‘I divide my working time between London and Bristol. Allied Domecq closed its London office in late 1999, and transferred operations to the company’s global headquarters in Bristol, southwest England. Because the investment community is based in the capital, I find myself traveling between the two cities on a regular basis. This week I’m in London for two days, meeting with investors, company management and service providers before heading back to Bristol. On average, I spend about half my time in London, but all this traveling means that I am unfortunately subject to delays blamed on my previous employer, the UK rail infrastructure company Railtrack.
It was while working at Railtrack that I first got into investor relations. I was involved in the company’s flotation, joining the firm early in 1995. As part of the privatization process, I got involved in IR activities. In effect, we were creating a new industry for private investment. The job was all about communicating, telling people about the sector and the company. We were, in effect, starting from scratch.
After the float, I established Railtrack’s investor relations function and stayed in the main IR role for about two years. I then moved to another part of the business, but I was keen to get back to investor relations. This is because in investor relations you get the chance to operate at a very senior level, tapping into a wide range of business areas and gathering a large knowledge base. You get to see the company from a perspective that many people inside the business don’t. And, most of all, the IR job sets you an intellectual challenge.
All change
I was also keen to change industry. Railtrack is a domestic, engineering-based company with little brand. In contrast, Allied Domecq is an international, marketing-led company working in a fun business. It’s very different from the railways.
There are only about six or seven of us in the corporate communications team at Allied Domecq, and we cover a wide range of work including media relations, political lobbying, social policy and IR. It’s a very new department, but that doesn’t mean it is given short shrift by the management. Only this morning I met with the CEO to discuss our future internet communications. I meet with him on a reasonably regular basis, though this inevitably varies with the financial calendar, increasing as we near results and whenever we make significant company announcements. I tend to deal with the finance director on a more day-to-day basis, but it is very important that the IR professional meets with company management regularly, if you are to properly communicate the company’s strategy to investors. You need to have board contact in order to articulate its vision.
Today I discussed with the CEO how we could improve on our current web communications. When I arrived here last year, one of the first things I did was examine Allied Domecq’s web presence. There were a number of areas where we could improve on what was already there, and we are still keen to explore the new possibilities of technology. We did our first webcast recently, and it went well, proving especially popular with our US investors. This morning we also discussed doing more conference call presentations, but investor reaction to these is a bit more mixed. Gathering feedback on such events is useful, as it lets us know how we can do things better next time around.
Though we are examining the opportunities technology provides, we are somewhat limited by technology, too. The quality of services such as streaming is key, but the effectiveness of new technology in IR is also limited by the attitude of the audience. This is especially true in the UK.
This week I’ve also held a review meeting with our annual report designers. We published our annual report a few months ago, and we spent some time discussing its performance and how output and processing could be improved. Of course, on top of this I will be having meetings with analysts and investors. This is the main reason why I come to London so frequently. You can get quite good at working with e-mail and telephone calls, but they certainly don’t replace face-to-face meetings.
Brands new
Allied Domecq has found itself in the market spotlight lately, following our recent brand acquisitions. Brands are very important in this industry. Look at our annual report and you’ll see that Allied Domecq is all about the brands and the people. Spirits is a brands-led business. When you go into a bar, anywhere in the world, you can see our brands lined up on the back wall.
We already have key brands such as Beefeater Gin, Ballantine’s Whisky and Kahlua – they are all household names. Recently we have acquired several new brands, and we reached an agreement with the Puerto Rican producers of Captain Morgan. This was a Seagram brand, but the producers have the right to buy the brand back should Seagram be sold. We have reached an agreement that they will buy back Captain Morgan should Allied Domecq not acquire Seagram.
Though each new brand acquisition requires a lot of due diligence work, we’ve also been busy securing the US distribution rights to Stolichnaya vodka, as well as sealing the deal to buy two major champagne houses, Perrier-Jouët and Mumm.
There has been a lot of speculation about Allied Domecq and the auction of Seagram. In terms of our IR policy, we only make announcements to the investment community when I believe we have something to say. Other than that, we’ve kept pretty quiet. Our CEO has previously stated that consolidation in this industry is inevitable, and that when it happens we would like to take part in the process.
But one of the concerns for me about the Seagram auction was that people were saying that it was a ‘must-do’ deal for Allied Domecq. We let the market know that we would only put in a bid for Seagram if we could be sure that the merger would generate shareholder value.
Throughout the Seagram auction, I had to control the news flow and keep tabs on the messages going out, because analysts can be quite demanding. Eventually we withdrew from the Seagram bidding because we felt we had already met our strategic objectives – to expand our brand portfolio and broaden our geographic interests. We decided last year that we needed rum, vodka and champagne brands to complete our drinks portfolio, and I’m pleased to say we have achieved that goal without encountering the hassle of a major corporate integration. Neither did we want to get drawn into an escalating price war over Seagram, and end up paying over the odds.
Up to speed
With all this going on, I haven’t had any time off since I joined Allied Domecq. I’ve been keen to get up to speed with the company and build knowledge of the industry. Though experience is always useful, when you change business much of your industry knowledge becomes useless. I work long hours in a typical week, splitting my time between London and Bristol. On the weekend I often retreat to my house in Oxford. Though I clearly spend a lot of time traveling in this country, I do get the opportunity to go abroad too. I’ve visited the US because the company is looking to further expand its international shareholder base. This picked up when we decided to sell off our pub business in 1999, and now we’re trying to boost the number of foreign investors further. I’m also going to California soon to visit our wine operations, which is all part of my efforts to get to grips with the business.
Traveling isn’t a drag, and I still very much enjoy working in investor relations. This is a fun company with good people. Allied Domecq is also at an interesting junction, and you never know what’s going to happen in the future in terms of industry consolidation. In that respect, the mergers present an element of risk for my job security – a large merged company still only needs one director of IR – but this is an interesting period for the business and the wider industry, and that’s why I joined.
