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.
The AIM Awards dinner is back this year, and it will be held in London on 14 October – as long as there is no new lockdown – and the shortlist for the awards has been announced (www.aim-awards.co.uk).
It includes many of the voting panel’s old favourites, with video games services provider Keywords Studios (LSE:KWS) gaining four nominations, while EKF Diagnostics (LSE:EKF), video games developer Team17 (LSE:TM17) and market research firm YouGov (LSE:YOU) all have three nominations.
There are more companies on the shortlists than before and eight nominees for entrepreneur of the year. The awards cover the 12 months to the end of July 2021.
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Best investor communication
This is an award that was won in 2018 and 2019 by healthcare IT software company EMIS (LSE:EMIS), and it is on the shortlist for the fifth year running. However, last year’s winner AB Dynamics (LSE:ABDP) is not on the list.
Online antibodies and life sciences products retailer Abcam (LSE:ABC) is an old favourite of the panel, but this is the only nomination it has this year. Accountants FRP Advisory (LSE:FRP) floated at the beginning of the Covid-19 pandemic and have performed well. Retailer Joules Group (LSE:JOUL) was hit by Covid-19 lockdowns but it has kept the market well informed.
Toilet tissue products supplier Accrol (LSE:ACRL) has had problems, but management has turned around the business and expanded via acquisition into related products.
Franchised lettings and estate agency Belvoir Group (LSE:BLV) has grown strongly via acquisitions and organic growth. The share price had not performed well in in recent years, partly due to concerns about regulatory changes, but it has trebled in the past 18 months as management has successfully communicated the potential for the business.
Best guess: Belvoir
Best use of AIM
This is the first shortlist including Keywords, which has used its quotation to consolidate the video games services sector. It has become one of the largest companies on AIM and managed to grow earnings per share – not just profit.
Patent translation services provider RWS (LSE:RWS) is a former AIM company of the year, and it has won other awards. Along with Brickability and SigmaRoc it is also up for the transaction of the year award (see below).
Over many years SDI Group (LSE:SDI) has been a consolidator of scientific instruments businesses and it has continued to prosper during the pandemic.
EKF Diagnostics has grown is core business, while also benefiting from spinning off kidney diagnostic firm Renalytix and taking strategic stakes in companies such as digital health company Trellus Health (LSE:TRLS), which recently floated on AIM. These opportunities have come through the relationship with Mt Sinai Innovation Partners in the US, and this relationship should continue to generate further shareholder value.
Best guess: EKF Diagnostics
Telecoms testing instrumentation supplier Calnex Solutions (LSE:CLX) is benefiting from the growing market for the implementation of 5G telecoms infrastructure. Calnex designs and manufactures equipment used by telecoms network operators, network providers and systems suppliers to test their products. This is an international business - Asia and the Americas account for the majority of revenues.
ANGLE (LSE:AGL) is making progress with the commercialisation of its Parsortix technology, which can detect circulating tumour cells in blood. FDA approval for breast cancer use has been delayed but it should be achieved in the next year.
Renalytix (LSE:RENX) and Verici Dx (LSE:VRCI), which was spun out of Renalytix, are the other two companies on the list. The Renalytix share price has fallen in recent days, due to changes in incentives for diagnostic innovation in the US, but that is likely to be after the judging panel met. This should not mask the progress that has been made in the past three years.
Verici Dx is developing three products relating to the assessment of organ transplants. The most advanced is Clarava, which assesses the likely response to an organ transplant. The company’s US laboratory has obtained certification to handle the Clarava tests. The validation trial should be completed this year and first revenues could be generated in the second half of 2022.
Best guess: Renalytix
This is a new award, which seeks to highlight a company that advocates equality and inclusion. This is FD Technologies (LSE:FDP)' only nomination this year. The Panoply Holdings (LSE:TPX), fashion company In The Style (LSE:ITS), Team17, YouGov and FinnCap (LSE:FCAP) are the other nominees.
In The Style commissioned a report by Anthesis that covered sustainability and diversity that was published as part of its flotation prospectus. YouGov believes that having employees from diverse backgrounds helps to understand and analyse varying opinions.
The Panoply believes that diverse teams help the business to perform better and on its website it states that it is more diverse than 12 months ago. Two-fifths of the senior leadership are women and 14% are minority ethnic.
Best guess: The Panoply
AIM transaction of the year
Last November, RWS completed its merger with fully listed translation software provider SDL, although it was announced in the previous awards period. This was a huge deal for the group and gave it much greater scale. RWS was AIM company of the year in 2019.
Brick distributor Brickability (LSE:BRCK) acquired Taylor Maxwell, which supplies timber and non-combustible cladding, for up to £63 million. This helped to broaden Brickability’s range of products and increase its scale. Another building materials supplier SigmaRoc (LSE:SRC) expanded its presence in Europe. Finland-based limestone supplier Nordkalk was acquired for £402 million, including debt. This is SigmaRoc’s largest acquisition.
E-learning services provider Learning Technologies (LSE:LTG) announced the acquisition of GP Strategies for £284 million. This adds to the learning and consulting activities and enhances the customer base in the pharma and aerospace sectors. Geographically, it strengthens the group in Asia and North America.
