New Cash Shell Guide features on Growth Business
John Holland Managing Director of Holland Bendelow recently spoke with David Thorpe of Growth Business in an article entitled ‘Ghost in the Shell: How investing in dormant public companies can help you reach your AIM
‘ The discussion focused heavily on how to carry out transactions with a cash shell and the launch of the 2015 Cash Shells Guide which is available to download now. John commented, ‘The main reason companies are drawn towards a cash shell transaction is the guarantee that there is already cash available to be used. By contrast, companies using the more traditional route of flotation and undertaking a fundraising have no such guarantee that the required funds can be raised.’ and further said ‘that it is a process that needs ‘demystifying’ and this is what the new guide aims to do. Head on over to the link above to read the full article and download the new 2015 Cash Shells Guide here
London Stock Exchange ready to sell off US business
The London Stock Exchange Group has confirmed that it is to sell the asset management business it acquired as part of its $2.7bn purchase of Russell Investments, the index provider. Holland Bendelow believe that the outcome was anticipated, even before the London Stock Exchange began a strategic review of the unit once the deal for its parent was completed in November. John Holland says “some market participants had suggested that the long-term ownership of Russell Investments may put the London Stock Exchange in a conflict of interest situation with some of its users’’ London Stock Exchange Group has already received a number of expressions of interest in a potential acquisition of Russell Investment Management. Holland Bendelow believe that the asset management division which has around $260bn under management could be offloaded to a rival, or to a private equity business, and that the asset could be worth in the region of $1bn. The London Stock Exchange bought Russell Investments which is well known for compiling equity indices, as a strategic push into the US, the world’s biggest fund management market and the largest single market for exchange traded funds, as well as consolidating its position in the fast-growing market for data and indices.
New 2013 guide to the AIM Stock Market launched
A guide designed for companies considering raising investment on the AIM Stock Market has recently been launched. The guide comes as interest amongst growing companies in floating on AIM rises following recent Government tax incentives. The AIM Stock Market, or AIM for short has been a stock market designed for growing companies to raise funding since its launch in June 1995. Since then over 3,000 companies have joined the market and collectively raised over £80billion in investment capital to support their growth. The other key advantage of a flotation on the AIM Stock Market is the lighter touch in regulation which helps attract a broader range in size and sectors of companies. There are no restrictions on the size or previous trading record of companies and only half-yearly reports required. The ‘Essential AIM Stock Market Guide
’ contains in-depth knowledge and insight from experts involved in advising privately owned companies about using AIM to grow businesses. Topics include, how to raise funding on AIM, the different methods of floating on AIM, and the costs involved. John Holland, Managing Director of Flotation Consultants Holland Bendelow who put the guide together says ‘‘The Essential AIM Stock Market Guide’ has taken some considerable time to produce. We wanted to publish a one stop shop guide to AIM for the owners and Directors of small and medium-sized companies aspiring to join AIM’’. The AIM stock market guide comes as companies on AIM have raised over £1billion in the first 5 months of 2013, at a time when banks and other lenders remain reluctant to lend to small and medium sized growing businesses. Trading in AIM shares has also taken off, with the highest average daily shares traded in the first 5 months of 2013 in AIM’s 19 year history. If your company is considering a flotation on the AIM Stock Market the free ‘Essential AIM Stock Market Guide’ is available free for companies here
. [accordion title=”Falling Costs of Joining AIM.
“] The cost of joining AIM (The London Stock Exchanges junior stock market) has fallen for the first time in seven years, driven down by competition amongst AIM advisors and brokers over the rates they charge for undertaking AIM IPO’s. See more in our blog
Holland Bendelow responds to Government consultation on ISA investments in AIM companies.
