INTRODUCTION MARKET COMPANY REPORTING AUTUMN 2017

DIRECTAIM | Q3 2017

PAGE AA QUARTERLY UPDATE FOR AIM COMPANIES //

INTRODUCTIONSCOTT KNIGHT

MARKET SPOTLIGHTSECTORWATCH

AIM TOPS THE TABLES

COMPANY FOCUSOXFORD METRICS

REPORTING AND GOVERNANCELSE CONSULTS ON PROPOSED CHANGES TO THE AIM RULES

PSC REGIME EXTENDED TO AIM

NOMINATE YOUR NEDS

WHAT IS YOUR PLAN FOR BREXIT?

A QUARTERLY UPDATE FOR AIM COMPANIES AUTUMN 2017

DIRECTAIM | Q3 2017

PAGE 01A QUARTERLY UPDATE FOR AIM COMPANIES //



AIM TOPS THE TABLES




NOMINATE YOUR NEDS


INTRODUCTION TO DIRECTAIM Q3 2017Given the economic and political backdrop in the UK in recent times, the AIM market as a whole has performed very well in the last quarter. Our Sectorwatch tracker has shown that all industry sectors have grown in the second quarter of 2017 with Transport & Logistics having the strongest growth and Leisure & Hospitality the weakest. We look at some of the reasons behind individual industry sector performances and in this issue of DirectAIM we also investigate the performance of AIM compared to the FTSE index and other junior markets around the world.

As well as share price growth, we have seen a boost in the number of companies looking to list on AIM with 12 IPOs raising proceeds of £239m in Q2 2017, well above the number of listings in Q1.

BDO’s Capital Markets team has completed 17 IPOs in 2017 and has been the number 1 reporting accountant on AIM for each of the last six years. View our highlights and selected deals from 2017

There is plenty of uncertainty ahead but the AIM market and its constituents look to be in good shape to weather whatever the future holds. As well as articles discussing the performance of AIM, we profile Oxford Metrics in this publication, a fascinating company operating across many business sectors, and provide our usual roundup of tax and reporting changes.

I hope you find this an interesting read and don’t hesitate to contact me if you would like to discuss any of the content.

SCOTT KNIGHT Partner – BDO LLP

[email protected]



AIM TOPS THE TABLES




NOMINATE YOUR NEDS



DIRECTAIM | Q3 2017

https://www.bdo.co.uk/getmedia/efa462d8-7e23-41ca-ac3d-4542139968d4/Capital-markets-2017-at-a-glance.pdf.aspx

Since its inception AIM has seen six UK General Elections and five different Prime Ministers. New listings thrive amid stable political and economic conditions. The expectation of a successful outcome for Theresa May in the recent election could well have boosted the number of companies looking to list on AIM with 12 IPOs raising proceeds of £239m in Q2 2017, well above the number of listings in Q1.

However, as things turned out, Mrs May’s plea to the British electorate to strengthen her hand for the Brexit negotiations resulted in a minority Conservative government and a distinct lack of stability. Yet while conditions ahead remain challenging, the weak pound has attracted international investors and provided a boon for UK shares in general.

The robust performance for AIM IPOs this quarter was spearheaded by the April IPO of Eddie Stobart Logistics. The famous brand raised £122m and achieved a market capitalisation of £582m at admission. The float marked a return to the capital markets for the business which was taken private in 2014. The IPO coincides with the Transport and Logistics sector posting the strongest share price performance this quarter.

International listings on AIM picked up in June. For example, Trinidad and Tobago-focused oil firm, Touchstone Exploration, touched down and netted proceeds of £1.5m. Already listed on the Toronto stock exchange, the company is currently producing around 1,300 barrels of oil per day. With its new investors on board, the dual-listed company will continue to pursue a growth strategy that involves drilling four new wells and 24 well recompletions in 2017.

In the Technology & Media sector, international companies continued to look to AIM to raise new funds. For example, Ethernity Networks of Israel raised £15m in late June. The field programmable gate array (FPGA) specialist will use the funds to help it meet demand from systems vendors that are looking to build their products around its data processing capabilities.

Private equity exits via an IPO on AIM were also evident in Q2. Mattress seller eve Sleep floated in May, raising £35m and achieving a valuation of £140m.

