2 AIM tech companies growing in leaps and bounds

High growth, huge untapped markets and great products put these 80%-plus five-year winners at the top of my watch list.

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The LSE has never been the exchange of choice for tech stocks and the departure of ARM Holdings in September has only made things worse. That’s all the more reason why growth-hungry investors shouldn’t ignore the potential to be found in AIM-listed tech shares.

One investor favourite is theme park ticketing vendor Accesso Technology (LSE: ACSO) whose shares have increased in value over 900% in the past five years. Providing ticketing technology and queue management solutions for roller coasters and water parks may not be a sexy industry, but with thousands of such venues across the world, Accesso has a huge market to tap.

The company has done this with aplomb and revenue has jumped more than 180% over the past half decade. This success is due to Accesso rolling out devices that benefit both parks and their customers by allowing guests to buy tickets online, reserve spots on rides, and boosting cross-selling opportunities by reducing the amount of time guests spend waiting in long lines.

This is obviously an attractive proposition for park operators and major brands such as Six Flags and Merlin Entertainment have rushed to sign long-term contracts for Accesso’s services. The opportunities for Accesso to continue growing are especially bright given the ubiquity of smartphones and consumers’ increasing acceptance of mobile payments. Guests can now use Accesso’s technology to buy their tickets, souvenirs and food & drink all with a tap of a button on their phone.

Financially the company is on sound footing with net debt less than one times full-year EBITDA, and operating margins of 8.2% looking likely to rise as recent acquisitions are integrated and cost of sales fall due to recurring revenue from major contracts. Shares are pricey at 47 times forward earnings but I’ll continue to watch Accesso closely in the coming quarters.

Banking on health

If there’s one subject that Labour and the Tories both agree on it’s the need for the NHS and healthcare industry more broadly to rapidly embrace technology in order to lower costs and improve patient outcomes. That’s where EMIS Group (LSE: EMIS) comes in.

EMIS digitises and standardises patient records, develops software for medical practices and runs IT systems for GPs, hospitals and pharmacies. This has unsurprisingly been a winning combination for physicians looking to simultaneously lower non-medical operating costs and improve patient services.

EMIS has been growing at a steady clip, although over the past half year, revenue growth slowed to 1% as NHS spending fell and the company made few acquisitions. In the long term there are certainly major growth prospects as the company’s 55% primary care market share and 14% market share for child, community and mental health care offer significant room to grow.

Aside from top line growth, I’ll also be watching whether the company can improve margins enough to continue growing profits and dividends at a steady clip. There was success on this front over the past six months as adjusted operating margins rose from 21.7% to 22.4% year-on-year, allowing dividends to rise 10% during the period.

Slowing growth is a worry, but it could simply be a single quarter hiccup and with a large untapped market ahead and a relatively sane valuation of 19 times forward earnings, I believe EMIS deserves a closer look for tech investors.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ian Pierce has no position in any shares mentioned. The Motley Fool UK has recommended Emis Group. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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