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The Value of Financial Communication Presented by: James Chandler Weber Shandwick Square Mile 10 May 2005.

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Presentation on theme: "The Value of Financial Communication Presented by: James Chandler Weber Shandwick Square Mile 10 May 2005."— Presentation transcript:

1 The Value of Financial Communication Presented by: James Chandler Weber Shandwick Square Mile 10 May 2005

2 “Public Relations is the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organisation and its publics”. Institute of Public Relations 2005 …BUT WHAT DOES THIS MEAN?

3 What is Financial PR? PR IS Managing dialogue Generating favourable sentiment and understanding Creating positive and accurate press coverage Communicating key messages Building relationships with audiences PR IS NOT Misleading the media Avoiding the truth ‘Spin’ Long lunches Calling everyone “darling” or “sweatie”

4 Role of Financial PR (IPO) … the desired valuation and a healthy aftermarket Ensure management are fully prepared for investor roadshow and analyst/media contact Anticipate and manage any negative issues Assist in building an independent analyst following Build media profile for the business to support investor marketing Prepare management for life as a public company To support System C throughout the IPO – helping to deliver… Translate the investment case into audience specific key messages & materials

5 UK Stock Market – Key Players Sell-side Analysts Financial Media Buy-side Analysts Other Stake- holders Fund Managers Listed Company

6 The Three Phase IPO Programme Full perceptions audit Building a “fan club” Results and PLC obligations M&A support 1. Pre IPO IPO Launch 3. Post IPO 2. IPO Roadshow Presentations Impact Day & Start of Trading Statutory Obligations & Newsflow Preparatory Phase Investor marketing Media campaign Analyst outreach Message development Materials preparation Event planning for IPO launch Media & presentation training

7 What to Communicate? KEY MESSAGES What the company does How the company does it Why the company is different/important The potential of the company/market opportunity The strength of the management team NEWS FLOW Key timings –Intention to float –Institutional marketing –Prospectus and pricing –First day of dealings Keep the story alive –Management profiles –Product/service profiles –Diary stories

8 How to Communicate? Through The Media –Interviews –Press releases –Placed articles –Issues commentary/speaker opportunities Website Statutory reports (pathfinder/prospectus) Marketing material Direct communications –One-to-ones –Formal group presentations –Informal (breakfast, lunch, dinner, drinks)

9 Ongoing Communication (Post Flotation) News Generation –Statutory reporting –Additional news (consistent news flow) Additional Media Activities Research Features/issues commentary Placed articles/share tips Maintaining/building relationships Investor Relations –Institutional –Private Client

10 Overview - Handling the Media Time poor Embargoes Responding to questions –Plan your messages –Check quotes –Admit you don’t know –Never lie –Always call back –Avoid jargon –Don’t knock the opposition What the media are looking for Beware –On/off the record –Background EVERY INTERVIEW IS AN OPPORTUNITY

11 Impact of PR Should result in UNDERSTANDING by the media and investment community, specifically: Honest and accurate picture of the company A fair valuation An acceptable level of liquidity The ability to gain access to further capital as required Market ‘buy-in’ to business plan and prospects A market expectation that reflects reality Well informed audiences Favourable/accurate press coverage

12 Appointing a PR Advisor MAKE SURE AN ADVISOR HAS: Experience In your sector Cross border In your chosen capital market In financial transactions The necessary geographic reach A good track record –Demonstrable results (IPO and post IPO) –Press coverage –Creativity Senior advisors Competitive and flexible fees Strong contacts –Media/investment community

13 APPENDICES

14 Who We Are “Weber Shandwick represents high quality clients, is a proven leader in the field and a valued source of information.” “The Financial Markets PR capability at Weber Shandwick UK is second to none. Their grasp of the issues is very good.” Leading UK financial communications specialist - part of Interpublic Group –founded in 1988 –over 40 consultants with backgrounds in accounting, banking, journalism and PR –over 100 clients Experts in advising fast growing companies Extensive IPO expertise Extensive engineering sector expertise All advice grounded in thorough market intelligence Independent view

15 Why Work With Us? Excellent IPO experience Good sector knowledge Strong relationships with key analysts and press in London Complementary in-house expertise – Future Brand Geographical presence around the world – as and when you need it Independent counsel We guarantee a quality service from an experienced, senior team