Given the economic and political backdrop in the UK in recent times, the AIM market as a whole has performed very well. Individual companies still continue to deliver stellar performances and thrive on the kind of challenges and opportunities that entrepreneurs and innovators embrace. The road ahead is fraught with uncertainty and a great deal still has to play out at the political level before the dust settles. However, the AIM market and its constituents are in good shape to weather what unfolds and garner new successes along the way.

BDO AIM SECTORWATCH

MARKET SPOTLIGHT

DIRECTAIM | Q3 2017



AIM TOPS THE TABLES




NOMINATE YOUR NEDS



MARKET SPOTLIGHT

Leisure and HospitalityNatural Resources

Real Estate & ConstructionProfessional Services

Financial ServicesTransport & Logistics

RetailTechnology & Media

ManufacturingOverall Aim Index

JAN

MAR

MAY JU

L

SEP

NO

V

2012 2013 2014 2015 2016 2017

0

100

200

300

400

500

700

600

JAN

MAR

MAY JU

L

SEP

NO

V

JAN

MAR

MAY JU

L

SEP

NO

V

JAN

MAR

MAY JU

L

SEP

NO

V

JAN

MAR

MAY JU

L

SEP

NO

V

JAN

MAR JUN

MAY

SOURCE: Bloomberg; Values rebased to 100 on 2 January 2012

SECTOR SHARE INDEXAIM INDEX BY SECTOR: JANUARY 2012 TO 30 JUNE 2017 (REBASED TO 100)

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


BEST PERFORMING SECTOR INDICES ON AIM QUARTER 2 2017

WORST PERFORMING SECTOR INDICES ON AIM QUARTER 2 2017

PROFESSIONAL SERVICES

+9.45%

RETAIL+1.41%

MANUFACTURING+6.52%

FINANCIAL SERVICES

+2.34%

TRANSPORT AND LOGISTICS

+10.51%

LEISURE AND HOSPITALITY

+1.23%

BDO AIM SECTORWATCH CONTINUED

MARKET SPOTLIGHT

TRANSPORT AND LOGISTICS DELIVERSTransport and Logistics was the star sector performer in the last quarter, with the BDO Sectorwatch share price up by a healthy +10.51%, fuelled in part by the continued growth of online shopping. As players like Amazon further expand their footprint in the retail space, and as a new breed of hipster fashion and homeware retailers grow at a frenetic pace, then the demand for the delivery of goods will continue to provide impetus for the sector.

New AIM constituent eve Sleep is a good example of how online retailers are benefiting logistics operators. While the company itself focuses on the design and marketing of its mattresses, it passes off the manufacture and delivery of the mattresses to other parties. The process benefits transport and logistics outfits on both fronts. Eve uses different couriers based on the size and weight of the mattress that has been ordered, while its 100 night trial offer provides additional opportunities to transport any returned goods.

The launch of services such as Amazon’s Prime Wardrobe, which allows consumers to try-before-

they-buy and return any unwanted goods for free, will also continue to bolster the industry. Initiatives of this kind are only likely to increase and the additional movement of goods can only be positive for companies specialising in the warehousing and movement of goods.

In such a high growth environment, the sector remains highly fragmented and scope for consolidation is excellent, providing that consumer spending can continue to foster sufficient demand. For now, the industry looks well positioned to keep on trucking.

DIRECTAIM | Q3 2017



AIM TOPS THE TABLES




NOMINATE YOUR NEDS



The strength of UK manufacturing has also provided a boon for logistics companies this quarter. The BDO Sectorwatch share price for manufacturing was up by +6.52% in Q2.

The weak pound has continued to benefit the UK manufacturing sector and helped to somewhat rebalance the economy. For example, the Q2 2017 EEF/BDO Manufacturing Outlook Report highlighted that the significant recovery that has been taking place in manufacturing maintained momentum into Q2. The report also suggested that manufacturers seem confident that the trend will continue into the second half of the year with 28% of respondents saying that they expected to see growth in international orders in the next three months, as opposed to contraction. Interestingly, demand was especially strong in European markets, and on the domestic front, a positive balance of 16% of manufacturers reported an increase in orders, which despite being down from 22%, is still encouraging.


MARKET SPOTLIGHT

At the end of Q2 2017, the Markit/CIPS UK Manufacturing PMI also suggested that manufacturing production increased in June for the eleventh month in a row. A good case-in-point is Fever-Tree Drinks, a producer of premium drink mixers that has successfully ridden the wave of increasing gin sales in the UK while expanding its products into new markets overseas. It recently struck deals with British Airways to serve its tonic water on all flights and for passengers to be able to buy its Naturally Light Tonic Water on easyJet flights.

