SMALL CAP MOVERS: Have Britain’s minnows finally seen the end of the funding crisis?

Are we starting to see a breakthrough in the small cap financing problems of the past two years? Possibly. But don’t expect this to be a long-lasting phenomenon.

Since the beginning of May, growth companies have raised around £270 million in new investment.

That may not sound like a huge amount, but it represents an increase when you consider that a total of £228 million was raised in the first quarter through IPOs and follow-on financing.

This market renaissance is expected to be short-lived as pent-up supply breaks through ahead of the general election.

Since the beginning of May, growth companies have raised around £270 million in new investment.

The prevailing view in the Square Mile is that the taps will be turned off after the election and London will head into the days of summer.

And don’t think that the past six weeks have been a period of pure joy.

Companies have been forced to take steep discounts to complete some sizeable fundraisings, with investors asked to endure significant dilution – just as retail platforms such as REX and Primary Bid have tried to mitigate the latter problem.

For those not fortunate enough to replenish the coffers, it has been an uphill battle – and for some it is already too late.

Active Energy Group (down 63 percent) said it plans to cancel its listing on AIM and enter a voluntary liquidation process after failing to receive an acceptable offer for its CoalSwitch business.

R&Q insurance (of 97 percent) is following a similar path, with owner of the Bens Creek metallurgical coal mine pulling the trigger two weeks ago.

As for the broader market, the AIM All-Share found itself in something of an early summer position as it lost 2.35 points, or 0.3 percent, to trade at 774.75 on Friday.

It underperformed its benchmark, the FTSE 100, which rose 1.3 percent to 8,252.07, albeit on modest volumes.

Why does a polling station fail to produce results during a general election? Well, that’s a question that investors are investing in YouGov will wonder after the group sounded the earnings alert on Thursday, leading to a 45 percent crash in the company’s market value.

“Former YouGov observers might assume the company would have a great time in the election, but the polls make a relatively modest contribution to group revenues,” said Russ Mold of funds platform AJ Bell.

‘The data analytics side is more important and this is where the company is struggling. The company invested for an expected growth acceleration in the second half of the financial year, which traditionally did not materialize.’

The fun and games continue Kibo energy (a decrease of 37 percent). This week it unveiled a simplified restructuring plan, raising £340,000 at a share price of 0.01 per annum and appointing major shareholder Clive Roberts to the board.

It replaces an earlier blueprint that raised £500,000 and appointed natural resources veteran James Parsons as non-exec.

An increase of 172 percent and the big winner of the week is Longboat energy which will shift its focus to South East Asia following the sale of its stake in the Norwegian oil and gas joint venture, which will raise it around £2m.

It concluded by noting that exploration in Norway favors “an increasingly small group of very large companies.”

Ringing in the changes in the boardroom of Kap-XXthe supercapacitor specialist, certainly had the desired effect on the shares, which more than doubled.

One of the many non-executive appointments was that of Dr Graham Cooley, who was transformative ITM power from microcap to hydrogen storage unicorn (although ITM has since given up some of those stellar gains).

Bradda main lithium (up 41 percent) enjoyed a decent run in the wake of a promising set of drilling results from the Basin Project in Nevada, which is believed to trigger a £2.4 million payment from its partner Lithium Royalty.

Finally, Alpha FMCone of AIM’s bigger constituents, looks set to bow out after the board gave its blessing to a £626m bid from private equity group Bridgepoint.

Ken Fry, chairman of the fund management consultancy, said the offer “recognizes the quality and value of the business and represents an opportunity for Alpha FMC shareholders to realize their full investment.”

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