Hornby, a 124-year-old UK firm specializing in model trains, has announced its intent to delist shares from AIM.
The microcap generated revenue for the six months to September 2024 of £25.0 million, which was 10% higher than 2023 at £22.7 million. The company lost over £5 million during the same period.
It has been reported that Hornby made its decision based on concerns about the limited liquidity provided on AIM and the excessive cost, which is said to be around £400,000 a year.
While the company is small and, on its own, a minor event, the delisting plans are said to be indicative of greater malaise at AIM as another firm decides to exit the exchange.
Globacap co-founder and CEO, Myles Milston, has once again voiced his opinion that AIM is “no longer fit for purpose.” Milston predicts that private markets for early stage firms are the future of providing access to capital and liquidity for trading.
“The writing is on the wall for AIM. Plagued by a lack of liquidity, dwindling funding opportunities, low trading volumes, and erratic share price movements, firms are now deterred from listing, and others are actively delisting in favor of private markets – which are going full steam ahead,” said Milston. “Powered by improved technology that enables public market-like efficiency, private capital markets are now able to offer boosted levels of liquidity and funding for investors and companies looking to raise funds. The UK government and LSEG are well aware of this shift, with both actively pushing the PISCES framework to boost private markets.”
Milston cautioned against clinging to the “good old days” of greater demand and small stock performance, as the eventual demise of AIM “signals the market’s direction—towards the rise of private markets.”
While private markets may provide an answer to smaller firms’ capital needs, a report earlier this week revealed a plan to rebrand and revamp AIM to save the exchange is being developed.
Reuters reports that Jon Prideaux, the former chief executive of Boku – a payments Fintech, is preparing to meet with LSEG executives to outline his vision to update and improve AIM. LSEG has publicly stated that AIM is not for sale.