AIM work drops off as market slumps

Alternative investments Market Research shows financial agencies are feeling the lack of listing briefs.

London's Alternative Investment Market, once the most vibrant growth area in City PR, is suffering from de-listings and collapsing share prices.

A raft of IPO work on the AIM market has underpinned the growth of a number of independent financial PR shops, but this listing work has declined to barely a trickle and the profitability of AIM work for financial PR firms is in question.

Buchanan once again led the way in Hemscott's quarterly AIM advisers rankings guide for Q2 - beating FD with 93 to 80 clients respectively. But Hemscott data supplied to PRWeek illustrates the decline of the market year-on-year.

The data shows the total number of AIM financial PR clients has dropped 12.5 per cent from 1,230 in Q2 2008 to 1,076 now. The top 20 City PR firms now share 769 clients between them, down from 887 a year ago, and the market capitalisation of these clients has plunged more than 60 per cent from £49.8bn to £19.3bn.

Other AIM market data shows just £3m was raised in flotations in Q1 of 2009, compared with £300m a year ago.

'It has been a very tough market for 18 months,' said Richard Oldworth, senior partner at Buchanan Communications. 'AIM companies are finding their ratings and the liquidity of their stock severely reduced.'

He also noted that there had been downward pressure on fees for AIM-listed clients: 'With companies needing to produce more financial reporting, more PR work is required and clients are getting better value for money.'

Julian Bosdet, chief executive of Abchurch Communications, acknowledged the drop in AIM IPO work had hit financial PR, but insisted AIM could still be a profitable market. He said: 'There are plenty of companies massively over-paying for PR so we are looking to offer clients a better service and better value. Our margins are being protected and clients are cutting their PR spend.'

There are some signs conditions are improving - the first quarter of 2009 saw firms raising £560m of fresh capital.

Oldworth said: 'The past few weeks have seen the beginnings of a recovery in ratings, and while it is too early to predict whether that will trigger a flow of IPOs it is encouraging.'

AIM advisers Q2 2009 ranking - total clients
Rank Company No of clients Prev qtr
1 Buchanan Communications 93 102
2 FD 80 83
3 Abchurch Communications 55 62
4 Pelham Public Relations 55 53
5 College Hill 54 50

FTSE AIM 100 advisers Q2 2009 ranking
Rank Company No of clients Prev qtr
1 Buchanan Communications 14 14
2 FD 8 9
3 Citigate Dewe Rogerson 6 8
4= Bell Pottinger Corporate & Financial 4 4
4= Brunswick 4 4
4= Pelham Public Relations 4 4
4= Smithfield Consultants 4 4

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