Another blow for AIM as investment company Adams prepares to exit

Another small British company is preparing to delist AIM as London’s junior market continues to shrink.

Investment company Adams said on Thursday it will leave the AIM stock exchange early next month after shareholders voted to approve the cancellation of its shares.

The group, headquartered in the Isle of Man, announced plans to exit London’s junior stock market last month, citing the high costs and legal burdens associated with having a public listing.

It also said the “limited liquidity” of the company’s shares makes the share price more volatile and “no longer adequately” provides better access to capital over the medium to long term.

Adams investors accepted a resolution at an extraordinary general meeting on Wednesday calling for the group to delist, meaning its shares will be halted from trading. AIM market from 7am on December 5.

London’s AIM market allows smaller and fast-growing companies to raise money without being subject to the same rules as larger exchanges.

The number of companies in the AIM market recently fell below 700 for the first time since 2001, according to accounting firm UHY Hacker Young.

Concerns about changes to inheritance tax in the run-up to the Budget led to more than 20 companies leaving AIM after the July general election.

While Chancellor Rachel Reeves did not announce that the tax break would be scrapped, she still said AIM-listed shares would be subject to a 20 percent inheritance tax rate.

Many analysts believe this will discourage investor interest in UK small-cap companies, which Adams says have suffered from weaker liquidity and access to growth capital in recent years.

It believes that many companies in its portfolio are ‘in a situation where their current public market valuations do not reflect their underlying potential and there is no indication that these markets are expected to recover in the near future’.

As a result, the company believes its strategy of investing in the UK and European small or medium market capitalization sectors is attractive and has decided not to make further investments.

Instead, Adams will undertake an “orderly realization” of its current investments and return capital to shareholders.

The company’s bosses acknowledged that shareholders looking to sell their shares could “find difficult buyers” due to the shares’ low liquidity.

Therefore, Adams will buy the shares at 4p each before the cancellation.

Adams’ holdings include Griffin Mining, which operates a zinc gold project in China, drug developer C4X Discovery, medical device maker NIOX Group and computer vision technology company Seeing Machines.

After this, it expects to be voluntarily dissolved or subject to administrative dissolution.