Best AIM companies of 2024 confirmed

The 2024 AIM Awards winners were revealed on Thursday night. I managed to guess three out of the first four awards, but got all the rest wrong. There were different winners for each award.

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The winners were:

Best investor communication

This year: CVS Group (CVSG)

Last year: Belvoir (BLV)

It has been a tough year for veterinary practices operator CVS Group (LSE:CVSG), with a competition investigation and the refocusing of the business on the UK and Australia. That is why I thought it had a good chance to win this award.

The Competition and Markets Authority (CMA) investigation into the household pet sector continues. There was also a cyber attack on the company. The sale of the Ireland and European operations was done at a loss to book value, but it will enable management to focus on core markets. All these things require investors to be kept up to date and to understand their impact.

CVS increased annual revenues from continuing activities by 10% to £647.3 million. Like-for-like sales were 2.9% higher, which was held back by the cyber attack on the company. Pre-tax profit fell 37% to £38.2 million due to a combination of one-off costs and higher interest costs. That was before a £20 million loss on disposals.

Best use of AIM

This year: SigmaRoc (SRC)

Last year: SigmaRoc (SRC)

This was quite a surprise because building materials supplier SigmaRoc (LSE:SRC) won this award last year and it is rare for the same company to win an award two years in a row. I thought SigmaRoc would win transaction of the year for the purchase of the European lime assets of CRH for $1.1 billion in cash and shares. That left CRH with a 15% stake in SigmaRoc.

The lime assets are already making a contribution, even though not all were acquired by the beginning of 2024. There was organic growth as well. Interim EBITDA has soared from £55 million to £100 million, but more importantly earnings are improving despite the shares issued to fund the CRH purchases.

Best technology

This year: Creo Medical (CREO)

Last year: Oxford Metrics (OMG)

I predicted that Creo Medical Group (LSE:CREO) would win this award in 2023 and 2024, and this time I am correct. The surgical endoscopy products developer has taken time to build up sales, but there is an enormous market to go for. The revenues from gastrointestinal use of Speedboat and SpydrBlade equipment are expected to grow rapidly with newer products adding to the group total. The technology will be licensed for markets outside of the Creo Medical focus.  

Since the nomination, the company revealed it is selling a 51% stake in Creo Europe to Micro-Tech for €36.7 million. This business was acquired in 2020 as a route to market in Europe. This deal will enhance the distribution and manufacturing capabilities of the business and provide funds to expand the group.

Creo Medical has also embarked on a fundraising. So far, £12 million has been raised from a placing at 24p/share and up to £5 million more can come from a retail offer which closes on 17 October. This should be enough cash to move the business towards profitability.  

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Diversity champion award

This year: Kooth (KOO)

Last year: LBG Media (LBG)

This is the third – and last – award I got right. Digital mental health company Kooth Ordinary Shares (LSE:KOO) puts its employees at the heart of everything it does. It is also supportive of the LGBTQIA+ community. Interim revenues were 179% higher at £32.5 million and Kooth moved into profit.  

Root Capital Fund II recently sold just over 3.75 million shares in at 280p each. That is 10.3% of the company and it retains a 25.3% shareholding. Kooth joined AIM in 2020 at 200p/share and Root Capital Fund II sold five million shares at that time.

AIM transaction of the year

This year: GlobalData (DATA)

Last year: Journeo (JNEO)

GlobalData (LSE:DATA) provides business data information and analytics. Private Equity firm Inflexion acquired a 40% stake in GlobalData’s healthcare division for gross cash of £451 million. That valued a business that generated 50% of group EBITDA at three-quarters of the then market capitalisation of the group. This deal impressed the judging panel.

Net cash was £188.3 million at the end of June 2024. Since then, Business Trade Media International has been bought for an enterprise value of £10 million.

AIM corporate governance

This year: System (SYS1)

Last year: Next 15 Group (NFG)

Market research technology company System1 Inc (NYSE:SST) has improved its performance in the past year. James Gregory was appointed chief executive at the end of November 2022. He subsequently faced a general meeting requisition from former boss Stefan Barden, but none of the votes were passed. However, the company received less than 60% of the votes on each resolution. This has forced the company to engage with major shareholders. The latest AGM votes received 100% or near-100% of the total votes.

