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For companies looking to join the Main Market and begin the flotation process, corporate communications can be an important and valuable tool. An ongoing PR programme is fundamental to establishing and maintaining a company's profile and is a key component to ensuring a successful flotation.
Joining the Main Market offers considerable benefits to companies. Gaining access to capital to fund business growth and an enhanced international profile are key advantages. So, too, are offering a new currency for acquisitions and the staff motivation that a listing encourages. But in order to realise the full potential of these benefits, the positioning of your business is important. Investors are selective and will look to invest in those companies with a strong and well-established corporate reputation. As a company you will need to be transparent, committed to building long-term value for both customers and shareholders and become an active member of and contributor to the communities to which you belong.
Reputation adds value
So, does reputation have value for a company? Absolutely. Reputation is intrinsically valuable and can set companies apart from their competitors. That might mean the difference between a high and modest valuation, or – in tougher times – between a successful market debut and a failed issue.
It should also be recognised that, following the global financial crisis, the world is markedly different. In the UK, for example, an already cynical media industry is now only too ready to voice strong opinions about companies that stand out for the wrong reasons. There is also a growing view in many quarters that companies do not just exist to create value for shareholders: they must also demonstrate that they serve the interests of a wider group of stakeholders, which includes employees, analysts, potential investors, the media and the community in which the company operates.
In this chapter we explain why good communications are instrumental in achieving a successful IPO and how a well-constructed PR campaign can add value to your proposition through building and maintaining reputation. This runs from the preparation stages of defining your objectives and understanding your audiences, through to executing an effective strategy within the confines of the IPO timetable. We also look at life beyond the IPO and how communications, done well, can help you maintain the valuation your company deserves.
Set your objectives early on
It is critical that communications objectives are set from the start of the IPO process. Of course, it is important to be flexible, but you will need a clear plan to follow, and it is vital that your communications objectives dovetail with your overall strategy. At the core of this is the need to:
- build a strong, credible story – introduce management to stakeholders and explain why the company is a 'must have' investment opportunity build the relationships that matter – ensure you have a 'fan-club' ready to support you
- position the IPO as a stage in the company's development, not as an end in itself.
- define key overall objectives – maximise advantages and minimise risks
- preparation is paramount – build value in advance to attract the investors you want
- set long-term expectations – a successful IPO is the starting point, not the finishing line
- be ready to communicate in a clear, effective and transparent manner.
And don't forget…
- work towards the good times, but prepare for the worst – you must have a crisis communications plan.
Be prepared
As part of ensuring that the IPO runs smoothly, it is necessary to prepare for unexpected events that have the potential to impact negatively on the process. You should have a crisis plan in place to deal with any issues that arise, whether concerning the IPO itself or from an operational perspective.
Understand your audiences
In order to achieve your objectives, it is important to identify who your different audiences are, as well as understanding their needs, objectives and – crucially – how they interact with each other.
The IPO will be one of your company's most newsworthy events, and this news will be of interest to a wide range of stakeholders including media, investors, analysts, employees, trade unions, trade associations, customers, partners, regulators, government and a variety of opinion formers. These stakeholders form a complex matrix, informing each other and shaping the response to your IPO. The structure of this network means that public market transactions can face a much higher level of scrutiny now than in the past few years, and you need to be prepared for this.
While communication across all stakeholder groups must be consistent, it is also important to address the interests of individual audiences. For example, all stakeholders will want assurance of the company's long-term growth potential, but potential investors will need convincing that they can make a return on their money, and employees will want to know that their jobs are secure. Anticipating and appreciating the needs and interests of each group will allow you to run your communications strategy smoothly.
A strong public relations campaign is central to any flotation, particularly in an environment where many established norms are changing. It is important to understand the evolving media landscape and consider how different forms of media can help you communicate with your stakeholders. Traditional print media has gone digital with specific online coverage, podcasts and vodcasts; digital-only publications have sprung up; and social media and user-generated content have exploded. In addition, we now have citizen journalism, where anyone with a mobile phone can report on a story and share their views with a wide audience.
In the past, PR was often seen as an added extra, bolted on towards the end of the IPO process shortly before the official 'go live' date. This inevitably meant that external communications were secondary to the rest of the IPO activity. But the increased scrutiny of quoted companies brought about by the financial crisis means that this is at best ill advised, and at worst potentially damaging to the entire IPO process.
Start your PR early
For this reason, PR considerations should be worked into the overall strategic plan right from the beginning of the IPO process. Indeed, it is better to think of PR around the IPO as part of your overall communications strategy and not as a one-off project – just as the IPO itself should be seen as an integral part of your company's longterm business strategy. This holistic view will best be able to address the different but interconnecting interests of your various audiences, so achieving the overall aim of building long-term value by establishing your company as a superior investment opportunity.

Identify your story
To this end, your PR agency should work closely with you and your other advisers from early on in the process to identify and develop your corporate story. This will ensure that all regulatory guidelines are followed and, if you are working on a dual listing, that the needs of each regime are identified and respected. Once the right story has been developed, it will be included in IPO marketing materials, regulatory documents and press releases.
