Investor Relations Healthcheck
For some, the lack of liquidity in the markets makes for a quiet, less proactive time on the Investor Relations front – investor meetings are tough for corporate access and sales teams to secure so this is a time to spend on putting your house in order: modelling, looking at presentations, undertaking peer analysis, etc.
It would seem macro-economic and political volatility and market uncertainty is here to stay for some time so building different scenarios for communications and IR strategies for potential impacts and outcomes is a good idea. Keep planning and, critically, keep planning from a senior management point of view. IROs have to field more questions about credit, dividends, re-financing and covenants than ever and providing forward guidance to cautious investors in times such as these is paramount.
On the other hand, some of you suggest that all this reactionary stuff is a waste of energy and that, perhaps the single most important factor in all this turmoil is consistency. This is what IROs and teams should be focusing on since changing tack in terms of messaging will make investors even more jumpy than they already are.
Those of you who are resolute members of the ‘Getting Out There’ brigade maintain that the current markets can provide a good entry point for potential new investors, since so many stocks are undervalued. This, then, is the time to go and wear out some shoe leather, sell your growth story (for when the markets recover, as they must do, since it’s all a great big cycle), increase exposure through ADR programme etc.
IROs can provide their Boards with invaluable strategic insight and market intelligence, and play a key role in shaping the investment strategy for 2012 and beyond. VMA Group’s Investor Relations Career and Salary Survey 2012 will focus strongly on ‘The View from the Top’ – how the IR function is perceived and valued by Senior Management and Boards .
As a practice with a finger firmly on the pulse of IR, we continue to see IR teams expanding, albeit strategically and slowly. Much of our time at this time of year is spent advising clients how to up-skill their current IR teams, what their peers are doing and where they are likely to find talent in 2012.
As one investor said in a closing statement following a company’s recent investor day: ‘I’d like to apologise on behalf of the entire capital markets’. These are challenging times for companies and IROs but tough times can generate great creativity in terms of business ideas and strategies. To reiterate an earlier point, it’s all in the planning and the timing as to how to deliver a message and when to maximise impact.