SMALL CAP MOVERS: AIM traders breathe sigh of reduction after Budget

The junior market breathed a sigh of relief this week after Labour Chancellor Rachel Reeves confirmed that an inheritance tax (IHT) exemption on AIM stocks is here to stay.

Well partially anyway. Reeves slashed the IHT exemption, which is currently worth 40 per cent, down to 20 per cent.

There were fears leading up to her debut Budget that the exemption would be removed entirely, so the softer touch taken by the Chancellor was a sweet enough pill for the market to swallow.

The AIM All-Share index surged from 718 to 744 immediately following the Wednesday Budget announcement and closed the week 2 per cent higher.

Beneficiary: Analysts highlighted that the government’s commitment to social housing development aligns with Galliford Try’s portfolio of public and regulated-sector projects

According to analysts at brokerage Panmure Liberum, Galliford Try Holdings plc is a likely beneficiary of Reeves’ Big-State Budget, which included a substantial £24.6billion boost in capital investment.

Analysts highlighted that the government’s commitment to social housing development aligns with Galliford Try’s portfolio of public and regulated-sector projects.

The government also earmarked £6.6billion for education investment for 2026, with £1.4billion set aside for rebuilding over 500 schools, which Panmure Liberum also expects Galliford Try to benefit from.

Gaillford Try’s shares closed the week 6 per cent higher at 390p per share.

For green fertiliser producer Atome plc, it was far from the worst Budget for the junior market.

Olivier Mussat, chief executive of Atome, stated: ‘Even with the reduction to inheritance tax exemption, AIM will still offer a unique way for investors to support homegrown, early-stage UK companies such as Atome – the only UK-listed green fertiliser producer.

‘The recent speculation on tax changes has impacted share prices but now the market has certainty, I expect we will soon see a recovery.’

North Sea windfall tax hikes announced in the Budget did nought to dissuade investors in North Sea oil exploration company Jersey Oil and Gas plc, whose shares rolled up 38 per cent this week.

Numerous other energy companies made handsome gains too, including United Oil & Gas plc, which added 33 per cent, and Orcadian Energy plc, which added 30 per cent.

In the alternatives space, hydrogen storage investor EnergyPathways plc rallied more than 20 per cent, reflecting Reeves’ announcement that the UK’s clean energy sector will benefit from £3.9billion of funding in 2025‑26.

This briefly spurred shares in green hydrogen electrochemical specialist Ceres Power Holdings plc into action too. Ceres immediately bounced 8 per cent higher following the announcement, although a sharp retracement followed suit.

Not all energy companies had decent week though.

Tlou Energy Ltd shares fell 45 per cent following a quarterly activities report. Its cash position of A$944,000 (£480,000) likely spooked investors.

Tlou’s mentioned that its largest shareholder is willing to provide a loan facility to the Company up to A$5million to support its gas-production operations.

Mosman Oil & Gas, which published its full-year results this week, fell 23 per cent. Chief executive Andy Carroll hailed a ‘significant year’ for Mosman as it aims to start drilling at its helium projects before the end of 2024.

Other energy fallers included Empyrean Energy plc, which fell 17 per cent and Europa Oil & Gas, which was off 12 per cent.

AIM-listed translation and localisation services provider RWS Holdings tumbled 15 per cent on Tuesday as it cautioned sales would be flat in the current twelve months marking two years of static revenues.

RWS managed to stage a recovery later in the week, but shares failed to escape the red zone come Friday.

In the tech space, shares in semiconductor wafer specialist IQE plc slumped 20 per cent after announcing that chief executive Americo Lemos had left the company with immediate effect.

IQE has been trading lower in recent weeks following a warning that trading performance will be worse than expected this year.

Touchstar plc also warned on profits. The mobile data solutions provider’s shares dropped 12 per cent after the company announced that its 2024 revenue is likely to fall below previous forecasts due to delayed orders and slower conversion times.

Finally, the AIM delisting of the week was brought to you by Eckoh plc. The board agreed to a takeover by private equity suitor Bridgepoint for a total value of £169.3million.

The AIM-listed payment solutions provider, which has been looking for a deal since last year, has been mulling the offer since August.

Shares surged 24 per cent following the announcement.