Network security specialist Endace's float on the London alternative investment market (AIM) has been lacklustre, attracting fewer than 100 shareholders after more than nine months of trading.

The technology company, which chose the AIM market to boost its profile and be closer to its customers, is also tightly held.

Two shareholders hold 10 per cent each and there is a free float of just over half the shares on issue.

However, chief executive Selwyn Pellett said he had no regrets about his decision to list on AIM instead of the NZX, saying such a structure was typical of small companies listed on that market.

"We are very happy with our shareholder base as we have some of the best UK institutional investors you can get," he said. "What you want [at our stage] are long-term holders that believe in the company, its story and the management's ability to deliver on the numbers."

Endace listed at £1.62, peaked at £1.95 and then dipped down to 90p after a warning that its profits had been hit by a component shortage.

It is now trading around £1.03 since the release of first-year earnings last month showing a rise in profits from US$600,000 to US$1.429 million.

Pellett said he had no wish to enter a debate over the merits of the AIM market over the NZX.

However, Endace's performance will fuel arguments that small New Zealand companies are better to list locally and build their reputation before heading off overseas.

Text messaging company Plus SMS is one of several companies that have looked at an offshore listing.

Earlier this year Herald columnist Brian Gaynor, examining the cost of listing share trading volume and share price performance, highlighted Endace as a company that might have done better had it stayed at home.

Gaynor said it would have benefited from greater profile in the media, while its shares would have benefited from the weakening dollar, and its register would have been deeper.

Endace was founded in 2001 by Pellett with Waikato University computer science professor Ian Graham and Waikato management professor Neil Richardson. It counts government security agencies and international telco companies among customers for its products.

London's Alternative Investment Market

* AIM gives companies access to London's equity capital market at an early stage of development.

* It has less onerous listing requirements than the main board of the London market. It says one of its chief merits is giving companies international profile.

* Since AIM opened in 1995, more than 2200 companies have been admitted and more than £24 billion has been raised.