In the Autumn Statement 2012, the Chancellor announced that the Government would consult on expanding the list of qualifying investments for stocks and shares ISAs to include shares traded on small and medium-sized enterprise (SME) equity markets. This was a particular reference to The London Stock Exchanges AIM Stock Market and ICAP’s ISDX stock market (previously known as PLUS). The consultation is about implementing his announcement and the consultation document sets out a proposal to change the ISA rules to allow company shares traded on a broader range of equity stock markets to be eligible. The consultation began on 13 March 2013 and is due to close on 8 May 2013 The Government intends to gather views on the proposed approach, so that these can be taken into account before publishing new ISA Regulations. The consultation will gather feedback from a variety of constituent groups including;
- Equity markets on which shares are traded that will become eligible for stocks and shares ISAs under the Government’s proposed approach
- Equity markets on which shares are traded that will continue to be ineligible for stocks and shares ISAs under the Government’s proposed approach
- Non-UK equity markets and their representative bodies
- Representatives of other affected groups, such as investors, consumers, ISA managers and financial advisers
John Holland, Managing Director of Holland Bendelow, welcomed the consultation ‘’Following the Chancellors announcement to abolish stamp duty in the March 2013 Budget, we welcome the Governments consultation on the future of ISA’s in relation to AIM and ISDX companies. Undoubtedly initiatives such as this will be good news for both investors in small cap companies and the companies themselves. Our view is that the time is right to further stimulate investment in AIM and ISDX companies, and we would like to see consultation turn into action as soon as possible’’
AIM stocks to be allowed into ISA’s in the March 2013 Budget.
There is renewed speculation that the government is considering easing the rules governing ISA’s to allow these to include AIM companies shares. The market still appears divided on this question with most market commentators in favor and a smaller number of die-hards against. One of the major drawbacks with ISA’s is that they may only include companies shares that have been listed on a Recognised Investment Exchange (RIE). This requirement means that the vast majority of companies listed on AIM (The Alternative Investment Market
) are excluded as, for regulatory reasons, AIM is not an RIE. The government is now consulting on allowing AIM company shares within ISA’s. In January, Treasury Minister Lord Deighton said,“the government understands the need to encourage investment in growing businesses, and will publish a written consultation on expanding the list of qualifying investments for stocks and shares ISA’s, to include shares traded on SME equity markets shortly.” In addition, a recent interview with Vince Cable, the Business Secretary, revealed that “There are areas where the government has already signaled it would like to move, such as AIM-listed companies shares being incorporated in ISA’s’’. The arguments for including AIM company shares in ISA’s include;
- AIM company shares are allowed in Sipps, so why not in ISA’s?
- Shares quoted on riskier stock exchanges such as the Channel Islands Stock Exchange are eligible for ISA’s. This seems ridiculous as companies that have adhered to much tighter regulatory requirements on AIM are excluded from ISA’s.
- Any sensible investor is aware that shares can go down as well as up, and this applies across all stock markets, so why should AIM company shares be excluded from ISA’s?
- From the Treasury point of view it’s likely that any change would be tax-neutral.
- AIM has demonstrated its credentials since 1995 as one of the most successful growth stock markets in the world.
- A relaxation of the rules would benefit brokers, companies and private investors.
John Holland Managing Partner at Flotation Consultants, Holland Bendelow says, ‘This initiative would seem to offer benefits to investors and to AIM companies, and such an initiative seems finally on the cards. The markets are now waiting for a formal announcement in the Chancellors budget with a degree of cautious optimism’. Although a small number of market commentators have doubted the impact of a relaxation of the rules on ISA’s on AIM companies, there now appears to be considerable momentum built behind easing the rules. An announcement is expected on 20th March.
