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What it takes to develop an effective Investor Relations strategy Claire Fargeot. Agenda . Understanding …….. the capital markets and how they work the audiences and their needs the rules of engagement the valuation game the role of IR at Board level the opportunities for IR
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What it takes to develop an effective Investor Relations strategy Claire Fargeot Best Practice Investor Relations
Agenda • Understanding …….. • the capital markets and how they work • the audiences and their needs • the rules of engagement • the valuation game • the role of IR at Board level • the opportunities for IR • ……… will lead to effective IR strategies
Capital Markets and how they work • Buying and selling stocks and shares • Shareholder value generation • Debt and/or equity (primary and secondary finance) • Capital raisings and IPOs • Rights issues, share buy backs, bonus issues • Mergers, acquisitions and takeovers • Private equity and venture capital • Institutional investors and private investors • Banks and strategic investors Lifecycle transactions Investors
Capital Markets and how they work Information loop Media Institutional Investors Local & International Business Press ► Sell Side Analysts Results comments / Research notes / Sector coverage Market reports / Investment columns / Editorial coverage Investment Press Company ► Private Investors Other Contacts
IR Audiences and their needs Primary contacts • Institutional Investors • Need direct contact, regular information flow • Active or passive style of tracking funds • Private Investors • Majority rely on direct communication and press comment • > Most not frequent traders and without ongoing relationship with a bank or trader • Financial Media • Disseminate corporate information to widest possible audience • Good relationship essential • Treat in same way as any other audience • Analysts • Sell-side • Experts on specific sector • Publish research to generate trade • Buy-side • Less sector focused • Research only used within one institution
IR Audiences and their needs Secondary contacts Corporate finance advisors Broking houses Stock Exchange(s) Legal advisors Registrars Reporting designers and printers Website developers IR consultants Auditors
The Rules of engagement • Manage the interface between the company and the capital markets • Manage expectations – internally and externally • Provide a clear, honest and accurate picture of past performance and prospects for the future • Provide value adding feedback for the Board and strategic developments • Keep up to date with regulatory developments • Keep up to date with capital market developments • Keep up to date with competitor developments
The Valuation game Reporting driven • Strategy • Goals and objectives • Organisational structure • Corporate governance • Market Environment • Competitive situation • Regulatory issues • Macro-economic environment • Value creating activities • Innovation • Brands • Customers • Supply chain • People, environmental, social and ethical • Financial Performance • Economic performance • Financial position • Risk management • Segmental performance
The Role of IR at Board level • Externally • Internally
Opportunities for IR Transparency and feedback
Effective IR strategies Aims • Improvement in financial community’s knowledge • Growing trading volumes • Rotation of shareholder register • Improvement in relations with banks and investors Monitoring progress
Effective IR strategies Measuring success Externally Internally
Thank you Claire Fargeot clairef@buchanan.uk.com Best Practice Investor Relations