Q. We are quite a small company, but compared to our peer group our business performance has been very good lately. How do you suggest we go about attracting new shareholders?
A. Education is the best strategy in a situation like this. The problem with being a small company is that there are so many to choose from, it’s hard to stand out from the crowd. Suggest to your broker, corporate finance advisor or IR consultant that they might like to put on a sector conference or workshop at which you would present alongside your peers. Suggest a number of industry experts (regulators, editors of relevant trade journals and so on) who might be interesting speakers as well as a list of companies that might be invited to participate. Even if presenting alongside your company might make your peers’ performance seem less than impressive, most companies would never refuse the chance to meet institutional shareholders en masse. Then just make sure you have a prime presentation slot and let your figures speak for themselves.
Q. I work in an IR consultancy advising recently listed companies on their IR strategy and helping them arrange their programs. I can’t seem to get many of them, especially the smaller ones, to understand that they simply are not of burning interest to most large institutional investors.
A. This will require all your diplomatic skills. My suggestion is to approach a friendly buy-side analyst or fund manager and ask if they will do you a favor by having a one-on-one lunch with you and whichever client is currently suffering from myopia. Suggest to the client that this would be a great opportunity not only to present the company’s investment case but also to hear about how the buy side really works. Then make sure that you brief your invitee to detail their investment process and stress how many companies they have to review and how little time they have to do it. An alternative guest would be a global head of research in a major investment bank. The largest sell-side institutions typically cover over 3,000 stocks globally and they would have no trouble convincing your client how enormous the investment universe really is, and (in the nicest possible way, of course) how small he is within it.
Q. As a smaller company we don’t get large audiences coming to our results meetings. However, our (non-executive) chairman is very status conscious and insists on having the meetings in a grand hotel whose smallest function room is still way too big for our purposes. The meeting then ends up looking very sparse and the perception is that the IR team hasn’t delivered on attendees. What can I do?
A. First of all, choose a time of day when people are likely to be interested in refreshments – a late breakfast perhaps, or an early lunchtime snack. Select the nicest room you can, and instead of rows of chairs, lay it out classroom-style, with tables, pads, pencils, water and glasses, making it easier for the attendees to take notes, and filling up space. Have a folding screen put just over halfway down the room and set up the coffee station behind it. Arrange for really first-rate food to be served immediately after the meeting has finished. Finally, make sure that you compile a great ‘goody bag’ for people to take away. That way the meeting will look fuller, more people will stay to the end, and you’ll build a great reputation that will bring people along next time. If all else fails, call a film extra agent (easily located in your yellow pages) and secure the services of a few ‘institutions’ for a couple of hours – it’s cheaper than you think!
E-mail questions to Heather McGregor – [email protected]. McGregor is a former IRO and investment analyst who currently works on IR assignments for Taylor:Bennett, an executive search firm specializing in communications jobs across Europe.