16 Recent IPO Track Record CompanyActivityValuation Advisers 2ergo Mobile phone technology £35m Numis CustomVisLaser vision correction surgery£25m Collins Stewart Empire Interactive Games software £35m Altium FreeplayTechnology£11m Charles Stanley GW PharmaceuticalsPharmaceuticals£175m Collins Stewart Health Media GroupHealth publishing and services £11m Old Mutual IFX PowerPower supply technologies £135m Investec Incisive MediaB2B publisher£70m Investec InterregnumSpeciality & Other Finance £90m Teather & Greenwood MaximaSoftware£13m Seymour Pierce MedseaEstate Agent£60m Beaumont Cornish Music ChoiceInternet/Digital Music£190m Investec NTT DoCoMoMobile telecoms£84bn UBS Warburg patsystemsOnline trading software £135m Investec PRIPI Insurance£149m Collins Stewart Redbus InterhouseData warehousing£130m Collins Stewart Shore Capital Group Speciality & Other Finance£237m Strand Partners TeleunitWireless Telephony£20m Daniel Stewart The Innovation GroupInsurance software£241m Investec TopnotchHealth & fitness£28m SG Securities Torex Retail Retail software systems £60m EVBG VolvereActivist Investment Vehicle£4m Teather & Greenwood

17 Client List Abingworth ABN Amro A J Leisure Alba plc Alphameric plc Angel Trains Applied Optical Technologies plc Ashmore Inv Management Avesco Plc Avon Rubber p.l.c. Bank of Tokyo – Mitsubishi Barratt Developments PLC BGI Endowment Fund Limited Big Yellow Group PLC Blacks Leisure Group plc Business Datatote Cable & Wireless CAT Group plc Carclo plc Care UK Plc Chapelthorpe plc Cobham plc Clinton Cards PLC CLS Services Limited Colliers CRE plc Compel PLC Countryside Properties PLC CPL Industries CRC Group PLC Cross Asset Management Daejan Holdings PLC Danka Business Systems PLC Dewhirst DoCoMo Europe (UK) Ltd Dresdner Kleinwort Wasserstein Easybroker EBT Enterprise plc Expro International Group PLC Fenner PLC Ferraris Group plc Freeplay Energy GamingKing plc GB Group Glotel PLC Go-Ahead Group plc Guinness Peat Group plc GW Pharmaceuticals plc Hadleigh Hogg Robinson - Entegria - Paymaster - Claybrook IMI plc Instinet Global Services Integrated Asset Management plc Isle of Man Finance James Beattie PLC Jardine Matheson Holdings Limited KBC Advanced Technologies plc Kirkland & Ellis Intl LLP KPMG Lavendon Group plc LNM Group MasterCard Europe Matalan plc Mavinwood plc Maxima Holdings plc McCarthy & Stone plc Medisys PLC Medsea Estates Group PLC Merrydown PLC Microscience Holdings PLC Mid-States PLC Moore Management MS International plc MTL Instruments Group PLC Music Choice Europe plc Northern Racing PLC Omega Underwriting Holdings plc Omgeo Orc Software PMI Group (The) PZ Cussons plc Redbus Interhouse plc Reed Health Group plc Renold plc RiskMetrics Group Robert Wiseman Dairies PLC Royal Bank of Canada Royal Bank of Scotland RWS Holdings plc SV Life Sciences Scrittura Sempra Energy Serco Group PLC Shore Capital Group plc Sira Business Services Plc Smith & Williamson Squire, Sanders & Dempsey Staffline Recruitment Group plc The Innovation Group plc TripleArc plc TWIST UCM Group plc Ultra Electronics plc Urbium PLC Volex Group p.l.c. Volvere plc Weil Gotshal & Manges Wilmington plc Wren Homes Group plc XL Capital XP Power plc ZOO Digital Group PLC

18 CASE STUDIES

19 Freeplay is the first company to successfully develop and patent technology that enables human exerted energy to be captured, stored and delivered in electrical form. This energy can be used to power a range of devices including radios, torches, mobile phone chargers. Weber Shandwick Square Mile was mandated last year to advise on its fundraising, announced on Tuesday, 15 February, via a private placing in January 2005 and subsequent a placing of shares on AIM. Awareness of Freeplay’s base product was already relatively high, given the early publicity for the wind-up radio technology developed by Trevor Bayliss and its involvement in aid programmes. Our activities needed to explain how this technology had been developed into a strong, commercial business which provides proper returns for potential shareholders while continuing to benefit developing nations through the Freeplay Foundation. This has been successfully achieved through the development of a presentation and recent press coverage which highlights Freeplay’s ability to create, develop and supply and international market for an increasingly wide range self-powered energy products. It is expected that the shares will commence trading in early March Freeplay – IPO

20 2 ergo - IPO 2 ergo, whose products and services facilitate communication and interaction between companies and their staff or customers using mobile internet, SMS, MMS, web and voice applications, had targeted a listing on AIM for the beginning of March When Weber Shandwick Square Mile was appointed at the beginning of February, its first task was to write the presentation to be given to potential institutional investors. It was felt that the WS team had demonstrated an excellent understanding of 2 ergo’s product, which was proving difficult to explain, and the presentation was key to the success of the institutional meetings. The IPO was to take place at a time when the market was beginning to pick up so consequently there was significant competition for interest from both institutions and analysts, and for press coverage. Subsequently, 2 ergo raised the total funds required and the Offer was more than twice oversubscribed. Press coverage was focused around Impact Day, with positive articles endorsing the flotation in the key publications. Shares in 2 ergo started trading on 11 March 2004 and went to a 10% premium in the first few hours of dealing.

