Egm endures thanks to IPOs, M&As and capital increases

And yet it moves. In the first seven months of the year, despite the persistent lack of volume and liquidity on the financial markets, especially for small-cap stocks, the Egm managed to increase its size, albeit slightly, as the only exception (together with the Oslo marketplace) among the continental small caps segments. This is thanks to the new IPOs, which are few compared to the numbers of the past, but which nevertheless maintain market dynamism, thanks in part to two debuts of a certain size, such as those of Nextgeo Solutions and Icop. Finally, the three recent capital increase transactions carried out by Franchetti, Ivision Tech and Circle are another small sign of appeal for the market of high-potential micro-enterprises. The discount on the largest capitalisation stocks, however, has now reached balance sheet levels.

The segment is now trying to bet everything on a definitive turnaround, taking advantage of the first signs of rotation on SMEs coming from the US, perhaps by exploiting the opportunities of Patrimonio Dedicato, the vehicle that the government is preparing to launch in the coming months to channel more capital to small and medium-sized listed companies.

According to a survey conducted by Websim Corporate, performance and volumes on the Egm continued to lag in the first seven months of the current year, despite the signals recorded between the end of last year and the beginning of 2024 seemed to presage a redemption. From January to July, the Ftse Italia Growth index did not recover, but rather took a further step backwards, leaving 3.2 per cent on the ground, while volumes, despite the new quotations, were down 12 per cent, showing an acceleration of the contraction in July (-23 per cent). Egm companies are now 'half price' (in terms of Ev/Ebitda) compared to companies with higher capitalisation.

While waiting for the full picture of the half-year figures, the 2023 earning season - in the opinion of Websim analysts - provided more disappointments than positive surprises. This led to a downward revision of the 2024-25 estimates, with a cut in the 2024 and 2025 sales projections of 3% and 5% respectively, with a more than proportional effect on EBITDA (-9%). But "a signal from the half-yearly reports highlighting the growth potential of profits and profitability could be the first driver of the cycle's reversal, allowing Egm to engage the recovery trend underway on global small caps indices," warns Stefano Corneliani, head of Websim Corporate. For the rest, there is no doubt that the Egm, despite the negative notes related to volumes and performance, has once again managed to show some dynamism, albeit at compressed levels compared to the past. This is a market that is struggling on a daily basis, but remains solid overall: since January, there have been another 15 new IPOs, three of which, those relating to Nextgeo, Icop and Misitano and Stracuzzi, are of interesting size and outlook; in addition, many of the listed companies have confirmed their willingness to grow through acquisitions. Lastly, even the delistings themselves are a sign that the Egm is far from immobile: the problem, if anything, is that at this stage it is in danger of being squeezed by those with greater ambitions for growth and are unable, as in the past, to make the leap to the main market'.

In an almost paralysed market, a sign of continuity are the M&A operations which, although fewer in number than in the recent past (36 in the first seven months, compared to 56 in the same period last year), signal the willingness of many listed companies not to interrupt their development projects. This is the case of Pattern, which in this difficult context has nevertheless managed to finalise the most substantial acquisition in its history, taking over Umbria Verde Mattioli, a company specialising in the production of high-end knitwear, for around EUR 20 million. Also worthy of note is the transaction whereby Innnovatec took over 50.1% of Green Luxco Capital (paying EUR 23 million), aiming for a significant increase in EBITDA.