The number of companies listed on the London main market and Alternative Investment Market dropped 12.5% over the three years to May 2022, according to a new report from the Quoted Companies Alliance, implicating various aspects of the UK economy.
Excluding investment companies and international companies whose London quote was secondary, 1,180 companies were listed on the LSE as of the last day of trading in May 2022, down from 1,349 in May 2019.
Of all companies within these markets, 91% were small- and mid-caps, with a collective market capitalisation of £376bn.
According to the QCA, employment data from 2021 revealed AIM and main market quoted companies employed 5.9m staff, of which 2.2m were employed by small- and mid-caps, representing over 75% of the workforce of all quoted companies across several UK regions.
From a tax perspective, small- and mid-caps contributed £25.1bn in taxes in the year 2020-2021, worth approximately 5% of total corporation, income, national insurance and VAT.
In May 2019, there were approximately 1,249 small and mid-sized quoted companies, employing over 3m people and contributing £26bn in tax revenue.
Listings are crucial to enabling competition and innovation, QCA said. The firm stated that net reduction in quoted companies was due largely to economic turbulence over the last few years, from Brexit to Covid-19.
«Small and mid-sized quoted companies continue to be a driving force in the UK’s economy. They have been long-term over performers in terms of productivity, employment, growth and tax contributions. These strengths, however, should not be taken for granted,» said Tim Ward, QCA chief executive.
«The public markets have seen a trend of decline for nearly two decades. We cannot expect the economic contribution of these companies to continue in an environment that does not make their existence attractive. For that reason we are continuing to campaign for fit-for-purpose capital markets and proportionate regulation to make the UK the most attractive place to list and invest,» he added.
The number of companies floating on the LSE also fell drastically in the first half of 2022, with just 26 companies debuting, marking a 45% decline compared to the first half of 2021. The UK was not alone. Global IPO activity was poor, with the number of deals falling to 46%.