AIM market to lose another £1bn company

The small band of AIM stocks worth more than £1 billion is set for further depletion after GlobalData (LSE:DATA) followed Gamma Communications (LSE:GAMA) in announcing a move to the main market.

GlobalData, whose £1.6 billion valuation is equivalent to the top half of the FTSE 250 index, was formed in 2016 following the consolidation of several data and analytics providers.

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Its chief executive and majority shareholder is Mike Danson, who founded the online information company Datamonitor in 1990. Datamonitor floated on the stock market in 2000 before being sold to Informa for £502 million in 2007.

Having acquired certain Datamonitor businesses, GlobalData has grown through its dealmaking and organic growth to rack up revenues of about £286 million in the 2024 financial year.

It has just completed the first part of a three-year growth transformation plan, which has seen the company invest in its AI capabilities to boost client insight. Subscriptions make up about 80% of revenues.

Danson said last month: “We enter 2025 from a position of strength with good revenue visibility and the firepower to execute on our strategy. We continue to progress towards our targets of 45% margin and £500 million revenue by the end of the three-year growth plan."

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The company believes a higher profile and access to a wider pool of capital will support its growth ambitions and attract additional investors and customers.

The shares were 240p in May before falling back to 185p earlier this week. They rallied to 200p this morning after GlobalData unveiled a £50 million share buyback programme alongside announcing its intention to join the main market.

The shares currently trade at 13-14 times forecast 2025 earnings, which compares with FTSE 100-listed information business RELX (LSE:REL) on 20 times.

Investec, which has a 250p target price, said: “We see this as fundamentally too low given the longer-term growth prospects, and see further support to the share price from potential upward revisions to estimates.”

Panmure Liberum has a target price of 288p, noting that business intelligence companies tend to benefit from additional demand in volatile fast-changing environments. “Mr Trump seems willing to help for the next four years,” it added.

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With a 1,200% total return, the broker said there can be little doubt the company has been a major success in its decade on AIM.

Panmure expects GlobalData to benefit from a widening of structural demand versus AIM, where it believes the stock has been used as a source of liquidity in a market seeing outflows.

GlobalData is the fourth-largest stock on AIM, behind the £3.3 billion valued Jet2 Ordinary Shares (LSE:JET2) as well as Burford Capital Ltd (LSE:BUR) and HUTCHMED (China) Ltd (LSE:HCM). The fifth-largest at £1.3 billion is Gamma Communications, which expects to move to the main market in the second quarter.

Its shares were today trading at 1,365p, which compares with 187p on its AIM admission just over a decade ago. Newbury-based Gamma has increased its dividend by 10-15% every year since the IPO.

Gamma now boasts a 30% share of all UK business calls, serving SME clients as well as large enterprises including Morrisons, Tui and the AA.

Its pursuit of a higher-profile listing follows expansion in the UK and Europe, including the recent acquisition of voice services provider Coolwave and the contact centre business BrightCloud.