Interactive Investor

Who will win big at this year’s AIM awards?

25th September 2020 14:24

Andrew Hore from interactive investor

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Our AIM writer takes his best guess for which companies and individuals will take home trophies in 2020.

This year’s AIM awards will be announced on 15 October and the shortlists for the individual awards have been revealed. They include many of the old favourites and a few new names. The awards are organised by the London Stock Exchange to celebrate outstanding achievements in the AIM market and have been running for 25 years.

So, who is likely to win the 2020 trophies?

Best investor communication

EMIS (LSE:EMIS) is on the list for the fourth year running, having won this award in 2018 and 2019. The strength of its recurring revenues has been shown during the Covid-19 pandemic. Growth will be enhanced by the launch of EMIS-X, which is a suite of analytics tools that helps the NHS to analyse data.

Former AIM company of the year Abcam (LSE:ABC) is back on this shortlist for the first time since 2017. The reagents and life science tools retailer has set out its plans to double its revenues to up to £500 million by 2024.

Automotive testing systems supplier AB Dynamics (LSE:ABDP) is a favourite of the judges and has been on many awards shortlists in previous years. A strong balance sheet has helped the company to navigate the problems of Covid-19 even though orders have been deferred. 

Oncimmune (LSE:ONC) has not been on this shortlist before but it has previously been up for the best technology award. Earlier this year, UK-based NICE and peer reviews have provided positive endorsement for EarlyCDT Lung cancer screening and detection product and this has helped the share price to bounce back. 

Best guess: AB Dynamics

Best use of AIM

Risk management and compliance software provider Ideagen (LSE:IDEA) won best use of AIM last year and back in 2015, while Keywords Studios (LSE:KWS) won it in 2018. 

Training and elearning company Learning Technologies (LSE:LTG) has managed to combine organic and acquisitive growth. The original business reversed into a shell in 2013 and had a market capitalisation of just over £40 million, which has now grown to more than £940 million. 

Marlowe (LSE:MRL) has been building up a fire protection services business via a raft of acquisitions. Importantly, management has not just grown revenues and pre-tax profit, it has also grown earnings per share significantly. That is rarely true for these highly acquisitive companies. 

Medical devices distributor Inspiration Healthcare (LSE:IHC) is a new favourite of the judges with nominations in two categories. Having reversed into Inditherm in June 2015, Inspiration has been building up its operations by adding products to its range. In the past year, it has accelerated growth by making two acquisitions (see AIM transaction award). 

Best guess: Learning Technologies

Best technology

Last year’s winner, medical device developer Creo Medical (LSE:CREO), is back on the shortlist, while cell engineering services provider MaxCyte (LSE:MXCT) won the award in 2016. Both companies have made further progress but the award is likely to be between Renalytix AI (LSE:RENX)and Synairgen (LSE:SNG)

RenalytixAI has developed the KidneyIntelX test that can be used for the early diagnosis and improved management of chronic kidney disease patients. The company has agreed pricing with the US authorities and gained a Nasdaq listing. There is potential for the technology to be used as a companion diagnostic to other treatments. 

Respiratory treatments developer Synairgen (LSE:SNG) is one of those AIM drug developers that has been around for years and has made slow, and not always smooth, progress. Inhaled interferon beta treatment SNG001 has been the main focus of the company and it has proved to be a safe and effective treatment for Covid-19 in hospitalised patients. There could be revenues generated from this treatment by the end of this year. 

Best guess: Synairgen

AIM transaction 

Amryt Pharma (LSE:AMYT) more than doubled in size after the acquisition of US-based Aegirion Pharmaceuticals, which made the enlarged business a global orphan drug supplier with two revenue generating treatments. Leptin replacement therapy Metreleptin is being rolled out in additional countries and is rapidly growing its revenues. The deal has helped Amryt to start generating cash from operations this year. 

Video games developer Codemasters (LSE:CDM) acquired Slightly Mad Studios for around £152 million. This enhances Codemasters’ position in the racing game genre and added three new game launches to the product slate. The acquisition brought an additional 150 developers to the group and these are a valuable resource. The deal was expected to enhance 2020-21 earnings by 30%. 

Online security software provider Kape Technologies (LSE:KAPE) acquired Private Internet Access (PIA) for $95.5 million (£75 million) in cash and shares, plus the assumption of $32.1 million in debt, at the end of 2019. This was a highly earnings enhancing deal.

Kape doubled revenues in the first half of 2020, while organic growth was 12% as more people working from home led to demand for security software. N+1 Singer expects earnings to increase from 6.5p a share to 13.3p a share this year, with most of the improvement coming from PIA and related cost savings. 

During the 12-month period covered by the awards, Inspiration Healthcare (LSE:IHC) spent £4 million on respiratory care products supplier Vio Holdings, whose products were already distributed by Inspiration, and £18 million for SLE, which manufactures ventilators for neonatal care. SLE is the more significant of the two purchases and it adds manufacturing capacity. Inspiration will be distributing a greater proportion of its own products. 

