Southampton Leisure, owner of Southampton Football Club, yesterday became the latest company to quit the main stock market in favour of a listing on the Alternative Investment Market.
"The administrative burden of being a fully listed company is too much for a business with a market capitalisation of £11m - it is just too onerous for us," David Jones, finance director of Southampton, said yesterday. He said the company would be able to save between £30,000 and £50,000 a year by moving on to AIM.
AIM was set up in 1995 as a market for fledgling companies seeking capital to grow their businesses, but a number of established companies - including the nightclub owner Springwood, the software company Touchstone and the retailer Monsoon - have announced plans to move from a main listing to AIM.
The alternative market has a less stringent regulatory regime than the main market and lighter rules for acquisitions. Shares in AIM stocks also have more favourable capital gains tax treatment as they are not classified as quoted securities.
Southampton listed on the London Stock Exchange in 1997 and used the main market listing to raise money for a new stadium. "It was a help to get funding, but we don't need it now and compliance with the rules is just too demanding," Mr Jones said.
He said the trading volumes of the company's shares were very low, and AIM would still provide liquidity for its stock.
The move came as Southampton Leisure posted a full year loss of £500,000, from a profit of £3.3m last year, after it bought more players for the club.
Companies do not currently have to get permission from their shareholders to change the market on which they list, but Mr Jones said Southampton had spoken to its larger shareholders and they were supportive of the move.
AIM stocks are regulated by the London Stock Exchange and do not come under the rules of the UK listing authority, which is part of the Financial Services Authority.Reuse content