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Wealth management group Mattioli Woods (LSE:MTW) made a number of add-on acquisitions over the past year, but the main purchase was asset manager Maven for up to £100 million. This added £772 million of assets under management.
Eyewear frames manufacturer Inspecs (LSE:SPEC) paid around £85 million for Eschenbach Holding, a Germany-based eyewear and optics products supplier. This boosts scale in the US and Germany.
Best guess: RWS
AIM corporate governance
This award debuted last year and Hotel Chocolat (LSE:HOTC) was the inaugural winner, although it is not on this year’s shortlist. YouGov is the only company that is back on the list. Keywords, furnishing brands owner Sanderson Design (LSE:SDG), Eco Animal Health (LSE:EAH), asset management services provider MJ Hudson (LSE:MJH) and The Panoply are the others.
MJ Hudson has an ESG business that helps clients to incorporate appropriate criteria in their investment operations, as well as enabling investors to assess the investment company’s ESG credentials.
Best guess: MJ Hudson
AIM growth business of the year
Online musical instruments retailer Gear4music (LSE:G4M) has bounced back in the past year after a disappointing period of trading. Lockdowns have boosted online demand, which has accelerated the recovery. New distribution centres are being opened in Europe to aid further expansion.
Audio equipment supplier Focusrite (LSE:TUNE) has grown internationally since floating and has started to add to its product range through acquisitions, such as Martin Audio and synthesiser supplier Sequential. Forecasts for Focusrite have been consistently upgraded in the past year as sales of its audio equipment soared. Margins have been maintained but they will come under pressure from additional shipping costs and component shortages.
Fund manager Impax Asset Management (LSE:IPX) has shown how profitable investing in sustainable businesses can be. Assets under management were £30 billion at the end of March 2021 and by June they had reached £34.4 billion. In the year to September 2021, it is expected to increase underlying pre-tax profit from £22.2m to £42.6 million
Team17 grew its revenues by one-third to £83 million in 2020, while pre-tax profit was 36% ahead at £26.2 million. This reflects the new titles launched as well as additional lockdown demand. The growth rate has slowed in the first half of this year.
The share price of contract pharma research provider Ergomed (LSE:ERGO) more than doubled over the awards period and it is currently more than six times the level it was three years ago. Ergomed decided to concentrate on third-party services rather than co-development around three years ago and acquisitions have increased its presence in the US. The focus of contract research is oncology and rare diseases. Pharmacovigilance, which is the monitoring of drugs for side-effects after commercial launch, is becoming increasingly important.
EKF is the only company on this list that is also up for the best use of AIM award. The core business has benefitted from deals to supply Covid-19 test kits. At the AGM, management announced further investment in existing operations and plans to make acquisitions.
Best guess: Focusrite
Big Technologies (LSE:BIG) floated at the end of July – just in time to be eligible for this award. There was an immediate jump in the share price of the remote monitoring technology developer, that has pushed its valuation above £1 billion, which is around 90 times last year’s earnings. This is a high margin business with strong growth prospects. Like-for-like revenues grew by 60% in the first quarter.
Kistos (LSE:KIST) joined AIM last November as an investment company and then acquired offshore gas producer Tulip Oil earlier this year. Kistos has been the best performer of these newcomers with the share price rising from 100p to 285p.
California-based LungLife AI (LSE: LLAI) is developing the LungLB lung cancer diagnostic test. The cost of a test could be less than one-tenth of the cost of a lung biopsy, which has an average cost of nearly $15,000.
US-based video games developer TinyBuild (LSE:TBLD) has already been making bolt-on video developer acquisitions and it has a significant pipeline of new games due to be launched in the second half of 2021.
Calnex Solutions was also on the best technology shortlist, while In The Style is also up for the diversity award.
Best guess: Calnex Solutions
Entrepreneur of the year
This is the longest of the nomination lists with eight people included. Andrew Day of Keywords Studios is on the list, although he has stepped down as chief executive and director during the summer. Along with Andrew Wass of musical instruments retailer Gear4Music and Debbie Bestwick of Team17, he was on the 2020 list. finnCap boss Sam Smith was on the 2019 shortlist, as was Tim Dyson of marketing services firm Next Fifteen Communications (LSE:NFC).
Julian Baines of EKF and Neil Campbell of medical devices supplier Inspiration Healthcare are the newer names on the list. Baines is moving to a non-exec role at EKF.
Best guess: Debbie Bestwick/Team17 (This is the third year in a row that I have chosen her and one year I am likely to be correct.)
AIM company of the year
YouGov and floorcoverings supplier James Halstead (LSE:JHD) are back on the list this year. This is Keywords fourth nomination. Vets practices operator CVS Group (LSE:CVSG) did better than expected last year. Like-for-like sales increased by 17.4% and that reflects an acceleration in the second half. Underlying profit will be slightly better than forecast when the full-year figures are published on 23 September.
Focusrite and Ergomed are both on the AIM Growth company shortlist.
Best guess: Keywords Studios
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