Anyone who claims not to dream of standing on the stage of the Royal Albert Hall - a stage once graced by such 20th century luminaries as Frank Sinatra, the Rolling Stones and Martine McCutcheon - is probably lying. And if the gleeful grins on the faces of the winners of the Investor Relations Magazine UK Awards 2000 was anything to go by, the reality is as good as the fantasy. When you’re there in front of 1,000 people to collect a trophy that says you’re brilliant at your job, it is probably even more special.
One IR department that will undoubtedly be smiling for the next millennium is BP Amoco’s. Last year, the petrochemicals giant skipped off with three awards. All eyes were on it this time - although, in a year which saw the IR bar being hiked higher, the competition was surely too strong for the company to repeat that success. In the event, BP Amoco didn’t match last year’s tally. It doubled it.
You know when you’re really giving your challengers a pasting when, towards the end of the evening, each new triumph is greeted with embarrassed giggles. In BP Amoco’s case, it was more like hoots of laughter. The IR team walked away with awards for best results meetings and analysts briefings, best annual report, best investor relations web site, best communication of the creation of shareholder value, and best crisis management as well as the Grand Prix for best overall investor relations. David Peattie, vice president investor relations, must have been glad that his whole IR team came to the event, if only to help carry the trophies.
‘We were short-listed for nine awards and got six,’ he says. ‘We were particularly surprised because I think we’ve actually had a quite a tough year in IR with certain fields not going quite as well as we’d hoped. In terms of Arco, we got stuck in the mud with the Federal Trade Commission in the US.’
In certain instances, the margin of victory was embarrassing. The research report, prepared by research company Fulcrum Research, reveals that, in the voting for best results meetings and analyst brief-ings, BP Amoco secured 180 points. Runners-up Tesco and Glaxo Wellcome managed a paltry-looking 70 and 60 points respectively. That said, the category was not one that evoked gushing praise from the investment community. ‘BP Amoco’s results meetings keep you awake,’ was all the enthusiasm that one analyst could muster, adding, ‘The presenters are very astute. The majority of the others are from bad to horrible in terms of boredom.’ Praise indeed.
A titanic iceberg
The award for best annual report was a more positive affair, although there were still gripes. One analyst states, ‘All of them were pretty much the same’, and another moans that there is ‘far too much gloss’. Nevertheless this was a closer-run category, with CRH and Glaxo Wellcome sharing third place, ten points behind Bass and 40 points behind BP Amoco. The winner was praised for its comprehensiveness, detail and clarity and its victory shows that the trend towards scaled-back printed reports is viewed positively. ‘It’s like an iceberg,’ says Peattie. ‘The printed version has about a tenth of what we have on the web. I think we were probably the first company to go quite that far.
‘ The award for best communication of the creation of shareholder value was a new one this year but it still received a rather predictable baptism - BP Amoco won it. One analyst asserts, ‘They stand out by miles… They give you data that makes you come to the conclusion that they want you to come to.’ Lloyds TSB Group was edged into second place in the closest vote of the survey. Indeed, one respondent wrongly describes them as, ‘The original and still the best’.
BP Amoco also won the plaudits for best crisis management, proving that it hasn’t all been sweetness and light for the company. It was singled out for its handling of the decision by the US Federal Trade Commission that they should sell Arco’s Alaskan businesses, and praised by one respondent because ‘they always tell the truth and are quick to give out information. There was no spin.’
Peattie agrees that that was the most significant challenge of the year. ‘There were three months between November and February in which we were getting 100-200 calls a day, most of them from hedge funds ,’ he says. ‘But I think the sheer volume of calls we took and dealt with was impressive. We certainly felt we were in the right mode to respond to a lot of people. That challenge was new for us.’
‘The Grand Prix,’ Peattie continues, ‘meant most because it’s for the team. Especially because I am moving on. I’ve been in IR for three years and I feel it’s time to move on. I’m going back to operational management which is where I came from. The rest of the team will stay in place so we’ll have the continuity.’
In the face of a near white-wash, the Boots Company could be excused for a little gloating, having cocked a metaphorical snook at you-know-who, nudging it back into second place in the category of best board communications. It was 20 points ahead of BP Amoco, thanks, in the words of one respondent, to ‘consistency of information and good breakdown of individual operating divisions.’
Likewise, Vodafone AirTouch should be delighted with its victory over BP Amoco in the best investor relations during a takeover category. The high-profile nature of its Mannesmann takeover may have propelled it to the forefront of respondents’ minds. But, even accounting for that, it positively thrashed the runners up, garnering 170 points, compared to the 60 of BP Amoco and the 50 of Royal Bank of Scotland Group and Blue Circle Industries. One fund manager praised the winner, remarking, ‘They were good at keeping in touch with the timetable and structure of the deal.’ Another respondent enthused about the ‘very investor friendly manner’ of the deal.