EIS law change to benefit the AIM Stock Market in 2013
[February 2013, London] New EIS rules are set to propel The AIM Stock Market forward in 2013 as the market of choice for smaller growing companies seeking investment capital, and for savvy experienced investors looking to invest in tax efficient growth stocks. 2012 was a tough year for AIM. In spite of this, the combined market value of the companies listed on the market was £63b at the end of the year. More importantly, companies on AIM between them raised over £3b in growth capital. For investors, with traditional asset investments such as bonds and property having delivered unspectacular returns in recent years, the prospect of tax efficient alternatives such as AIM EIS investments is unsurprisingly attractive. Two major legislative changes in 2012 are bringing the London Stock Exchange’s junior stock market, AIM (the Alternative Investment Market) squarely into their sights in 2013. The purchase of newly issued shares of AIM stock market companies has, over recent years, qualified for enterprise investment scheme (EIS) tax relief. But in 2012, the rules changed significantly in favor of private investors. A key rule change in April 2012 doubled the annual allowable EIS investment per investor from £500,000 to £1m and, at the same time increased the amount of funds an EIS qualifying company could raise in a year from £2m to £5m. If that wasn’t enough good news, the rules governing the qualifying criteria of companies able to access EIS funds were changed. The key changes were an increase to the size limit of EIS qualifying companies balance sheets, and the numbers of employees that companies were permitted to have in order to qualify for EIS. This means that a new class of larger, more mature AIM companies are able to qualify for EIS investment, which is good news for the companies and good news for canny experienced investors looking for investment in growing AIM stock market companies. The second more recent development was announced on publication of the 2013 Finance Bill. It had previously been proposed to cap the amount of income tax relief that a taxpayer could receive (from the 2013/14 tax year onwards), which would have threatened to limit tax relief on losses on EIS investments. The new bill now has a carve-out for shares in EIS qualifying businesses. The investment case for tax efficient investment in EIS qualifying AIM companies has now gathered new momentum. The combination of these two developments will no doubt have a positive effect in encouraging more investment in companies listed on The AIM Stock Market in 2013.
AIM Listing newsletter – AIM fights back
After recent articles proclaiming AIM is dying a painful death and the new issues market in the doldrums for months, the world’s most successful growth market is returning to claim its crown. In the biggest crisis in its fourteen year history, AIM has had to withstand a battering over recent months, with some market commentators predictably announcing the demise of the London Stock Exchange’s smaller company market. It would seem that having taken this on the chin, AIM is in the process of fighting back on all fronts. So what are the key signs of AIM’s dramatic recovery? May was the strongest month in almost a year for companies raising cash on the market. £585 million was raised the strongest showing since June 2008. In May the statistics illustrate that the number of companies delisting fell to 19, the lowest number since May 2008. Last month the new issues market ‘feel good factor’ was boosted by Max Property’s £220m listing which was the first primary listing to raise cash on AIM this year. Also June has started well, with a number of new admissions expected this month, among them New River Retail which is expected to raise £250m. Perhaps the most visible sign of recovery in the market is the impressive increases in the FTSE AIM indices, particularly since the beginning of March. The AIM UK 50 climbed over 30% in the period from 1717 to 2235. The AIM 100 climbed from 1785 to 2435, and most impressive of all, the AIM all share index made an impressive surge of over 40% from 383 to 545. And if this wasn’t good enough news for AIM’s new head Marcus Stuttard, the longer term viability of the market was endorsed by the recent announcement that the Tokyo AIM has been awarded a licence by the Japanese Financial Authority. It could be some time before smaller cap Japanese companies are trading on the market. Nevertheless this is an important breakthrough for the London Stock Exchange, and signals further international growth for AIM in the years ahead.
Crain’s Manchester Business
Accountancy firm, Mazars, is holding a seminar to educate Manchester entrepreneurs on the benefits and processes of floating on PLUS markets – the small and mid-cap stock exchange. PLUS is an alternative investment market that is less intensely regulated and expensive than AIM (the Alternative Investment Market), making it more accessible to smaller companies. PLUS is a key market for businesses looking to raise up to £5 million in equity finance. The seminar will offer a commercial insight into the benefits of PLUS. Speakers include Richard Metcalfe, Partner, Mazars LLP; Maggie Rodriguez-Piza, Partner, Mazars LLP; John Holland, Managing Director, Holland Bendelow Consulting Group; Paul Haddock, Head of Capital Markets, PLUS Markets Group.