21 CustomVis, an Australian laser vision correction (LVC) company, needed communications support around its AIM Listing in July One of the first companies to attempt a listing on AIM that year, the company faced an exceedingly tough market Against this background, the company also had to address the issue of the poor reputation of LVC surgery in the UK. Weber Shandwick was hired to help develop a compelling investment proposition story around CustomVIs and to ensure positive analyst and media support around its Listing on AIM. The WS team decided to address the market’s concerns about LVC “head-on” and developed an integrated media and analyst relations campaign to generate publicity based around key milestone announcements throughout the flotation. The team helped manage the market’s expectations of valuation throughout the six week IPO process. Ultimately, the flotation was a success, with the Offer more than twice oversubscribed. CustomVis was only the third healthcare company to successfully float on AIM in 2003 and recorded a share price rise of 5% on the first day of trading. WS helped achieve both positive press coverage and sell-side analyst coverage. CustomVis decided to retain WS’s media and analyst relations services post flotation and also asked it to take on the role of investor relations adviser. CustomVis - IPO

22 WSSM’s IPO team in London was hired by NTT DoCoMo to provide a full financial PR service, in conjunction with WS Tokyo and WS New York, for the dual-listing of NTT DoCoMo shares on the London Stock Exchange and American Depository Receipts on the New York Stock Exchange in The team faced the challenge of poor reputation/understanding of 3G technology in the City and amongst the UK financial media. In addition, there was little or no previous recognition of DoCoMo’s brand/achievements/reputation outside its domestic market of Japan. WSSM managed the coordination of financial PR activities across three international offices and supported a management team unfamiliar with UK financial culture. Using media exposure to enhance the understanding of both the company and its technology, WSSM targeted key sector journalists to reinforce the key selling messages. In addition, WSSM offered advice on press releases and speeches and briefed the management team on key issues. WS organised a pan-European press conference at the London Stock Exchange and attained comprehensive coverage in national, Pan- European and broadcast media. The campaign and listings successfully positioned NTT DoCoMo as the leading player in 2.5G/3G mobile technology in the UK and Europe. NTT DoCoMo – International Listing

23 GW Pharmaceuticals - IPO "Weber Shandwick Square Mile provided valuable PR advice throughout the IPO process and, equally important, they have maintained this important role in the years following our introduction onto the public markets. We continue to enjoy an excellent working relationship with their team.” Justin Glover, Managing Director, GW Pharmaceuticals WSSM was hired to help develop a communications programme for GW Pharmaceuticals in GW represented a world first – a company developing a non-smoked prescription medicine derived from cannabis. The IPO took place in Summer 2001 in a difficult new issues market. With such a high profile subject, which was complicated by regulatory issues and legalisation debate, the WS team recognised the need to develop clear, concise and consistent key messages to support the Listing right from the outset. Furthermore, the team decided to adopt a strategy of focused media and analyst programme to garner serious, credible coverage of the Group’s Listing. WSSM was also involved in developing the investor presentation and related materials to ensure the market fully understood the complexities involved. The team achieved widespread positive coverage in national, international and broadcast media and the flotation was significantly oversubscribed, with the funds raised being increased in response to institutional investor demand.

24 Torex Retail – Accelerated IPO Torex Retail, which provides point-of-sale software, enlisted Weber Shandwick Square Mile to help with its innovative accelerated IPO in February Isoft sold Torex Retail in a £64.5m management buy-in on 18 February and the equity was then sold directly to the institutions in a two-part funding: £25m before the admission to Aim, and £22.5m on admission. The WSSM team helped raise the profile of Torex Retail during the accelerated IPO process, securing substantial positive press coverage and analyst interest. On 2 March Torex Retail floated on AIM. The shares were already placed (with the institutions and management) at 40p, giving a market capitalisation of approximately £60m. Its shares subsequently soared by more than 50 per cent above the issue price, valuing the group at £91.4 million - one of the most successful flotation's in London since the height of the dot-comboom. "Weber Shandwick Square Mile did a really good job in a very condensed time frame and everyone at Torex Retail is delighted with all the very positive coverage we have had.” Robert Loosemore, CEO, Torex Retail

25 Contact Weber Shandwick Square Mile James Chandler – Director Fox Court 14 Gray's Inn Road London WC1X 8WS Direct:


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