MANUFACTURING MAINTAINS POSITIVE MOMENTUM

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS



MARKET SPOTLIGHT

LEISURE AND HOSPITALITY WAITS TO CATCH THE NEXT WAVELeisure and Hospitality was at the bottom of the pile in Q2, with the Sectorwatch share price up by only +1.23%. Despite avoiding an overall share price decline, the sector has faced some challenging headwinds.

On the positive side, in April, collective like for like sales for UK bar and restaurant groups were up by +4.4% compared to the same month last year, according to figures from the Coffer Peach Business Tracker. While the result followed a fairly rare fall into the negative in March (-0.5%), the late Easter was a key factor in the two results. However, trading over the four day Easter weekend was significantly slower than the previous year, down by -3.8% on Easter weekend in 2016. Within the data it was clear that restaurant chains bore the brunt of the decline in spend. In May, like for like sales for restaurants and bars combined also slipped into the negative, down by -0.4%. The result raises concerns over a slow-down in consumer spending that is certainly being felt across the broader leisure and hospitality sector.

Challenges for bars and restaurants are manifold and diverse. For example, increases in beer duty, declining alcohol consumption, and competition from cheap supermarket alcohol have weighed on many operators. However, the list goes on, as rising prices for food and drink, rising rents, increased business rates, the introduction of the National Living Wage, and the prospect of depleted staff from EU countries have all inhibited profit margins.

One encouraging upside to the present climate has been the weak pound acting as a magnet for international visitors. The Telegraph reported in June that overseas residents made 3.7m visits to the UK in April, a jump of 19% compared with the same month in 2016, spending £2bn, representing a similar increase.

AIM-constituents such as easyHotel, Peel Hotels and Elegant Hotels Group made hay while the sun shone and have seen healthy share price growth over Q2. For others, the conditions have not lifted share prices significantly. For example, budget accommodation provider, Safestay, has seen its share price flatten off after a positive climb at the end of Q1. Meanwhile the innovative Snoozebox Holdings, a provider of short-term hotel accommodation at events and festivals, and of long-term managed hotel solutions, is on track for future growth. Following a comprehensive strategic business review in 2016, the container accommodation solutions provider has stabilized its operations, and improved its short-term financial stability via successful negotiation with its lender. Having hit its targets for commercial progress in 2017, it has secured new opportunities and is now looking to replicate recent successes in the second half of 2017 and on into 2018.

The continued influx of wealthy, big spending international visitors is likely to provide a much needed boost to the sector and constituents will need to make the most of the opportunities as they arise.

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS



MARKET SPOTLIGHT

Retail was second from the bottom of the pile this quarter, with the BDO Retail Sectorwatch share price growing, but only by +1.41%. AIM is home to a number of highly successful online retailers as well as operators of traditional retail models. However, the sector is coming under a variety of competing pressures; not least fashion retailers who are seeing continued competition from the large supermarkets and from new offerings such as Amazon’s Prime Wardrobe initiative, which launched in June. Since the announcement of the launch, the share price of leading AIM-listed online retailer, Boohoo, reportedly fell by 12%.

Additional pressure is also coming from a slow-down in spending, caused in part by stagnating wage growth and rising inflation. Figures from Barclaycard show that consumer spending slowed to 2.5% in June, as shoppers turned their attention to essentials. The level of spend on “nice-to-haves” is being curtailed by increasing pressure on the purse. Barclaycard noted that there was a 5.9% rise in essential spending, compared with a 1.4% rise in discretionary spending.

RETAIL CONTINUES TO RIDE OUT CHALLENGES

As well as the slow-down in spending, non-store sales growth has also been under pressure. Non-store growth would be expected to run at a +20% like-for-like monthly threshold based on recent years. However, data from the BDO High Street Sales Tracker shows that in 54% of the weeks in Q2, non-store like-for-like sales growth fell below that level. While the record breaking heat in June drew more shoppers out onto the high street, non-store sales melted away.

However, while challenges exist, the share price growth for retail did not fall into the negative this quarter, and the online revolution is still in full swing and generating a number of individual success stories. As we noted earlier, visitor numbers to the UK are also running at record levels, as is visitor spending off the back of the weak pound, so there are still excellent opportunities for retailers. The key will be in competing successfully for the pound in the pocket, managing sales strategically, and in walking the line of acceptable margins in a discount-heavy, fast changing market place.