Business intelligence magazine – AIM companies on the acquisition trail
Recent research reveals that 96% of AIM companies either have considered or would consider AIM for a second round of funding using AIM at some stage in the future. Many of the companies interviewed in a survey saw themselves as likely acquirers of other companies in the next 12-18 months. Other highlights of the annual Baker Tilley AIM survey revealed that the majority of AIM companies are content to stay on AIM; only a quarter felt that an eventual move to the London Stock Exchanges Main Market was important. John Holland
Business intelligence magazine
Is PLUS the new AIM? PLUS Markets’ Group is an independent UK stock market operator who provide primary and secondary markets. PLUS Market’s primary market, PLUS-quoted is designed for smaller companies, both domestic and international, and currently has circa 180 companies with a combined market cap of over £2.4 billion. PLUS-quoted is used by companies for a variety of reasons. Some companies use the market as a way to raise small to medium fundraisings, typically around the £1m mark. Other companies use PLUS-quoted to provide an independent valuation of their shares and to create a dealing facility for them. Although PLUS-quoted is a smaller company stock market in its own right, some companies may use the market as a springboard to AIM or the Main Market. Undoubtedly PLUS-quoted is a good place for companies to learn many of the disciplines required on larger stock markets, whilst at the same time providing some liquidity for shareholders. PLUS-quoted is a less expensive flotation option for smaller companies than AIM; time will tell whether it can develop the larger fundraising capacity that AIM offers. John Holland, Managing Director Holland Bendelow
The Business Journal – To float or not to float?
For companies who require long term funding to support growth three different options are usually worth considering. All have their attractions, but also their drawbacks. Bank finance is the most common method of company funding in the form of long-term loans. The second option, Venture Capital is often the first experience smaller companies have of selling equity in their business. Generally the venture capital providers take a substantial stake in the business and have a clear exit strategy in mind via either trade sale or flotation. The other option is a listing and subsequent fundraising on a public market such as AIM. This can offer suitable companies an enhanced profile and access to equity finance, both at the time of admission and through the further issue of shares. Raising equity finance on AIM or other UK stock markets may be a cheaper option than the other two, but may also involve some tradeoffs in return. For some companies the perceived loss of control of joining a public market is a bitter pill to swallow, although many would argue that the venture capital option involves even greater loss of control, because one major shareholder can wield far more power than a diverse range of smaller shareholders on a public market. Every option needs to be examined closely, as all have potential implications for the shareholders and the business. A good place to start is by asking two simple questions.
- What are the long-term goals of the existing shareholders?
- What level of funding will the business require in the short, medium and longer term?
If the existing shareholders in the business are those responsible for the success of the business to date, and the company requires substantial funding, in one large fundraising or over a period of time, then flotation may be an option worth considering. Holland Bendelow offer companies of all sizes expert flotation advice from the earliest feasibility stage through to flotation. Call us on 01430 802021 for a confidential consultation. <
Business Intelligence Magazine – If growth is your AIM
Growing companies that need to secure long-term funding are increasingly using the UK stock markets. In the past 3 years alone, over 1300 companies have floated on AIM (The Alternative Investment Market), The London Stock Exchange’s market for smaller growing companies. AIM’s attraction is that it provides a flexible regulatory environment, which is designed specifically to meet the needs of companies looking for investment capital to fuel their growth. One of the key advantages of AIM is that there is no minimum number of their shares that a company is required to put on the market. In practice, this means that existing shareholders in a company can retain a significant shareholding and control, once floated. There are companies from 39 different business sectors represented on the market, and AIM is now regarded as the most successful growth market in the world. For more information please contact John Holland at Holland Bendelow flotation consultants
Talk Business Magazine’ September 2011
Flotation consultants, Holland Bendelow Consulting Group have been appointed by FSL to advise on its flotation on the AIM (Alternative Investment Market), the London Stock Exchange’s stock market for growing companies. FSL specialises in transforming empty or underperforming buildings into affordable homes for tenants and sells at ‘real prices’ to investor landlords. Holland Bendelow’s MD, John Holland said: ‘Holland Bendelow confirms that we are currently engaged in advising on a future AIM flotation. ‘With the average price of homes in England and Wales reaching £175,000, this is beyond the reach of many first time buyers, therefore the need for affordable housing and student accommodation has never been greater.