Infotec, which supplies displays for rail passenger information, for £8.7 million. IGL provides additional scale for Journeo in the rail market. IGL has won an $18 million contract to supply displays for New York subway trains.

Journeo already had a significant market share in the bus and coach market. Combining the two businesses should help to reduce purchasing costs.

Interim revenues increased by 146% to £21.8 million and pre-tax profit jumped to £1.7 million following the inclusion of IGL for the full period. Cavendish forecasts that full year pre-tax profit will increase from £1 million to £3.7 million on near-doubled revenues.

AIM corporate governance

This year: Next 15 Group (LSE:NFG)

Last year: Pebble Group Ordinary Shares (LSE:PEBB)

I thought marketing services provider Next 15 Group was a solid choice for this award. It has interim targets to achieve net zero in six of its offices and also has a gender equal board. Trading has got tougher and pre-tax profit is expected to decline this year. Interims show a 5% increase in revenues to £286.4 million, but pre-tax profit dipped 8% to £55.6 million. There are plans to buy back up to £30 million of shares.

AIM growth business of the year

This year: Kitwave Group (LSE:KITW)

Last year: Eagle Eye Solutions Group (LSE:EYE)

I thought food wholesaler Kitwave had a good chance of getting this award because of its record of growth since flotation. It has been on AIM for 29 months and forecasts have been upgraded many times. That is through a combination of acquisitions and organic growth. There was also a recovery from lockdowns.

North Shields-based Kitwave is a wholesale business focused on ambient groceries and chilled and frozen food. The customer base is mainly independent retailers, vending machine operators, leisure outlets and foodservice companies.

In the year to October 2022, revenues jumped from £380.7 million to £503.1 million. Like-for-like growth was 27%, through a combination of higher prices and improved volumes. Gross margin improved from 18% to 20.4%, while the greater volumes helped operating margins jump from 1.7% to 4%. Underlying pre-tax profit increased from £4.5 million to £18.9 million.

In the six months to April 2023, group revenues were 23% higher at £275 million. Even stripping out the latest acquisition, organic growth is 17%. Underlying operating profit jumped from £7.3 million to £11.7 million – reflecting an improved operating margin of 4.3%. Full-year figures could be slightly higher than expectations.

autonomous vehicle car self drive 600

Best newcomer

This year: Aurrigo International Ordinary Share (LSE:AURR)

Last year: Facilities by ADF (LSE:ADF)

Coventry-based Aurrigo International was the obvious choice for this award given the success since joining AIM. It develops autonomous vehicles for automotive, aviation and transport sectors. Ground handling and cargo markets are the focus. The company floated on 15 September 2022 at 48p/share and the share price has risen to 162.5p.

Earlier this month, Aurrigo International signed a deal with International Airlines Group to deploy its vehicles at a major UK airport. A small number of vehicles should be deployed in early 2025.

Aurrigo International had cash of £2.8 million at the end of June 2023. The cash outflow from operations was £1.9 million in the first half. More cash will probably be required. It has been gaining grant funding to help finance development programmes. The EU provided a grant of €276,000 for the deployment of the Aurrigo Auto-Shuttle. Another grant was won with a logistics operator to test Auto-Cargo at East Midlands airport.

Entrepreneur of the year

This year: Mark Smithson, Marks Electrical Group Ordinary Shares (LSE:MRK)

Last year: Alan Foy, Smart Metering Systems (LSE:SMS)

Leicester-based online electrical retailer Marks Electrical was founded in 1987 by chief executive Mark Smithson. He has built up the business and it floated on AIM during November 2021. He has good relationships with manufacturers and has been instrumental in the group’s strategy.

Marks Electrical continues to win market share in the electricals retail market and overall sales grew by one-quarter in the first half. However, margins have come under pressure and analysts at Canaccord Genuity have reduced their 2023-24 forecast from £7.1 million to £5.9 million, which is below the previous year, even though revenues have been raised. Wages are rising and there has been investment in installation capacity to grow sales.

The company is in a strong position to benefit from an economic upturn with spare warehouse capacity to grow into.

Company of the year

This year: Alpha Group International (LSE:ALPH)

Last year: Next 15 Group (LSE:NFG)

Alpha Group International has been on AIM for nearly six years, but it will not be on the junior market for much longer because plans have been made to move to a premium listing next year. The market capitalisation has risen from£ 81.9 million to £775 million.

The foreign exchange and financial services provider increased its pre-tax profit by more than ten times between 2016 and 2022. In 2023, pre-tax profit is forecast to increase from £38.6 million to £47.1 million.

This year the company has made its first acquisition since joining AIM. Netherlands-based Cobase provides cloud-based bank connectivity technology that enables companies to use a single interface to manage different bank accounts. This will enable Alpha Group International to provide additional services and there is cross-selling potential for the Cobase customer base.

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.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

Get more news and expert articles direct to your inbox