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


It is well understood that, twelve months on from Brexit, the FTSE 100 has performed strongly, with its large constituency of international companies benefitting from the fall in the value of Sterling. However, what may come as a surprise is that another UK market has strongly outperformed the Main Market of the London Stock Exchange over this period – its junior cousin, AIM.

The key headlines for AIM in the twelve months to June 2017 are

• AIM All Share index increased by 36.3% compared to 12.6% for the FTSE All Share

• AIM total market capitalisation increased by 30% to £93.6bn, the highest since 2007

• Average market capitalisation per company is £97.2m, a record for AIM

• Total fundraising of £4.9bn, up 5% on previous year

• Decline in the number of companies from 1,013 to 963, but the rate of decline is slower than in previous years.

AIM TOPS THE TABLES

MARKET SPOTLIGHT

FTSE All Share AIM All Share

AUG

JUL

SEPT

NO

V

DEC JAN

FEB

2016 2017

0

90

80

70

100

110

120

130

150

140

MAR AP

R

MAY JU

N

SOURCE: BLOOMBERG, VALUES REBASED TO 100 ON 1 JULY 2016

STOCK MARKET INDICES - YEAR TO JUNE 2017

So what is driving this welcome but somewhat unexpected performance for AIM? Are other junior growth markets around the world also seeing similar success? Are there certain sectors that AIM specialises in that are powering its performance? How is the number of AIM companies affecting market perception and performance?

The graph on the following page suggests that other junior markets such as TSX-V in Canada, Alternext in Europe and the Mother Board in Tokyo, have not enjoyed the same degree of success that AIM has seen in the year since the Brexit vote. Their performance (5% increase for TSX-V, 15% for the Mother Board and 20% for Alternext) were broadly in line with the FTSE 100 (12% increase) but were substantially lower than AIM, which increased by 36%.

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


TSX-V Alternext AIM All Share FTSE 100 Tokyo Mother Board

AUG

JUN

JUL

SEPT

NO

V

DEC JAN

FEB

2016 2017

0

90

80

70

100

110

120

130

150

140

MAR AP

R

MAY JU

N

SOURCE: BLOOMBERG, VALUES REBASED TO 100 ON 1 JULY 2016

COMPARISON OF STOCK MARKET INDICES

AIM’s status as the most successful international market for growing companies means that it probably has more international companies than growth markets on other exchanges, so the fall in Sterling may have had a disproportionate boost but this does not explain its outperformance of the FTSE 100. Although there may be specific regional factors affecting the other junior markets, it would appear, on the face of it, that the SME status of AIM companies is not a key factor in AIM’s success over the last 12 months. So what other factors are contributing to AIM’s strong recent performance?

There has certainly been a period of consolidation over a number of years in the number of companies on AIM. At 30 June 2017, there were 963 companies on AIM the lowest number since 2004. This reduction has largely been due to the departure of smaller, illiquid companies and so the market has seen a corresponding increase in the proportion of larger companies. This is shown by a comparison of the spread of market value of companies, in percentage terms, at June 2017 compared to June 2012.

MARKET SPOTLIGHT

AIM TOPS THE TABLES CONTINUED

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


Jun 2017 Jun 2012

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0-5 5-10 10-25 25-50 50-100 100-250 250+

SOURCE: LONDON STOCK EXCHANGE

£m market capitalisation

PROPORTION OF AIM COMPANIES BY MARKET VALUE

MARKET SPOTLIGHT

The most dramatic change has been the reduction in micro companies (smaller than £5m market capitalisation) which have declined from 24% of the market to 18% and the notable increase from 12% to 22% in the proportion of companies over £100m market capitalisation. This trend has improved the perception of the overall quality of AIM listed companies, despite the headline reduction in company numbers.

However, this trend is not just a recent phenomenon, so it is hard to credit it as a major contributor to AIM’s recent impressive performance, although it has no doubt helped.

Are there any particular sectors that AIM is particularly strong in that have driven this success? Well, here we may find the answer, as some of the key sectors for AIM have performed particularly strongly.


DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


MARKET SPOTLIGHT

The largest sector on AIM is natural resources and it is this sector index that has increased the most in the year to June 2017, an impressive 50.9%. The third largest AIM sector, technology & media, was the third best performer, with its index increasing by 37.2%. At the other end of the scale, the two worst performing sectors over this period, transport & logistics (10.5% increase) and hospitality & leisure (13.3% increase), are among the smallest sectors on AIM. As a result, the performances of natural resources and technology & media have had a disproportionately large effect on AIM’s overall performance.

It should be noted that even the lowest performing sector, transport & logistics, recorded double digit growth, so every sector would appear to have contributed to AIM’s recent success.

In conclusion, there does not appear to be any one overwhelming factor that has contributed to AIM’s excellent performance over the past year. The mix of AIM companies in top performing sectors is a key factor but the consolidation in the market over a number of years has also helped the perception of overall quality in the market and the fall in the value of Sterling has boosted the earnings of AIM’s international contingent. Regardless of the reason for the growth in its market value, AIM is now in a strong position to attract new companies and therefore reverse the decline in the number of AIM listed companies, the one negative statistic that clouds the overall perception of AIM’s progress.


DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


BEST PERFORMING SECTOR INDICES ON AIM – YEAR TO JUNE 2017

RETAIL 43.4%

TECHNOLOGY & MEDIA

37.2%

NATURAL RESOURCES

50.9%

COMPANY FOCUS

Oxford Metrics Group is an AIM listed company operating in the technology sector, and a market leader in developing and marketing analytics software for motion measurement and infrastructure asset management.

Consisting of two companies, Vicon and Yotta, the group was founded in 1984 in Oxford by current deputy chairman Julian Morris through a management buy-out from Oxford Instruments Group. It still has its headquarters in Oxford but is now a truly global concern with offices in Leamington Spa, Gloucester, California, Colorado and Auckland and clients spread across over 70 countries worldwide.

OXFORD METRICS

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


COMPANY FOCUS CONTINUEDSO WHAT DO THEY DO?They help highways authorities manage and maintain their road networks, hospitals and clinicians decide on therapeutic strategies and Hollywood studios to create stunning visual effects.

The primary product when the company started in 1984 was the Vicon system which analyses human motion by tracking reflective markers attached to a person.

Vicon has since grown to become the world leader in high precision movement analysis, supplying motion measurement software and hardware used in a wide range of applications such as analysing the gait of children with cerebral palsy, examining athlete’s performance, creating visual effects in Hollywood blockbusters and the production of best-selling video games.

One recent example of their work was the creation of realistic digital doubles in the latest Kingsman spy action movie starring Colin Firth, Mark Strong and Halle Berry.

The other company, Yotta, operates in infrastructure asset management. Clients include central and local government and other infrastructure owners working in highways, street

lighting, street works, waste and utilities. Their range of 10 software products, the majority of which are provided on a cloud-based SaaS (Software as a Service) model, helps optimise the management of infrastructure assets.

Yotta most recently launched Alloy, connected asset management software which makes it simpler for highways and other asset owners to manage vast volumes of data, enabling them to explore and leverage data in real-time and harness the resulting insight to make better decisions.

THE ROLE OF AIMIn April 2001, the firm listed on AIM, raising £5.3m after expenses. After several years of self –funded profitable growth, the AIM IPO was part of a plan to raise new investment to help take the business forward.

The main focus of the plan was to generate organic growth, driven by a substantial increase in overhead to be invested over a planned 2-year cycle. Much of this investment was made in new product development, worldwide sales, marketing, and customer support. The injection of cash resulting from the placement was applied principally to four specific areas: additional staff, subcontracted and out-sourced costs, marketing and working capital.

It has been excellent working with Oxford Metrics

over the years and seeing how their application of technology has helped them and their customers achieve success. Our team at BDO looks forward to supporting the business as it continues to develop and realise its strategic ambitions through its next phase of growth.CHRIS POOLES PARTNER AT BDO

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


COMPANY FOCUS CONTINUEDSTRATEGY FOR THE FUTUREThe company sold their defence software business, 2d3, to Boeing in 2015 which has enabled them to focus on growth opportunities within their two clearly defined businesses, Vicon and Yotta.

They developed a five-year growth plan, following a detailed strategy review during 2016, resulting in the objective of tripling recurring revenues and doubling profits. Although the two companies share a focus on analytics, they have developed with different economics and address different markets with their own customers and competitors. Their strategy reflects the specific needs of each operation with targeted investments aimed at accelerating growth.

