Scotland's Aim companies suffer as market downturn bites in Q4

Published on Monday 5 January 2009 20:20

SCOTLAND'S junior stock market companies have been warned they face a challenging year, with many battling for survival, after research showed their collective value plummeted by almost two-fifths in the closing three months of 2008.

Shares in Scottish firms listed on the Alternative Investment Market (Aim) fell by 37.9 per cent in the fourth quarter. The decline compares with a 36.6 per cent slide in the FTSE Aim All-Share index and a near-10 per cent fall in the FTSE 100 over the same period.

Business advisory firm PKF, which conducted the research, said investors may be shifting towards larger companies during "these turbulent times".

The worst-performing Scottish small-cap was oil and gas explorer Bowleven, which suffered an 85.8 per cent slump in its market value.

Battery developer Axeon experienced an 84.4 per cent drop, while Offshore Hydrocarbon Mapping saw its shares plunge 81.5 per cent in the fourth 2008.

Axeon and OHM were the second and third-largest fallers in the third quarter too.

The only company to register an increase in share price during Q4 was cashmere producer Dawson International, up 30.1 per cent.

The next lowest fallers were five-a-side football operator Powerleague, down 0.7 per cent, and pharmaceuticals company Angel Biotech, which declined 4.5 per cent.

Microemissive Displays left the market after calling in the administrators.

Graeme Cassells, corporate finance partner with PKF, said: "This is the second quarter in a row which has seen Scottish Aim shares fall by a substantial amount and the pressure remains on the existing companies to ensure they can survive this unprecedented economic downturn.

"The key to survival … will be whether they either have existing finance in place or can raise finance in the coming months. Lenders are imposing stricter lending criteria on businesses and this may cause difficulties for several Aim-listed companies.

"There are also certain sectors which lenders and investors are becoming increasingly reticent to invest in."