This article was originally published on Finsbury.com
Following the release of the joint statement from the UK FCA, FRC and PRA on investor and capital markets communications during COVID-19, Sarah Morgan, Director in our Investor Relation practice, has put together 5 tips for IRs during this challenging time.
Consider communications carefully
Avoid rushing market updates; it’s far better to produce an update of value to analysts and investors rather than needing to restate afterwards
Q1 trading updates are approaching fast; assess whether you are fully aware of all company financial developments and obligations that need to be met, or whether you are able to wait
Determine whether there is genuine value in holding group webcasts or conference calls – analysts look for numbers and you may not yet have any to give. Management involvement may well be risky and yield little upside
If you have important news that’s unrelated to COVID-19, you can still release it. Audiences may not reach it immediately, but they will in a quieter period
Sharpen materials and channels
Review your website to ensure key information is clear, up-to-date and easily accessible. In particular, information about debt, liquidity and covenants can often be tricky to find and will be subject to increased scrutiny
Don’t assume everyone knows where to find your data; even analysts miss available information so be prepared to point it out
Keep up day-to-day contact with analysts and investors
Maintain regular dialogue – your contact will be valued and even if you cannot provide further information and numbers, you can point contacts towards publicly available sector data to guide their assessments
Focus on investor priorities
During crises, investor attention is focused on the upcoming weeks rather than years, so it is vital to communicate clearly on the following areas:
Resources: explain what makes your business robust and clarify your cash position in terms of its value, accessibility, level of short and medium term liquidity and related supplier arrangements;
Actions: address how you are going to manage expenditure in the short term, including capex and pensions obligations and in relation to any government support;
Futures: cite potential longer term opportunities or changes to business model or strategy. Discuss how your shorter term decisions impact on resources needed to have a viable future
Don’t forget ESG: you have the opportunity to highlight how your company is working with the community and practising good governance
Prioritise your main shareholders; marketing to non-shareholders in the current environment will be challenging and a non-optimal use of management time.
Stay close to management and the business
Keep on top of company operations and advise on required communications
Feedback internally what market is saying
Keep management and business armed with intelligence around peer activity, share price and financial performance and changes in guidance
Avoid share price panic: keep management focused on what they can control and remind them of the context
Seek support and guidance from advisers – we are here to assist you!