Make the most of it
Having the right communications story in place as early as possible will allow you to make the most of the opportunities thrown up by the IPO process. Typically, this falls into three phases:
- the corporate or pre-offer phase – where the objective is to raise awareness and understanding of the company as a potential investment opportunity
- the offer phase – where the emphasis is on the details of the offer, the timetable and the subscription period
- the post-offer phase – capitalising on the success of the flotation and building on the long-term, strategic goals of the company.
Preparation, preparation, preparation
Your communications strategy should be coordinated around these phases. Focusing on PR during the pre-offer phase means that you can start to raise the profile of the business prior to the live IPO work. The aim of this is to begin the value-building process early, raising awareness of your company and thus laying a good foundation for the later fundraising activities. Once you enter the offer phase, communications activity will take place around the most important events typically occurring in the IPO timetable:
- announcement of the intention to float
- announcement of the pricing range
- announcement of the final pricing
- announcement of first-day dealings.
A regular stream of positive announcements and updates will help maintain momentum and keep the investment opportunity in front of your audience.
This is crucial as it will run through the entire IPO process, linking up the work you do with potential investors, press, analysts and your own employees. The 'story' will need to answer these questions, and potentially others:
- What aspects make your company stand out?
- Why is your company the best recipient of investors' money?
- Why are you right to come to a public market?
- How will you use the money you raise?
- How you will ensure long-term success? You will need to be able to answer all these questions and deliver your messages in a short, succinct and memorable way.
Announcement of intention to float
This will be the first time that you will be declaring your plans publicly. Typically, your financial PR agency will work with you and your other advisers to choose the best time to 'go live' with the story and decide which tactics to use in order to achieve maximum profile. The press release that is issued at this time will reflect the corporate story already identified, and will describe the company and its main attributes, set out the anticipated timetable for the IPO and include quotations from the company's management. If other supporting material (such as an analyst's note) is also available, this can be packaged up with the press release to provide positive accompanying commentary. Photography can also be used – a good picture can enhance the attraction of the story. All in all, the intention to float announcement is a chance to start the fundraising process in a positive, high-profile fashion – crucial when trying to compete for investment.
Pricing range
With the issue of the pathfinder prospectus, a further press release can be used to announce the pricing range of the IPO. Media expectations here need to be handled carefully to ensure that the IPO will be perceived as a success. This is particularly important in the UK, as the media will often look for bad news and want to highlight IPOs being priced towards the bottom of their range.
Announcement of final price
Once the marketing period is completed, the final IPO price can be announced. Again, care needs to be taken here to ensure that this is positioned appropriately.
First-day dealings
An announcement can also be issued to mark the first day of dealings on the stock market. This is a good opportunity for management to brief external research analysts on the story, as well as alerting market commentators to the stock on its market debut. While these are typically the fundamental stages in the IPO timetable, your PR agency and advisers will work to identify any other suitable opportunities to support the marketing process, if appropriate. These could include profiles of senior management and news of appointments or contract wins.

In their annual reports and accounts statement, it has become commonplace for chairmen of listed companies to acknowledge that the company's most valuable assets are its staff and to thank them for their efforts over the year.
However, it is less common for companies to remember this when planning their IPO. All too often, communication with staff is something of an afterthought, coming late in the process and, as a consequence, failing either to counter the fears staff may have or to help obtain maximum value from the flotation.
Keep your staff informed
When considering a flotation, one of the first internal communications steps is to decide when and how to advise staff of the decision to list. This will always be something of a balancing act: weighing up the desire for confidentiality with the need to ensure that staff are appropriately informed, and see the listing as a welcome and exciting event for themselves and for their company.
It is important to recognise that, in most industries, few members of staff will be familiar with the process of a company joining the market. They may also harbour fears that the listing will prove to be a catalyst for additional change within the business – something that may threaten their job security.
Hopefully, internal communications procedures within the company are already compliant with best practice, with meaningful dialogue with staff established as the norm rather than the exception. If that is not the case, plan well in advance and work with your PR advisers to audit and upgrade your internal communications as soon as possible.
Make sure they understand the process
You can probably afford to tell staff about the potential listing rather earlier than you might imagine. Tell them what it means for the company and – vitally – what it means for them. If you plan to introduce incentive programmes for staff at, or prior to the IPO, inform them, but make sure that you communicate clearly, avoiding financial jargon. Staff also need to understand what they can and cannot say to their contacts – most likely your customers. There is little point in setting out on a campaign of customer communications if the customers' day-today contact points – your staff – are uninformed and uncertain of what the listing means. None of this is to suggest that your staff should or could become official spokespeople for your company at this important time. Rather it is to recognise that they need, at the very least, to be aware of the issue and to whom any questions should be referred.
Engage and communicate
The increasing use of social media will have a significant influence on the way that you should communicate with your staff. You can be sure that once informed of the listing, staff will discuss this among themselves online, and equally sure that, as a result, this debate will be visible to the outside world. So any evidence of disquiet among staff will be only too clear to potential investors and others. Engage and communicate with staff, understand their concerns, address their questions and ensure that achieving the listing becomes a joint objective – something to which they can all contribute.