Vicon makes a range of highly sophisticated and extremely accurate motion capture software tools supported by some proprietary measurement sensors and specialist cameras. These systems are generally purchased as capital goods and tend to be skewed towards the end of the financial year resulting in peaks and troughs in sales. Sales can also be affected by market factors such as changing government policies on university funding and cycles in the entertainment world.

The Vicon strategy is to even out these sales fluctuations by continuing to enter adjacent marketplaces. This will often require product development to customise the existing products along with investment in market development activities.

The company believes there is a wide and growing range of applications for their motion capture tools which will help to drive growth, in particular:

• Medical applications where therapists model the movements of people who have disabilities, or have suffered injuries, to help them improve their mobility

• Sports coaches use the systems to assess and improve the performance of athletes

• Researchers use the systems to better understand the biomechanics of animal movement, including horses and even kangaroos

• Aero engineers use the systems to design and manufacture the latest commercial aircraft and quadcopter drones

• Content production companies use them to capture the motion of human actors to drive the movement of characters in films, television shows, theatre and video games.

This will be achieved for Yotta by focusing resources on reaching new geographical markets and expanding the capabilities of their software to solve more problems for customers in more integrated ways, whilst continuing to strengthen and grow the Vicon business.

Whilst the group’s main focus is organic growth, they will consider acquisition opportunities where there is a strategic rationale to strengthen Vicon and Yotta and to leverage technical and/or market expertise

The 5 Year strategic plan published in 2016 has

brought clarity for investors and purpose to the team at Oxford Metrics on our quest to improve the quality of earnings and deliver total shareholder return. The business has entered a new era with world leading solutions in the markets we serve and a growth trajectory that will deliver a doubling of profits and tripling of recurring revenues by 2021. Our experience on AIM has been positive, the market has helped with generating financing and has attracted a broad register of supportive investors who share our desire to see Oxford Metrics grow and become a successful and a truly global business. DAVID DEACON CFO, OXFORD METRICS GROUP

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


They intend to invest £1.9m in Yotta during FY17 on additional people in sales and marketing and R&D. Yotta has enjoyed success in Germany, the Netherlands and Australia and will actively invest in new sales staff to grow those territories, and other regions, through direct and indirect channels.

They will prioritise the order in which they enter each geographical market, based on a wide variety of factors. But in each instance will partner with local distributors who can bring market access, enabling Yotta to cost effectively reach a relatively large number of geographies.

They plan to hire additional in-house software developers to produce products delivering real benefit to users and to help establish Yotta as an innovator in the asset management market. They will look to develop new products that

reflect changing client demands for services which are cloud-based and constantly updated, capturing all the benefits of the mobile internet and provide more data driven insights.

The availability of data is also changing. Where their clients would have once relied upon periodic inspections or surveys, they now have the chance to use online sensors and smart-devices to constantly monitor the state of their asset base to help them make better, faster decisions. Yotta provides the repositories for that information and the tools to allow the user to make optimised decisions about that asset.

Over the past 33 years the firm has used cutting edge technology to provide fascinating solutions to analytical challenges in various industries which has driven their growth resulting in a successful and profitable company.

They now have a clear vision of where the company is going and a strategy in place to ensure they meet their objectives. It will be fascinating to watch them over the next few years to see where their development takes them, and of course which movie stars are animated using their products.

COMPANY FOCUS CONTINUED

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


REPORTING & GOVERNANCE

The London Stock Exchange (LSE) recently published a Discussion Paper seeking feedback on a broad range of proposals designed to support the AIM market’s future development. The key questions in the Discussion Paper covered AIM admission as well as on-going obligations:

• Formalising the early notification process: whether nominated advisers (NOMADS) should be required to submit an early notification letter to the LSE setting out key information on the company and its proposed admission. This is considered an extension and codification of the existing early notification process and is intended to enable the Exchange to identify and raise issues earlier in the AIM admissions process.

LONDON STOCK EXCHANGE CONSULTS ON PROPOSED CHANGES TO THE AIM RULES

• Guidance on when the LSE may exercise its AIM Rule 9 powers: introducing a non-exhaustive list of the types of issues that NOMADS should take into account when assessing the appropriateness of a company for admission to AIM and which may lead to the LSE exercising its power to refuse admission or impose conditions on admission.

