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2013: A good year to take AIM

Last updated: 01:16 03 Jan 2014 AEDT, First published: 02:16 03 Jan 2014 AEDT

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It could be argued that 2013 was the year AIM, London’s junior market, grew up.

Helped by changes to legislation, enabling investors to wrap AIM shares in their individual savings accounts (ISAs), the AIM All-Share index rose 19% in 2013, outperforming the FTSE 100 index, which rose 14%.

While Footsie’s best performer on the year, airline IAG (LON:IAG), managed to double its share price in 2013, there were scores of AIM stocks that bettered that, with four stocks racking up gains in excess of 500%.

Top of the tree was Coms (LON:COMS), the cloud-based telephony specialist. Shares rose a staggering 950%, with the rapid ascent starting in April on the back of a big contract win with outsourcing firm MITIE (LON:MTO); “big” in the context of Coms being £15mln, which is not bad for a company with projected annual revenues of £11.3mln.

The top line is tipped to rise to £41.2mln in the year to 31 January 2015 and that, if broker forecasts are to be believed, will lift the company into profit for the first time.

More or less tying with Coms for top spot is Rare Earth Minerals (LON:REM), which saw its shares take off after encouraging final results from a drill programme on the Fleur-El Sauz lithium project, in northern Mexico.

Significant lithium values were intersected in the two targeted areas: the upper and lower clay units.

Having hit a peak of 1.503p on 29 August, the shares drifted steadily lower over the final three months of the year despite another price spike in December after another encouraging drilling result in Mexico. The shares currently trade at 0.598p.

Crowd-sourcing trailblazer blur Group (LON:BLUR) appears to be aptly named; since floating in October 2012 at 82p the shares have risen faster than the eye can register, and now trade at 584.25p. All of the explosive growth came in 2013, with the shares rising 634% as the market got its head round blur’s business model and the way the company is reinventing what it calls services commerce, or s-commerce for short.

A succession of milestones were passed by the group during the year, with the interval between them getting shorter each time. In October, the group announced that its Global Services Exchange had been used 3,000 times by customers.

The value of projects submitted to the exchange, which allows customers to outsource almost any task, had exceeded US$70mln by the end of October. By mid-December, that figure had risen to US$104mln.

The crowd-sourcing company took four years to reach the 1,000 briefs mark, another year to achieve 2,000, and less than six months to reach the 3,000 project milestone in a testament to its growth profile.

Another ground-breaking technology firm that saw an eye-popping rise in its share price was Seeing Machines (LON:SEE), the developer of a driver safety system, which uses eye-tracking technology to monitor fatigue.

The technology has been gaining traction in the mining sector and the market really began to sit up and take notice in May, when the system was picked up by the mining truck division of earth-moving equipment giant Caterpillar.

Shares received another boost in August from better than expected full-year results, while in December the company opened up a whole new market with its first agreement with a coach fleet operator, Royal Beuk.

Seeing Machines’ share price is up 306% over the last year, meaning it ranked just outside the top 10 risers on AIM for the year.

Squeezing in at number 10 is specialist engineering firm Hayward Tyler (LON:HAYT), up 316% on the year.

The company returned to the black in 2013, notching up a profit before tax of £2.4mln in the 15-months to 31 March. In its subsequent half-year results the company announced its intention to resume dividend payments, with the decision underpinned by the group’s growing order book.

Of course, not all AIM shares enjoyed a good year and one of the reasons that AIM stocks were excluded for so long from ISAs was because of the perception that the market is for high risk/high reward shares.

In particular, the resource stocks that up until recently dominated AIM can be the personification of feast or famine, and there was certainly a smattering of oil and mining stocks down among the laggards, but perhaps the most high profile duffer was pawnbroker Albemarle & Bond (LON:ABM).

The company put itself up for sale after expanding too fast on the back of a soaring gold price. Shares plunged from over 200p to 17.75p by the end of the year.

Management is continuing takeover discussions with "a number of interested parties". Names suggested as possible bidders have included 30% shareholder EZCORP, rival UK pawnbroker H&T (LON:HAT) and other private equity firms, but the company has not named the interested parties.

If you pawned your most prized possession to buy Albemarle & Bond shares at the end of 2012, you have my deepest sympathies.

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