Market blues leave Scots firms undervalued INVESTMENT: AIM

0 Comments | Sunday Herald, The, Feb 17, 2008 | by Steven Vass

THE number of Scottish companies listed on the alternative investment market (AIM) could fall by 20-per cent this year due to the unstable stock market, according to a leading corporate financier.

David Ovens, a director at Edinburghbased Noble & Company, said he believed that one or two of Scotland's 30 AIM companies would certainly de-list, and that the number "could easily rise to a half- dozen".

"The problem is that the market is not recognising their value, " he said. "The AIM market will not bounce back until the fourth quarter of this year at the earliest, and it might well not be until 2009." David Lonsdale, assistant director of CBI Scotland, said that if Ovens was correct, it reflected the same cooling of expectations noted in the association's recent business trends survey.

He compared it to the fact that the demise of Scottish & Newcastle reduces the number of Scottish companies on the FTSE from seven to six. "When an upturn does come, I would expect more firms to look at AIM as a viable option to get funds to expand, " he said.

Ovens, who heads the Scottish corporate finance team set up by Noble last year, said that his bank wanted to see more Scottish companies turning to the markets when confidence returned.

"The markets have huge benefits in terms of profile-building, access to capital and the ability to use that capital to make acquisitions, " he said.

Last month, Noble announced its first deal since the launch of its Scottish corporate finance team, having advised US-based private equity firm Gores Group on the GBP30 million sale of Fife cabling company Brand-Rex to the management and Murray Capital.

Although it has gone into Scottish hands, Ovens pointed out there had been interest from as far away as Asia by virtue of Noble's membership of investment network Global M&A. As the only UK member, Noble has access to a useful forum for announcing buyer and seller details to members all over the world.