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Small Cap Forum 2020

This week we bring you our key takeaways from the different sessions at the IR Magazine Small Cap Forum held last week, as well as the key points from another recent webinar on earnings call preparation.

SNAPSHOT: Impact of Covid-19 – what are the emerging risks and future outlooks for small and micro-cap IROs?

Move to the new normal – spike in demand and use of virtual events.

This is an emerging situation. Build trust – add more substance to your story and define what the risks are moving forward. Tell the whole story and explain how you will get through the bad parts. When there’s uncertainty, be open – communicate and explain scenarios (there could even be an opportunity for a positive message e.g. margins are down because we continued to pay staff as we felt a social responsibility to their families and the community – a positive ESG story for the company). You can also take this time to focus on long term macro trends that will drive shareholder value.

You could consider carrying out share buybacks during this period to show the market that you have confidence in the business.

You have to be able to tell your story. What are the risks and what will propel your business? Explain the fundamentals, e.g. where do you make your money from and where do you expect to make your money from next year? From an investor perspective it’s great to see companies starting to offer this sort of detail.

Keep communicating. Stocks are sold not bought – be present, tell your story, disclose, communicate.

Separate the business story from what is happening now – this helps investor to understand what you are doing in the long run.

PANEL: Owning the narrative: strengthening your message and ensuring the evolving market understands the story

1 minute of video = 1.8 million words. 1 minute 30 seconds of video is the sweet spot for IR sites. Avoid dates in videos as it ages them, use ‘coming up soon’ or ‘recently’ to extend a video’s shelf life.  

Avoid industry jargon! As you navigate the next year plus, make sure that you are telling a consistent, concise story, focussed on the core strategy and provide updates on the execution of strategies and if there are modifications to strategies then communicate this. Embrace new technology to tell your story – use video. Make your words paint a picture and think about how people will remember you – can they share your simply explained story with others?

CASE STUDY: A real estate company reduced their 20 page deck to just 10 slides and told that story, which had a meaningful impact and they became the top performing real estate company in their country. 

Make content relatable – don’t say 250 square miles, say the size of Singapore.

Be more granular with your ‘about us’ section – don’t just say that management has over 100 years of combined experience, but e.g. the CEO discovered the largest gold mine in the world.

Make sure you take credit for the ESG work you do with a good sustainability website.

Use this unique opportunity to test, fail quickly and move on to what works best as well as to explore different geographies for investment through virtual NDRs etc. If you have left over budget from reduced travel, then consider digital marketing. And measure everything so that you can react accordingly.

Depending on your business, you could consider filming a tour of your operations and adding this to your website if this was something you have done with investors in person in the past.

Remember that the fact that someone bought your stock, doesn’t mean that they understand your story. Arm your large shareholders with your story in case they are contacted by perspective investors.

PANEL: Getting corporate access & investor targeting right in a virtual world

Best practices for NDRs

It is important to have a compelling investment thesis and correct materials to increase interest:

  • Address all topics that are at top-of-mind.
  • Reach out to relevant people.
  • Logistics (ask for phone vs video).
  • Ask for time (how to accommodate their schedule) – maybe allow for breaks in between.
  • Be patient and regroup if necessary.
  • No need to follow the usual 1-2 day program if doing a virtual NDR.

Mini analyst days (1-hour Q&A) are a good idea

  • Not only CEO and CFO, but also more executives.
  • Survey people for questions in advance to allow forward planning, with specific topics for analysts and to plan for talking points.
  • Increase flexibility and seek new approaches:
    • Technology has improved – if we ask for video, we expect everyone on video for face-to-face connectivity.
    • Do creative things to replace field trips for the company.
    • Can do more frequent, shorted meetings to increase connectivity e.g. 20-minute check-ins.
    • Increase the numbers of the management team present so that you can go into more detail and expand the scope.

Virtual burnout

  • Is a real thing.
  • A lot of content, and as this has become virtual the need for selectivity has increased.
  • Calendars have become too full.

Best practices for virtual

  • Key to carry out technology tests, send invites, confirmations, etc. and then follow up.
  • Take advantage of the accessibility of investors around the world.
  • Maintain time slots and when time slots are not used, consider grouping investors appropriately and into other time slots.
  • Send links to make it as easy as possible for attendees.

As always, Miranda IR is here to support you with any of your investor relations needs.

Link to the IR Small Cap Forum 2020: https://events.irmagazine.com/smallcap/