OTAQ has announced its intention to delist from the Aquis Exchange, citing several key concerns.
- The company argues that the costs and regulatory burdens of maintaining its listing outweigh the benefits.
- OTAQ is the latest in a series of tech firms choosing to leave the UK markets this year.
- A general meeting set for December 10th will determine the final decision through shareholder voting.
- The potential delisting reflects broader issues facing smaller tech firms in the public market.
The board of OTAQ, a maritime technology group based in Lancaster, has advanced a proposal to delist from the Aquis Exchange, expressing concerns over the adverse effects on the company’s operations. Established on the London-based exchange in 2018, OTAQ has faced challenges such as significant share price volatility and limited investor access. “The board has concluded that continuing to trade on the AQSE Growth Market is untenable,” stated the company, emphasising that this move serves the best interests of both the company and its shareholders.
Over the past year, the trend of tech firms departing from public markets has intensified, with OTAQ following similar decisions by Quantum Exponential in October and C4X Discovery in March. This trend coincides with a broader exodus from London’s Alternative Investment Market (AIM), where 92 companies have delisted, reducing the total to 695, the lowest in 23 years according to UHY analysis.
The primary issues highlighted by OTAQ revolve around the costliness, time-intensive nature, and regulatory rigours associated with remaining listed on the Aquis Exchange. The board described these elements as “disproportionate” compared to the advantages of such a listing, particularly pointing out the inconsistent liquidity in shares. The firm anticipates saving approximately £1.2 million annually by alleviating regulatory costs if the delisting proceeds.
Shareholders are positioned to cast their votes on this proposition during a meeting scheduled for December 10th, with the potential cessation of trading operations by the month’s end if approval is granted. This strategic move comes in the wake of recent announcements by Chancellor Rachel Reeves regarding major pension reforms aimed at rejuvenating the London Stock Market and bolstering tech sector investments. Despite these strategic intentions, UK pensions hold a mere 8% domestic equity share, significantly lower than nations such as Canada, New Zealand, and Australia.
Backed by the European Commission, OTAQ develops products for the fishing and offshore energy sectors, both renewable and fossil fuels alike. Recent financial disclosures for the year concluding in December 2023 revealed a downturn from a profit of £5.2 million in 2022 to a loss of £389,000. Moreover, the firm’s share price opened at 0.25p on Tuesday, representing a steep 95% decline from its peak within the same year. This data underscore the difficulties facing smaller-scale tech enterprises aspiring to thrive in public listings within the UK.
The proposed delisting of OTAQ from the Aquis Exchange highlights significant challenges encountered by smaller tech firms in navigating the UK’s public markets.
