The triumphant winners of one of Ireland’s most hotly anticipated 2007 contests were announced just weeks ago. And no, we don’t mean the battle for the Irish premiership – we mean the IR Magazine Ireland Awards.
When IR magazine hosted the awards back in early May the streets were adorned with images of politicians, all vying for the support of Irish voters. Maybe it was only the business community that was focused on the IR Magazine Ireland Awards but, large posters aside, there were some notable similarities between the election contest and the awards event.
One of these was the fact that both were determined by the people who really matter. In the case of the premiership election, it was the Irish electorate; for the awards, it was the investor audience: buy-side analysts, sell-side analysts and portfolio managers.
As the Irish market has skyrocketed in its prominence, so investor relations has expanded to satisfy the increasingly voracious appetite of the global investor audience. The Irish market is as dynamic as ever and, as Deirdre Somers, CEO of the Irish Stock Exchange, noted in her inaugural speech, Ireland’s forward-looking approach to IR is central to its success. ‘Effective IR is the life blood of a dynamic market,’ she asserted. ‘Without it, a market stagnates; it loses its attractiveness to investors, its transparency and its liquidity.’
The investor perception study from which the winners are chosen also provided a number of interesting perspectives on the special nature of Irish IR. Many of those asked noted the no-nonsense approach favored by IROs in Ireland. ‘Irish companies have less fluff, flannel and spin than UK ones,’ said one respondent.
‘Irish companies are more pragmatic, and this comes across in meetings,’ gushed another. ‘I think the Irish like to get out and tell the story – and we like to maintain a consistent reaction,’ remarks Alan Kelly of Allied Irish Banks, winner of the best IRO award. ‘I think Irish firms generally have a reputation for being particularly outgoing. It’s about consistency, maintaining credibility and making sure investors are briefed through the cycles.’
Travel fans
Perception study respondents often credited Irish IROs with a superior IR effort to that of their UK peers. ‘Admittedly I’m biased but I feel Irish small and mid-caps are ahead of their UK counterparts,’ says Paul Burke of Irish broking firm Davy. ‘Just look at the share registers of Irish small and mid-caps and you’ll find they aren’t just owned by Irish institutions – they are well spread throughout the UK, the US and Europe.’
Ireland’s IROs are also more inclined to visit their foreign investors, and it is this fact that really sets Irish companies apart from their UK-based competition. ‘UK companies don’t visit us regularly. They only come when it’s opportune for them,’ said one study respondent. ‘In the UK domestic institutional ownership may be as much as 50 percent, so they can afford to be lazy,’ explains Burke.
Broad shareholder base
Davy estimates that, in the Irish market, Irish institutions own around 15 percent of shares at Irish firms, US institutions around 28 percent, the UK 16 percent and Europe around 14 percent. Allied Irish Banks is typical of this breakdown. ‘We have a bigger shareholder base in the US than in Ireland and a strong European and UK presence,’ explains Kelly. ‘As a result, we have always been more outward-looking.’
The recent IR effort undertaken by Ryannair was viewed by some as more evidence of the Irish proactively getting the message out to the market. ‘When Ryannair brought out its results on the Tuesday, it had six people on the road for the rest of the week. That’s six people in six different cities – 24 IR days really is a huge commitment,’ Burke notes.
So what else has gone in Ireland’s favor? Kelly suggests that Ireland’s ‘vibrant’ mid-cap market has helped drive improvements. ‘What’s really interesting about Ireland is that it is not just large caps that are getting out there,’ he notes.
And Burke agrees. ‘There was an early buy-in to IR by the large caps and more recently by the small caps, and as a result there has been a very professional attitude to IR,’ he says. ‘CPL Resources, for example, would be very well known in the big cities of Europe and the UK. There is not a chance a UK company of this size would go to the same lengths.’
