Costs of Aquis exchange ‘disproportionate’ to benefits, says listed tech firm – UKTN

A Lancaster-based manufacturer of tech products for the maritime industry has proposed delisting from the Aquis exchange amid concerns that it does more harm than good. 

OTAQ, which was listed on the London-based challenger stock exchange in 2018, warned that the share price volatility, limited flexibility and limited access to investors were harming the business. 

“The board has concluded that the continued admission to trading of the Ordinary Shares on the AQSE Growth Market is not appropriate and, accordingly, the cancellation and re-registration are in the best interests of the company and shareholders as a whole,” said the company. 

The move makes OTAQ the latest tech firm to have its shares delisted from the stock market in the past year, following a similar decision from Quantum Exponential in October and C4X Discovery in March.

London’s Alternative Investment Market (AIM) has seen 92 companies delist in the past year, bringing the total to 695, a 23-year low, according to analysis by UHY.

A major part of the issue, according to the OTAQ board, is the cost, time and regulatory “burden associated with maintaining the company’s admission to trading” on the Aquis exchange. The board said these burdens were “disproportionate” to the benefits of its listing “particularly given the limited and inconsistent liquidity” in its shares. 

The company projected it would save us as much as £1.2m annually from the reduced regulatory costs. 

Shareholders will vote on the proposal to cancel trading at the next general meeting, set for 10 December. If approved, the cancellation will take effect by the end of the month. 

Chancellor Rachel Reeves earlier this month unveiled major plans for pension reform in the UK, raising hopes for a revival of the London Stock Market as well as increased investment in the tech sector.

According to a government analysis, UK pensions’ share of equities held domestically is around 8%, lower than the equity share held domestically in Canada (22%), New Zealand (42%) and Australia (45%) .

Backed by funding from the European Commission, OTAQ develops tech products to support the fishing and offshore energy – both renewable and oil and gas – industries. 

This month, the group posted its accounts for the year ended December 2023, during which its operating cash flow fell from a £5.2m profit in 2022 to a loss of £389,000. 

OTAQ’s share price at the opening of the markets on Tuesday was 0.25p, a 95% drop from its peak in 2023. 

The decision paints a grim picture for the prospects of small to medium-sized tech firms interested in a UK public listing. 

Founded in 2012, the Aquis Exchange announced earlier this month that it had agreed a deal to be acquired by the Zurich-based market infrastructure group Six, in a deal valuing it at £207m. 

Already have an account? Log in