• Free float: the LSE has a qualitative approach to the minimum threshold for a free float but it is seeking views on whether it should introduce a quantitative assessment for minimum free float and, if so, what that threshold should be.

• Minimum fundraising: whether there should be a minimum fundraising threshold for new applicants and if it should apply to both revenue and non-revenue generating companies.

• Corporate Governance: whether the current approach to corporate governance, both in terms of rules imposed (e.g. numbers of non-executive directors and independence) and disclosure requirements (currently set out in AIM Rule 26), are appropriate and whether AIM companies should be required to comply with a specified corporate governance code.

• Standards of conduct and approach to non-compliance with the AIM Rulebook: the LSE also intends to review its supervisory powers and sanctions policy and plans to issue a consultation paper later in the year on proposed changes to the AIM Disciplinary Procedures and Appeals Handbook.

The consultation is now closed and detailed proposals are being developed and will be published for further consultation. We will share the content of this as soon as they are available.

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS



The rules that extend the People with Significant Control Regime (PSC Regime) to AIM-listed companies came into force on 26 June 2017. The PSC requirements can be complex to navigate and affected companies are advised to take appropriate legal advice to ensure that they are in compliance. The PSC Regime, introduced into UK law last year, requires most companies to:

• Take reasonable steps to find out if there is anyone who is a ‘registrable person’ or ‘registrable relevant legal entity’ in relation to the company and, if so, to identify them

• Keep and maintain a register of its People with Significant Control (PSC Register)

• Supply information about its People with Significant Control to Companies House.

PSC REGIME EXTENDED TO AIM-LISTED COMPANIES

REPORTING & GOVERNANCE CONTINUED

An exemption for companies that are required to comply with DTR 5 (which includes AIM-listed companies) has been removed as a result of the UK’s implementation of the 4th Money Laundering Directive, meaning such companies are now required to apply the PSC rules in the same way as private or unlisted public companies. The only companies that remain exempt from the PSC Regime are those whose voting shares are admitted to trading on a regulated market in an EEA state (e.g. listed on the Main Market of the London Stock Exchange) or on certain other specified overseas markets. Subsidiaries in groups headed by exempt companies have always been within the scope of the PSC Regime.

At the same time as the scope of the PSC Regime was extended, stricter time limits for updating the PSC Register and more frequent Companies House filing requirements were introduced. Entries must be made or updated in the PSC Register within 14 days of the company receiving the relevant information and must be notified to Companies House within a further 14 days. Previously, this information was only required to be submitted to Companies House on an annual basis.

The PSC Regime can become very complex to navigate and affected companies are advised to take appropriate legal advice to ensure that they are in compliance.

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


If you feel your non-executive directors are doing a great job why not nominate them for the 2018 Non-Executive Director Awards which recognise the achievements of non-executive directors within the business and not-for-profit community. The awards focus on how the advice and experience of non-executive directors can transform organisations and help deliver long-term success and growth. BDO is delighted to once again sponsor the AIM category of the awards.

There are seven award categories, including one for AIM listed companies:

1. FTSE 100

2. Not-for-Profit/ Public Service Organisation

3. FTSE AIM

4. FTSE All Share

5. Private/Private Equity backed

6. Lifetime Achievement

7. NED to watch

ARE YOUR NON-EXECUTIVE DIRECTORS THE BEST?

ENTERING THE ANNUAL NON-EXECUTIVE DIRECTOR AWARDSBy entering the awards, you will raise the profile of your organisation, helping to distinguish yourselves from your competitors, and providing a great boost to your hard working non-executive directors. The awards also provide a great opportunity to network with NEDs from shortlisted and winning companies, along with making other useful business contacts.

Below is an outline of the awards process:

• Nominations are made in the autumn

• Cranfield University reviews the nominationsand produces a shortlist which is announcedin the Sunday Times in February

• The judging panel, which includes ScottKnight, Head of Audit & Assurance at BDO,interviews the shortlisted candidates

• The awards ceremony takes place in Marchat the Claridge’s Hotel in London when thewinners will be announced

• All winners are profiled in the Sunday Times.


DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


Despite some recent signs of ‘progress’, the Brexit negotiations have a long way to go yet. While the final details of the UK’s exit terms remain uncertain, the one certainty about the UK’s decision to leave the European Union is that it will trigger fundamental changes in the way organisations do business.