The communications strategy should flow from the objectives which have been set out at the start. They should dovetail together in order to make a robust, distinctive, credible case about your company's qualities and ensure a successful flotation.
Effective co-ordination of communications enables the release of information to take place in a controlled and strategic manner. This will reinforce the perception that the flotation is being professionally managed by the company and its advisers.
It is essential that the flow of communications should build momentum and keep the story intact, maintaining the focus on the business and the investment case. Clear, consistent communication with all stakeholders will not only help your company navigate through potential pitfalls, but will build and protect its reputation and brand in subsequent years.
Throughout the duration of the campaign, it is essential that the timing and sequence of messages are carefully managed and the momentum of the campaign maintained. Without careful preparation and guidance, it is all too easy to create misleading perceptions or expectations, which will adversely affect the outcome of the flotation. Communication of key information must be clear, comprehensively prepared and consistent with the agreed timetable.
When the IPO has happened and you are quoted on the Main Market, you must continue to communicate openly. Make sure your members of staff are all aware of their responsibilities in connection with the handling of material or pricesensitive information. Remember them when you are communicating company results or corporate developments, such as major contracts or joint ventures. There can be few things more demotivating for staff than finding out about news affecting their company and their working lives from the newspapers or social media outlets.
Internal communications – done well – will add significant value to your IPO and your communications with staff could, over time, prove to be the most valuable of all.
After many months of preparation and much anticipation of a successful outcome, you have finally made it – trading in your company's shares has started, hopefully at a premium to the offer price. You have become a member of one of the world's most exclusive clubs. It is unlikely to mean, however, that now is the time to relax.
Keep up the good work
The regulatory rules are clear on what is required from listed companies in terms of disclosure and communications – and the mindset which should be adopted throughout the IPO marketing process is no less meaningful once a company is on market.
In order to achieve and retain an optimum valuation for your shares, only those companies with the highest reputation for transparency will succeed. Put simply, increasing cynicism from media and investors alike means that merely complying with the minimum levels of disclosure required is not likely to be enough. Investors and the media are only too ready to judge companies, not just on the accuracy and completeness of disclosure, but on their whole approach to communicating with the market. Any sense that the market is being informed of anything less than the full story will be punished by a lower valuation than might otherwise be achievable.
There is, of course, a balance to be struck here. Investor and analyst appetite for information on listed companies is potentially limitless. You must decide what information is most relevant, most helpful and which – vitally – will not be damaging to your business if it were in the hands of competitors. There is an increasing and welcome trend for information given to investors in corporate presentations to be made available more widely, often via a dedicated Investor Relations section on the company's website. Making information available in this way limits the scope for accusations of selective briefing of institutional investors in advance of the dissemination of information to the wider market.
Make disclosure work for you
In the early meetings with your new investors, and in the information that is released more widely at the same time, you will set the benchmark for what investors can expect from you on an ongoing basis. Bare compliance with the rules will be noticed and may well be marked down. In contrast, fulsome disclosure in a style that indicates the value you place on stakeholders' understanding of your business and the role it plays in its various communities, will stand you in good stead. Remember, too, that the market may well be suspicious of those companies that start with admirably high levels of disclosure but backtrack over time.
Take advantage of the communications opportunities
Having set the tone and content for early communications, what are the opportunities for telling your story? Well, the good news is that the financial calendar offers plenty of chances to update the market throughout the year (see chart above).
There are of course the annual and six-month results announcements, when full disclosure is made of the financial results for the period. These also offer the opportunity to provide an update on current trading and the outlook for your business. In addition, you can update the market in Interim Management Statements twice a year and again at your Annual General Meeting. Keep up the dialogue Following the formal announcement of your results, analysts will expect a presentation from the company, expanding on the information in the press release and offering an opportunity for questions around your strategy and details of delivery. These presentations – and the dialogue that they generate – are pivotal in developing relationships with the analyst community and ensuring that those analysts understand your company and the markets in which you operate sufficiently well to provide realistic estimates of your expected financial performance.
But while investors, analysts and the media will want regular communication, beware of issuing too many press releases. You will want the market to listen closely to what you have to say; that is far more difficult if they become used to a frequent stream of largely inconsequential announcements about your latest customer win. Consult closely with both brokers and financial PR advisers on this to ensure you get the balance right.
You should also think carefully about your approach to social media and how to manage messaging in the digital age. News travels fast and can cross from customers to investors, and from analysts to financial journalists, in seconds. The power of the internet means that these conversations are increasingly conducted in public, via social media channels.
Invest in PR and reap the rewards
Most of all, the media demands transparency and ready access to the senior management of your company. You should expect to commit your own time to building relationships with important journalists and analysts. By helping them to understand your business and the challenges it faces, you are far more likely to get a fair hearing when things are tough – or to get the coverage that you want on a busy news day. Taking communications seriously from the beginning of the IPO process, right through to your life as a listed company, will add value to your business and pay dividends. Done correctly, it will allow you to take advantage of all the benefits of the raised profile that a listing on the Main Market can bring.