AIM growth business of the year

This year: Jet2 (JET2)

Last year: Kitwave Group (KITW)

Airline and tour operator Jet2 Ordinary Shares (LSE:JET2), then known as Dart Group, moved from the Main Market to AIM in August 2005. It has grown to become the largest company on AIM with a market capitalisation of more than £3 billion.

Covid lockdowns were tough, but Jet2 is making a recovery. Canaccord Genuity has upgraded its 2024-25 pre-tax profit forecast from £523 million to £535.5 million following the AGM trading update. There was strong late booking activity in the summer and the prices of holidays increased. Repeat package holidays customers account for more than three-fifths of numbers.

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Best newcomer

This year: AOTI Inc (AOTI)

Last year: Aurrigo International (AURR)

US-based medical technology company AOTI Inc (LSE:AOTI) has developed products that help to heal chronic wounds by focusing oxygen on them. This includes diabetic foot ulcers and pressure ulcers. The flotation raised £19.5 million gross at 132p/share. The current share price is 135p.

Interim revenues improved 26% to $26.3 million (£20.2 million), although higher costs meant that the loss increased. FDA 501(k) clearance has been received for the NEXA NPWT system, which means that it can be used in the home. 

Entrepreneur of the year

This year: Sam Bazini and Eoin MacLeod ofWarpaint London (W7L)

Last year: Mark Smithson, Marks Electrical (MRK)

Cosmetics supplier Warpaint London (LSE:W7L) was founded by Sam Bazini and Eoin MacLeod in 1992, and it joined AIM nearly eight years ago. It was initially capitalised at £62.6 million at the placing price of 97p. The two men shared £21 million by selling shares in the placing and they have raised more than £37 million in total from subsequent sales. They each still own 20.5% of the company. The share price has risen to 509p, which values the company at £396 million. The share price has nearly trebled since the end of 2022.

The business initially focused on close-out business where third-party stock is acquired and sold on. Over the years, the branded business has been built up and the close-out operations become less important each year – falling to 3% of revenues.

The focus is on affordable brands, but Warpaint London was still hit by weak consumer spending in 2018, which led to the share price falling below the flotation price. Trading remained tough and the core brands were focused on. Management continued to win shelf space in retailers, such as Tesco, and build up sales internationally. This helped the business to recover and go from strength to strength.

In recent years, there have been consistent upgrades in forecasts. This has happened more than once this year. The full year pre-tax profit forecast was raised 5% to £24.5 million after the recent interims.

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Company of the year

This year: Renew Holdings (RNWH)

Last year: Alpha Group International (ALPH)

Engineering services provider Renew Holdings (LSE:RNWH) was on the shortlist last year and its steady performance makes it a good choice for this award. Core markets are road, rail and nuclear infrastructure with the focus on regular support and maintenance spending rather than large one-off projects. Renew has combined organic growth with acquisitions and over the years has moved into new infrastructure markets.

A recent move is into the electricity transmission sector. Renew is paying up to £26 million for Excalon, which provides construction services for high voltage and extra high voltage infrastructure. The next five-year funding cycle for distribution network operators is worth £22.3 billion.

The most recent acquisition takes Renew into providing repair and maintenance services for onshore wind turbines in the UK and Europe. It is paying £50.5 million for Full Circle Group, which is based in the Netherlands. This provides a foothold in Europe for a business that is predominantly UK-based.

Renew has been particularly active since it was put on the shortlist, including the above acquisition. It confirmed that full-year revenues and operating profit are ahead of expectations, while also selling its remaining specialist construction business, which was a core division two decades ago.

The 2023-24 operating profit will be slightly higher than the £70.1 million consensus forecast. Net cash will be higher than the previous consensus of £22.1 million. The results will be announced on 26 November.

Brian Winterflood award

This year: George Luckraft

Last year: Giles Hargreave

There is no shortlist for this award. Earlier this year, George Luckraft retired as manager of the AXA Framlington Monthly Income Fund, AXA Framlington UK Equity Income fund and AXA Framlington Managed Income fund. He worked at the fund management business for 22 years and prior to that he was at ABN Amro.