THE leaders of North East SMEs with aspirations to build companies of scale have been urged to consider a public listing to raise funds they need for growth.
The head of the Alternative Investment Market (AIM), Marcus Stuttard, was speaking after a visit to Newcastle to raise awareness of opportunities to companies.
He said he was encouraged by the level of interest in events he attended in the region, saying it was clear there was a willingness among owners to look for alternative sources of funding.
The number of plcs in the North East has dwindled over recent years, mainly as a result of takeovers from foreign companies or plcs outside the region.
But Stuttard said he was optimistic that trend could be reversed – and cited the example of Scotland which had seen few listings on AIM until a surge of interest last year. He said that once one company moved on to AIM it often encouraged neighbours and rivals to follow suit.
AIM – which is aimed at smaller companies and is often attractive to those in the technology sector – has raised almost £24bn for 2,200 companies since its launch in 1995. It is mainly attractive to businesses looking to fund their expansion plans.
Stuttard, who attended events organised by law firms Ward Hadaway and Dickinson Dees, said he was encouraged by the high quality of SMEs he had met.
“I am continuously struck by the fantastic technology and innovation in this country at the moment and it is not just happening in London and the South East,” he said.
“There are many strong regional businesses and that came out during my visit to Newcastle. We need to ensure these businesses have long-term access to capital.”
He acknowledged that there was sometimes a “lack of aspiration” among the owners of SMEs to build their businesses to their full potential, with directors choosing to sell their companies on if a good deal is on the table. “Unfortunately that can stifle a company’s potential and prevent it becoming a sizeable regional employer,” he said.
Stuttard acknowledged it had not been an easy time for many companies reflecting the turbulent global economic conditions – and some had taken the decision to leave AIM.