SMALL-CAP MOVERS: Cash crunch seems to be easing for growth companies

Almost every small-cap company depends on one essential ingredient. Not oil, electricity or software. Cash.

Confidence in the sector can often be gauged by the amount of new investment raised. On that measure, May has been a standout month, with more than a dozen new fundraisings launched.

It reflects a growing expectation of a rebound, or what the professionals term a more ‘risk-off’ stance towards UK growth stocks. This follows a three-year drought that forced many businesses off AIM or into collapse for lack of capital.

Helping drive sentiment is an 18% rise in the AIM All-Share index since early April. That bounce, from a low base, follows the turbulence triggered by President Trump’s trade policy.

Gettting bigger

From the latest wave of share issues, another trend is emerging: the ask is getting bigger. While the early part of 2025 featured micro-fundraisers at steep discounts, recent weeks have seen those discounts narrow and raise sizes increase.

Earlier this week, solid-state battery specialist Ilika PLC (AIM:IKA, OTCQX:ILIKF) had to trim the price just 2.9% to bring in £3.3 million. Drug developer Poolbeg Pharma PLC (AIM:POLB) priced its new shares at a 12% discount and is on course to raise nearly £5 million.

Neither business needed emergency cash. Both had clear plans to develop technology and build value. And investors backed that vision.

More broadly, the AIM All-Share rose 1.1% to 739, slightly outperforming the FTSE 100.

Norman Broadbent gained 45% after telling shareholders its second-quarter performance was “materially ahead” of last year. Shares in TheWorks.co.uk jumped 39% on news that earnings would beat expectations, driven by strong fourth-quarter trading and steady margin growth.

But it was not all good news

Totally PLC (AIM:TLY) warned that its shares could be worthless. It said selling subsidiaries was the only realistic option to meet short-term liabilities. 

While deals are expected before further funding is needed, directors warned proceeds may fall short. “There could be no value in the ordinary shares,” the company said. The shares dropped 74%.

Ascent Resources PLC (AIM:AST) fell 38% after unveiling a £1.35 million fundraising tied to a discounted acquisition of gas assets in Colorado and Utah.

Dianomi PLC (AIM:DNM) lost 19% after flagging a slow start to 2025, citing macroeconomic pressures, weak advertiser budgets and traffic volatility. Despite securing new publishing deals with CNN and the Associated Press and partnering with Microsoft Monetise, first-half revenue is expected to lag last year.

Shoe Zone PLC (AIM:SHOE) fell 18% after swinging to a loss and warning on cost pressures. It posted a pre-tax loss of £2.3 million for the six months to 29 March, against a £2.6 million profit a year earlier. 

Revenue down

Revenue fell 6.5% to £71.5 million as store numbers dropped by 31 to 278. Digital sales rose 6.4% but failed to offset the impact of physical closures.

Finally, in a market that rarely offers second chances, Creo Medical Group PLC (AIM:CREO) may be building a case for one. The surgical endoscopy company reported a 74% rise in core product revenue to £4 million, driven by the uptake of its Speedboat UltraSlim device, now used in more than 3,000 procedures. 

Cavendish maintained its 70p target and said the £45 million market capitalisation understates the technology’s value. The shares closed the week up 19% at 13p.