Technology companies on AIM trend report Enterprise values of software companies prove resilient in the second half of 2015 www.moorestephens.co.uk PRECISE. PROVEN. PERFORMANCE.
Technology companies on AIM trend report Enterprise values of software companies prove resilient in the second half of 2015 The infographic overleaf summarises our detailed research into the activities of technology companies trading on the Alternative Investment Market (AIM) in the six months. Over 200m has been raised in the six month period 35.5m from four IPOs and 174m relating to secondary fundraisings from 30 companies. This compares with over 700m raised in the first half of 2015 a sharp decline, although the first half was skewed by the 450m raised by Optimal Payments. The average enterprise value of a technology company on AIM has decreased in the six month period but, given the macroeconomic conditions at the turn of the year, it is surprising that values have only decreased by 0.1% compared with 30 June 2015. This resilience has been largely supported by the software sector, with enterprise values increasing by 2% compared with decreases in hardware (12%) and telecoms (9%). Dougie Hunter, Associate Director at Moore Stephens, comments the gap in valuation multiples of software companies compared to hardware companies on AIM has widened again in the second half of 2015. It closed to within 5% at 30 June 2015, but the difference now stands at closer to 40%, although given the small population of hardware companies on AIM, compared to software companies, it can easily be skewed by the performance of one or two companies such as Telit Communications and Vislink which have both seen large falls in market value in the period. 1.91 1.70 12.4 9.4 177 173 A decrease in overall revenue valuation multiples from 1.91 to 1.70 Software companies EV/EBITDA multiples have remained at while hardware companies have decreased from 12.4 to 9.4 A decrease in the number of technology companies on AIM from 177 to 173
Technology companies on AIM July to December 2015 IPOs 4 Secondary Fundraisings 30 Enterprise Values (EV) 60.9m* EV/Revenue Multiples 1.70* EV/EBITDA Multiples 11.69* 174m Raised in six months 28m 0.1% Decrease in six months 12% Hardware 1.93x 1.70x 1.6% Decrease in six months.1 Software.0 21m 2% Software 1.72x 12.4 Hardware 9.4 35.5m Raised in six months 14m m 9% Telecoms *Average 1.27x *Median 10.0 Electronics 9.0 8.6 Support services 9.6 AIM Tech Companies 91 Software 15 Hardware Telecoms 18 Electronics 24 Support Services 12 Other 10.1 Telecoms 11.7 *Median based on latest available financials to 30 June 2015 and 31 December 2015 and companies with positive EBITDA. Source: London Stock Exchange and Moore Stephens analysis. 173 technology companies trading on AIM at 31 December 2015 (excludes biotech and investment companies) as classified by Moore Stephens.
Key transaction Moore Stephens is one of the UK s leading independent corporate finance advisers. Our team provides high quality professional advice to growing companies through their equity life cycle. Global Invacom Technology Moore Stephens Corporate Finance advised leading technology company, Global Invacom Group Limited, on the first ever dual listing on the Singapore Stock Exchange (SGX) and the London AIM Market. This ground-breaking secondary listing has been widely reported in the business and financial press and is part of Global Invacom s international growth strategy capitalising on London s confidence in the technology sector. Moore Stephens Corporate Finance, led by Marty Lau and Mark Ayres, worked closely with the client and acted as Reporting Accountant to the listing. We were pleased to work with Moore Stephens on the successful listing on the AIM market, the first dual listing of its kind. This listing will enable Global Invacom to access new sources of capital to help meet its international growth strategy, broaden its shareholder base, and enhance value for its current Singapore-based shareholders and the Moore Stephens team was an important part of the process to achieve this end goal. Matt Garner, CFO, Global Invacom
About Moore Stephens Moore Stephens Stephens is a top in the ten UK accounting and advisory network, Moore with offices Stephens throughout is the UK s 9th largest the UK and independent member firms accounting across and the consulting globe. network, comprising over 1,300 partners and staff Our in clients 34 locations. range from individuals and entrepreneurs, to large Our organisations objective simple: and to complex be viewed by clients international as the first businesses. point-of-contact We for all their financial, partner advisory with them, and compliance support needs. their We achieve aspirations this by and providing contribute sensible advice to their and tailored success. solutions In-depth to help understanding clients achieve their of commercial our clients and allows personal us goals. to deliver focused accounting and advisory Clients solutions, have access both to locally a range and of core globally. and specialist services including audit and tax Clients have access to bespoke compliance, business and personal tax, trust services and solutions, including and estate planning, wealth management, IT consultancy, audit and governance assurance, and business risk, business support support and and outsourcing, outsourcing, corporate payroll finance, corporate and employers recovery and support, forensic accounting. business and personal tax, governance and Our risk, success corporate stems from finance, our industry forensic focus, which accounting, enables us wealth to provide management, innovative and personal IT consultancy, service to our and clients restructuring our niche markets. and insolvency. Specialist sectors include charities & not-for-profit, education, energy & mining, Our success stems from our family offices, financial services, healthcare, industry focus, which enables us to hotels & leisure, insurance, pensions, provide an innovative and personal professional practices, public sector, real service to our clients in a range estate, shipping, social housing, sports and of sectors. technology & media. Moore Stephens globally Moore Stephens International is a top ten global accountancy and consulting network, headquartered in London. With fees of over US$2.6 billion and offices in 103 countries, clients have access to the resources and capabilities to meet their global needs. By combining local expertise and experience with the breadth of our UK and worldwide networks, clients can be confident that, whatever their requirement, Moore Stephens provides the right solution to their local, national and international needs. Contact information If you would like further information on any item within this brochure please contact us. Mark Ayres Partner, Head of Technology T +44 (0)20 7651 M +44 (0)7903 891 450 mark.ayres@moorestephens.com Phil Cowan Partner, Corporate Finance T +44 (0)20 7651 1807 M +44 (0)7887 626 237 phil.cowan@moorestephens.com Marty Lau Partner, Corporate Finance T +44 (0)20 7651 42 M +44 (0)7899 070 609 marty.lau@moorestephens.com Dougie Hunter Associate Director, Corporate Finance T +44 (0)20 7651 1197 M +44 (0)7787 6884533 dougie.hunter@moorestephens.com Moore Stephens LLP, 150 Aldersgate Street, London EC1A 4AB T +44 (0)20 7334 9191 www.moorestephens.co.uk We believe the information contained herein to be correct at the time of going to press, but we cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein. Printed and published by Moore Stephens LLP, a member firm of Moore Stephens International Limited, a worldwide network of independent firms. Moore Stephens LLP is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Authorised and regulated by the Financial Conduct Authority for investment business. DPS31150 February 2016