Best guess: Amryt

AIM corporate governance

EMIS (LSE:EMIS), flexible workspace sector software services supplier essensys (LSE:ESYS), chocolate retailer Hotel Chocolat (LSE:HOTC) and market research firm YouGov (LSE:YOU) are in line for this inaugural award. 

This is a new category, so it is difficult to assess what the judges were looking for except in broad corporate governance terms. 

Best guess: EMIS

AIM growth business

EKF (LSE:EKF) won transaction of the year in 2019 because of the demerger of Renalityx AI, and it continues to make progress with the remaining operations. The Primestore MTM sample collection device is the source of growth this year. There have been four profit upgrades this year. 

Musical instruments retailer Gear4music (LSE:G4M) has come through a problematic period in the past couple of years. Profit fell in the recent 13-month financial period after operational problems due to rapid growth. G4M is bouncing back in the current financial year. Volumes have increased and management is trying to improve margins. 

Video games developer Team17 (LSE:TM17) was growing strongly even before the increased demand for online games due to lockdown. The company has been around for three decades and that experience has helped it to negotiate changes in the sector. There were three new releases in the first half with more to come in the second half. 

Disinfectant maker Tristel (LSE:TSTL) has a strong track record as an AIM company going back more than 15 years. Covid-19 has increased the focus on disinfection and therefore Tristel’s product range. There has been a short-term boost to sales, but this increased awareness is a positive for the long-term. Progress is being made with US approvals, although the process has taken longer than hoped. 

Best guess: Tristel

Best newcomer

Despite the lack of new admissions, the list is a strong one. It includes bricks and building products supplier Brickability (LSE:BRCK), accountant FRP Advisory (LSE:FRP), spectacles manufacturer and retailer Inspecs (LSE:SPEC), MJ Hudson (LSE:MJH), which provides services to asset managers, and promotional products services provider Pebble Group (LSE:PEBB)

The two more recent entrants, Inspecs and FRP Advisory both have higher share prices. However, the share prices of Brickability and MJ Hudson, which floated in 2019, have both slumped.

Best guess: Inspecs

Entrepreneur

Debbie Bestwick of video games developer Team17 (LSE:TM17) and Andrew Day of video games services provider Keywords Studios are back on the shortlist this year. 

Sukh Chamdal of egg-free cakes franchise retailer Cake Box (LSE:CBOX) is a new name in the list.  Cake Box made a strong start to the new financial year. The company is even offering a special dividend of 3.2p a share. Equity Development forecasts a rise in earnings from 7.8p a share to 9p a share in the year to March 2021, despite suffering from the lockdown in the first quarter. 

Andrew Wass of musical instruments retailer Gear4Music is also a newcomer, although the company has been on other shortlists. 

Debbie Bestwick has been on the list three years running, which is the number of years that Team17 has been on AIM.

Best guess: Debbie Bestwick/ Team17

Company 

Identity verification services provider GB Group (LSE:GBG), floorcoverings supplier James Halstead (LSE:JHD) and market research services provider YouGov (LSE:YOU) – last year’s growth business of the year - were all on the shortlist last year. None of the winners from the past four years are included, though. 

Frontier Developments (LSE:FDEV) is the new company on the list, although boss David Braben was on the entrepreneur of the year shortlist in 2019. Frontier has benefited from greater online games playing during lockdown and has issued increased guidance more than once this year. Revenues tend to be volatile because of the timing of games launches, but this volatility should reduce as the company gets larger.

GB Group and YouGov have won other awards in past years. This a time when the judges are likely to be cautious. James Halstead has a strong long-term track record and a large cash balance. 

Best guess: James Halstead

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

Disclosure

We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.

Please note that our article on this investment should not be considered to be a regular publication.

Details of all recommendations issued by ii during the previous 12-month period can be found here.

ii adheres to a strict code of conduct. Members of ii staff may hold shares in companies included in these portfolios, which could create a conflict of interests. Any member of staff intending to write about any financial instruments in which they have an interest are required to disclose such interest to ii and in the article itself. We will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, staff involved in the production of investment articles are subject to a personal account dealing restriction, which prevents them from placing a transaction in the specified instrument(s) for a period before and for five working days after such publication. This is to avoid personal interests conflicting with the interests of the recipients of those investment articles. 

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.

Disclosure

We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.

Please note that our article on this investment should not be considered to be a regular publication.

Details of all recommendations issued by ii during the previous 12-month period can be found here.

ii adheres to a strict code of conduct.  Contributors may hold shares or have other interests in companies included in these portfolios, which could create a conflict of interests. Contributors intending to write about any financial instruments in which they have an interest are required to disclose such interest to ii and in the article itself. ii will at all times consider whether such interest impairs the objectivity of the recommendation.

In addition, individuals involved in the production of investment articles are subject to a personal account dealing restriction, which prevents them from placing a transaction in the specified instrument(s) for a period before and for five working days after such publication. This is to avoid personal interests conflicting with the interests of the recipients of those investment articles.

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