2009 was a year of continuing development at PLUS. The exchange and its companies faced the same challenges as every market around the world, but PLUS was nevertheless able to maintain much of the momentum of recent years, and there were some very positive performances from companies on market.
Perhaps surprisingly in such difficult times, around half of all companies on the exchange ended the year with their share price in positive territory. Some particularly strong performances included Datum International, with a rise of around 180 percent and Petro Capital Resources, with a 130 percent price rise. There were also good levels of M&A during the year – which included the largest reverse takeover on PLUS (Rak Real Estate admitted with a market capitalisation of over £600 million) and Shepherd Neame’s takeover of Punch Taverns.
In a year when investors were more cautious about where they put their money in the equity markets, PLUS companies managed to achieve a record in terms of raising cash, successfully completing around 150 separate rounds of fund-raising. Perhaps not surprisingly, the majority of this was secondary fund-raising – that is companies already on the market returning to raise additional cash.
During 2009, PLUS welcomed 18 new companies to its market. Whilst this number was lower than in previous years, this was an encouraging level of growth in the prevailing conditions and one which demonstrates the continuing appeal of equity markets for developing businesses.
As always these companies were drawn from a wide range of industry sectors, and this diversity is absolutely key to PLUS as the market continues to grow. PLUS companies operate in sectors such as media, telecommunications, engineering, support services and biotechnology and, increasingly, they also operate all over the world. Around 25 percent of all companies on the exchange are currently non-UK businesses, with China having the largest representation. There is also growing interest amongst companies and, indeed, investors from the Middle East.
In response to increasing interest from growth companies outside the UK, PLUS broadened its geographical focus in 2009 and participated in seminars and conferences in South East Asia and the Middle East, where there is strong interest from companies wishing to access the UK markets.
In addition to geographical expansion, PLUS continues to work actively with issuers and advisers to facilitate the admission of non-standard, structured products to its markets. For example, the first Contingent Value Rights (CVRs) were admitted to PLUS in January 2009 following the acquisition of British Energy by EDF. These CVRs, also called Nuclear Power Notes, were issued by Barclays Bank Plc.
For public companies, one of the key factors in maintaining a buoyant share price – and a key goal for most companies in coming to market – is increased visibility. To help companies increase their profile in the market, PLUS has recently put in place a number of new initiatives.
The exchange has commissioned leading research provider, Edison Investment Research, to publish analysis on PLUS companies and the first of their reports was published early in March this year. This service, which is provided free of charge to companies, will be invaluable in increasing visibility to institutional investors in particular.
PLUS is also partnering with Money AM, one of the UK’s leading online financial services providers to retail investors, to broaden the visibility of trading data and company news. This service will be available from March and, again, will greatly increase the profile of PLUS companies.
Later in the year, PLUS will be sponsoring road shows around the UK, organised by one of its companies, 3s a Crowd. These events will take PLUS companies out to meet private investors as well as brokers and analysts serving the retail community.
Few would be brave enough to guess what the year ahead might bring. However, it is more important than ever for equity markets to support companies at all stages in their development. PLUS remains focused on serving the needs of growth companies, and we look forward to welcoming more of them to our markets in 2010.
Vivienne Cassley, PLUS Markets Group plc