There is the potential for boundaries to be resurrected between the UK and our nearest trading partners, where none have existed for over 30 years. These could create additional costs and will introduce friction into businesses’ supply chains and sales operations, whilst also having the potential to reduce access to the skills they require. Businesses must begin preparing now so that they can adapt quickly to the new environment as it evolves.

Those businesses that can react in an agile and well planned way will be best placed to succeed. As well as issues to be managed, there will be new opportunities to take advantage of – particularly from any new trade agreements that the UK may be free to negotiate once it is no longer part of the EU.




PRACTICAL STEPSDespite the uncertainty, there are some

practical steps that businesses can take now to prepare for Brexit. We have created a

free tool that helps you identify the tax issues your business should be focusing

on. On answering six short questions you will be sent a personalised report and you will have taken the first step in your Brexit planning: visit www.bdo.co.uk/start-brexit-planning.

Those areas highlighted should be investigated to understand if and

when you should be taking practical steps to safeguard your business and

prepare for any opportunities ahead of March 2019. You can find more background

on Brexit tax issues in our Brexit Planning Guide or get in touch with your usual BDO contact.

DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


DIRECTAIM | Q3 2017




AIM TOPS THE TABLES




NOMINATE YOUR NEDS




AIM TOPS THE TABLES




NOMINATE YOUR NEDS


DIRECTAIM | Q3 2017





AIM TOPS THE TABLES




NOMINATE YOUR NEDS


HB0

0967

0

CONTACTFOR MORE DETAILS PLEASE CONTACT:

LONDON AND SOUTH EAST

ANDY VINER Technology & Media +44 (0)20 7893 2373 | [email protected]

GERAINT JONES Real Estate and Construction +44 (0)20 7893 3512 | [email protected]

DOMINIC STAMMERS Consumer Markets +44 (0)20 7893 2471 | [email protected]

VANESSA BRADLEY Financial Services +44 (0)20 7893 2398 | [email protected]

SCOTT MCNAUGHTON Natural Resources +44 (0)20 7893 2371 | [email protected]

EAST ANGLIA

NICK BUXTON+44 (0)1603 756 916 | [email protected]

EAST MIDLANDS

GARETH SINGLETON+44 (0)115 962 9280 | [email protected]

GATWICK & GUILDFORD

ANNA DRAPER +44 (0)1293 848 952 | [email protected]

GUERNSEY

JUSTIN HALLETT+44 (0)1481 746 066 | [email protected]

MIDLANDS

TOM LAWTON +44 (0)121 352 6372 | [email protected]

NORTH EAST

MARK LANGFORD +44 (0)113 204 1227 | [email protected]

NORTH WEST

GARY HARDING +44 (0)161 833 8303 | [email protected]

READING

SIMON BROOKER +44 (0)118 925 4488 | [email protected]

SCOTLAND

ALASTAIR RAE +44 (0)131 347 0349 | [email protected]

SOUTH WEST

ANDREA BISHOP +44 (0)117 930 1579 | [email protected]

SOUTHAMPTON

MALCOLM THIXTON +44 (0)23 8088 1895 | [email protected]

This publication has been carefully prepared, but it has been written in general terms and should be seen as containing broad statements only. This publication should not be used or relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained in this publication without obtaining specific professional advice. Please contact BDO LLP to discuss these matters in the context of your particular circumstances. BDO LLP, its partners, employees and agents do not accept or assume any responsibility or duty of care in respect of any use of or reliance on this publication, and will deny any liability for any loss arising from any action taken or not taken or decision made by anyone in reliance on this publication or any part of it. Any use of this publication or reliance on it for any purpose or in any context is therefore at your own risk, without any right of recourse against BDO LLP or any of its partners, employees or agents.

BDO LLP, a UK limited liability partnership registered in England and Wales under number OC305127, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. A list of members’ names is open to inspection at our registered office, 55 Baker Street, London W1U 7EU. BDO LLP is authorised and regulated by the Financial Conduct Authority to conduct investment business.

BDO is the brand name of the BDO network and for each of the BDO member firms.

BDO Northern Ireland, a partnership formed in and under the laws of Northern Ireland, is licensed to operate within the international BDO network of independent member firms.

Copyright © November 2017 BDO LLP. All rights reserved. Published in the UK.

www.bdo.co.uk

Date post:	16-Oct-2021
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

INTRODUCTION MARKET COMPANY REPORTING AUTUMN 2017

Documents