Winning losers
One award BP Amoco simply couldn’t win was that for best investor relations by a loss-making company, unless it was prepared to blow its entire profit for the sake of a seventh Investor Relations magazine award - which it wasn’t. However, up against tough competition from BSkyB Group and Energis, Freeserve managed to sneak home in first place. One analyst declares, ‘The IR department has miraculously supported the share price.’ At the awards event itself, head of corporate affairs, Paul Barker almost certainly won the (unofficial) award for best speech. ‘I know there’s a compliment in there somewhere,’ he mused on collecting the award, before announcing with a grin, ‘We owe a debt of thanks to our advisor Credit Suisse First Boston who brought us to market and also to our financial PR advisors Citigate Dewe Rogerson, without both of whom - and their charges - we would probably not be a loss-making company.’
Freeserve was also nominated for the best IR for a new issue award, a prize won by lastminute.com (softening the blow of its media mauling and post-IPO stock slump).
In an evening that celebrates excellence in the UK, and in the ultimately British surroundings of the Royal Albert Hall, it would be easy to forget that the rest of the world exists. Thankfully, some awards act as little reminders.
The prize for best North American company IR was won by Colgate-Palmolive. Thwarted in the Investor Relations Magazine US Awards in March, it proved that it at least knows how to appeal to the UK investors and was described by one fund manager as ‘the absolute stand-out’. Ahead of Li & Fung and Qantas Airways, the winner of best Asia-Pacific company IR was Hong Kong-based Legend Holdings. While one respondent claims the region’s companies are ‘all so much better than twelve months ago, it’s difficult to pick one out,’ Legend was selected for ‘the constant and efficient flow of information.’ TotalFinaElf won the best continental European company IR award at a canter, ahead of Nokia and Danone Group. In the emerging market category, meanwhile, two Hungarian companies claimed the two top places. Matav fought off OTP Bank, as its ‘presentations are of a very high standard and it has a very good web site.’
Exporting IR
UK companies’ IR output can’t be judged solely on their approach to UK investors. Hence the award for best UK company IR in the US market. With telecom mania abounding, this was a straight fight between British Telecom and Vodafone AirTouch. BT won with the help of its New York office, quarterly reporting and a good web site.
With IR best practice moving on so fast, the award for most progress in IR is one of the more prestigious  although, as Mike Harrop, UK IR manager for winner Royal Dutch Shell, quips, ‘I don’t know if it says more about where we’ve come from or where we’ve reached.’ The answer would seem to be a bit of both, with one analyst stating, ‘Before this year they have always been reactive… However, they tend to anticipate questions more now.’ The fact that the company won the same award the year before makes you wonder about the state of its IR a couple of years ago, but it’s certainly shaped up now.
Harrop puts much of the progress down to ‘greater senior management involvement’ but believes that it also comes from a change in tone. ‘The IR department now treats people with a kind of customer-service mentality.’
The best IRO award was picked up by Steve Webb of Safeway, the 1996 winner. One respondent says, ‘He has always got real answers to questions and doesn’t hide things, unlike [the competition], where there is a strong tendency to come out with a PR spiel.’ Keith Whitesides of the Boots Company was second ahead of BP Amoco’s Peter Hall.
There were three Grand Prix this year: for smaller companies, for the FTSE 250 and an overall prize showing that quality IR has filtered down to the minnows. You won’t need to be reminded who won the overall prize but even in the smaller company category it seems respondents picked out companies that could throw a lot of resources at the IR function. The winner here was CRH, a company one analyst describes as ‘the Rolls-Royce of Irish plcs (if this is a compliment!)’.
In the FTSE 250 category, Hanson walked away with the Grand Prix. ‘To get this award is recognition for all the hard work the company has put in,’ says IR manager, Carol Ann Walsh. ‘On the evening of the awards, Ian Hislop, the MC, introduced the nominations and said that the winner was the company that had left nothing to be desired. I think that sums up in a nut shell what we’re trying to do. Of course, there’s more we can do to improve but we are continually trying to stay ahead of best practice.’ Walsh, like many of the winners, attributes her company’s IR achievements in part to the involvement of senior management and an adherence to the basics of IR. ‘I think in IR we all have the same aims,’ she says. ‘It comes down to seeing what needs to be done and doing it.’ And after the hoopla of the awards ceremony came the party  a clear demonstration that the UK IR community doesn’t just excel at shareholder communications  it knows how to cut some rug, too.
Who says?
The award winners aren’t hand-picked from those who wine and dine Investor Relations journalists (we’re still campaigning for that). Instead, we employ an independent research company, Fulcrum Research Ltd, to carry out a comprehensive survey of the UK investment community. It conducted fieldwork between February and May 2000 and contacted 173 institutions in Britain and the Republic of Ireland. A total of 559 investment professionals responded to the survey (297 sell-side analysts, 262 fund managers and buy-side analysts). To provide some background, 123 were interviewed for a separate questionnaire about IR issues. For most categories, winners were those with the most nominations from respondents and, pleasingly, investors frequently picked companies outside of their specialization, if they had one. The research for the best UK company IR in the US market was performed by Erdos & Morgan, the US research house.
