Going public requires a step-change for companies and the way they communicate, and for many involved its also a new experience they cant afford to get wrong
Brighter IR has been fortunate enough to support many IPOs over the last twelve months, so we’ve decided to take a closer look at what companies need to think about pre- and post-IPO.
Enhancing public perceptions
An intention to float means you’ve already made the decision to open your doors to the constant attention of the financial markets in return for the support of your stakeholders. You’ll need to explain financial performance, your management’s suitability and of course, plans for future growth. From a corporate communications and investor relations perspective, potential stakeholders need to learn about the business and importantly, understand the investment proposition in order to make an investment decision.
To start, we recommend a thorough review of all aspects of your existing corporate communications strategy, policy and existing digital infrastructure in order to identify the key areas for improvement and change.
We all use the web as a research tool for just about any purpose and investors are no different. But as the power of the web continues to increase on what seems like a daily basis, so does your need to enhance the impact and reach of your communications.
That’s because potential investors aren’t just going to look at your key financials and and read the prospectus. Analytics teaches us they view you holistically, and are just as likely to check your social media channels as they are your investor pages.
Today’s web technology is also infinitely more accessible and affordable than it was even 5 years ago. Audiences have learned that a snazzy website doesn’t in itself mean a slick operation, and as a consequence they’ll focus more on the messaging, and importantly whats not being said, as much as what is.
Does your company have an attractive track record? What about strong management? Are your products and services explained and promoted to end consumers? Do you have an inclusive Careers section? What about Corporate Social Responsibility? Are you well positioned among your peers and competitors? Will investors get you?
From experience, it’s fairly common for companies to launch a new website or updates well into the listing process, if not 6 – 12 months after, but we advise clients to begin the communications review and change process as early as possible. As soon as the IPO is rumoured in the press your web traffic will begin to increase and this is when you need to have a rolling communications plan in place.
There are a number of digital communicative regulations a newly listed company must adhere to, primarily surrounding the need to disseminate specific pieces of information to the market in an equal and timely measure.
The rules are slightly different for AIM quoted companies when compared to MAIN market listings, but in a general sense you need to have a corporate website and you have to post certain pieces of information to it on a regular basis.
One example, regulatory news, is something that applies to all UK quoted companies. The Transparency and Market Abuse Regulation directives require MAIN market companies to post regulatory news announcements on their website within 24 hours of release to market, so that the information might be available to all interested parties equally. Likewise, AIM Rule 26 specifically legislates that AIM quoted companies post all notifications the company has made in the last 12 months, and this includes regulatory announcements.
So yes, regulation matters. But and we cant stress this enough it shouldn’t end there!
You’re inviting a new audience of savvy and experienced investors to learn more about your company, and they already expect to see the regulatory requirements as a matter of course.
Investors typically spend time looking through the historical performance and communications of a potential investment in order to build their perception, but this level of historical detail often doesn’t exist when looking at an IPO. Potential investors therefore have to work harder and expand the ways they judge an organisations potential, and this means your communications have to work even harder too.
It’s easy to simply ask What do we need to have to meet the regulations and what can wait?, especially at such a busy time, but this should really be a time when you ask Who are our audiences, and what are they looking for? instead.
Providing the regulatory content is merely a box ticking exercise, and we believe you’ll be judged more on the additional information you offer stakeholders. Its true of course that your intention to float shouldn’t be communicated publicly until the formal announcement is made through the proper channels, but you can and should begin work on enhancing your communications and audience perceptions much earlier than this.
An evolving landscape
As a final note, we’d like to highlight that best practice investor relations isn’t just about broadcasting. It should also involve two-way communication, a mechanism that benefits both sides.
Giving investors a dedicated platform for reaching out can help you understand and adapt your strategy and objectives over time. The types of communication you make and the things you say will grow and evolve, but as with any digital communications strategy its important to analyse the effectiveness of your communications and respond accordingly, offline and online, in what becomes a cycle of regular review and iteration.
On a similar note, we also encourage clients to take full advantage of the benefits of electronic communication by taking the time to publish the interim and annual report in a format other than plain PDF.
Publishing your annual report as an accessible and interactive website allows you to track the pages and content of most interest, allowing you to concentrate more resources on particular areas next time. Thanks to the technology available today it doesn’t have to cost the earth either.