Strong VR demand sees Immotion Group soar on entry to AIM (IMMO)

Virtual reality (VR) business Immotion Group (LSE:IMMO) has enjoyed a strong entry to AIM, with shares rising by more than a fifth to 12.25p since listing at 10p on Thursday. Immotion specialises in ‘Out of Home’ VR experiences, which sees its technology and so-called ‘motion platforms’ installed in cinemas, theme parks and shopping centres.

It raised £5.75m from yesterday’s listing, with which it plans to create and publish VR content that it can combine with its motion platforms to develop ‘truly immersive experiences’. The firm generates revenues by selling its motion platforms to leisure and entertainment operators, establishing concession partners, and opening owned and franchised outlets, which trade as Immotion VR.

It expects the ‘Out of Home’ market to grow eight-fold to $8bn by 2022 and has already seen its technology installed at Merlin Entertainments’ Lego Discovery Centre in the US, and Genting Resorts in Birmingham. Immotion was established by tech and media entrepreneurs Martin Higginson and David Marks, and Sir Robin Miller – of Emap and HMV fame – currently sits as the company’s chairman.

Higginson said: “In combining award-winning storytelling, CGI production and precise motion synchronisation, Immotion Group can deliver experiences that are not easily replicable in the ‘in home’ market. We have already experienced a very positive reaction from consumers, many of whom are trying VR for the first time, and from business partners who see the strong potential for our VR platforms to provide a new revenue opportunity.”

“The five-star reviews received from our retail customers, along with the early sales of motion platforms and a successful launch experienced by our Concession Partner, Merlin Entertainments’ Lego Discovery Center in Boston, have given us confidence in the market and our strategy to deliver on the opportunity. We believe that this IPO will enable us to build momentum and achieve our goal to build the business across the UK, Europe and USA in what is an exciting, fast-growing market.’

Immotion is latest in a growing number of virtual reality firms to enter AIM, with other names including VR Education (LSE:VRE) and EVR Holdings (LSE:EVRH). They are looking to take advantage of a recent pick-up in the technology after years of poor uptake.

Gadgets like Nintendo’s Virtual Boy and the Sega VR headset offered early VR experiences in the nineties, but the technology failed to catch the imagination of users and customers were put off by the high price tag.  In the years since then, VR has come on leaps and bounds, and gadgets like Facebook’s Oculus Rift and HTC’s Vive are beginning to set the mainstream alight with highly realistic experiences and affordable prices.

Although the size of the global VR market remains modest – it was worth around $14bn in 2017 – International Data Corporation expects it to grow to $143bn by 2020. Likewise, market research company Statista estimates that revenues from the sale of augmented reality, virtual reality and mixed reality devices will rise from $7.2bn in 2017 to $84.7bn in 2020.

Author: Daniel Flynn

The author does not own shares in the company mentioned in this article

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