IR app or twitter account? No, get your numbers on your website
We were intrigued this week to see the result of a survey by SNL asking investors, analysts and consultants what they actually wanted from investor relations websites. Our view is that IR apps are pointless, IR social media messaging is a nice addition but not essential, and that many IR websites are missing the most-requested information which is high quality, well formatted, easy to use financial and non-financial data on the company.
The function of investor relations is becoming more important as equity commission revenue dwindles driving fewer, less experienced analysts covering ever higher numbers of stocks.
Good companies understand that it is no longer feasible to expect a small army of analysts to translate your story for the fund manager world. That role is more falling on the shoulders of companies themselves and their IR departments and it is partly for this reason that Oakhall was founded. As one experienced IR director we know put it, their time used to be taken up 50:50 sell:buy side, but it’s now 10:90.
Many IR departments are turning to online communication to help with this task, but we’ve seen some strange moves in recent years driven perhaps by the misconception that IR is PR. Some IR departments have been congratulated for bringing out an IR app or twitter account. This seems to miss the point of when and where investors and analysts might be looking for investor relevant information on a company.
The word-cloud above shows their most requested additional information from the SNL survey, and it ties in very much with our thinking. Investors want to quickly get hold of detailed financial information, so it’s no surprise that Excel, Financials, Information, and Historical are some of the words highlighted. Few companies do this in easily digestible form – Microsoft is an example of best practise.
Few European companies do this. Most serious investors will want to build a model of your company. Pleasantly surprise them by providing a spreadsheet of your historic financials, including non-GAAP numbers and non financial KPIs, rather than have them spend hours building them up from your financial press releases.
Presentations was another heavily requested item. Some smaller companies still don’t post their results presentation decks on their websites, and even more refrain from including Transcripts or playbacks of those presentations (a warning sign in the UK is that the IR website seems mainly to consist of AIM Rule 26 regulatory text). This perplexes us – making investor information difficult to access just switches off another section of the investor population from looking at you.
On to context – almost 70% of those surveyed said social media presence was “not important at all”. This just isn’t how the investment world looks at the stock market. Most sit in front of Bloomberg screens or similar which are their main source of news and content. They look for detail when they come to IR websites. We don’t think a social media presence hurts, but it is not a priority.
Similarly, investors and analysts are mostly consuming IR content at their desks. Mobile and tablet consumption of IR content actually fell in 2015 compared to 2014 with only 15% of respondents saying that more than 25% of their visits were on mobile or tablet. 55% said mobile/tablet site compatibility was neutral or not important, and just 19% said a dedicated IR app was important. 19% seems high to us – possibly driven by the 18% of the survey driven by non-investor/analysts. Investors track tens or hundreds of companies, they are hardly going to have all their apps on their smartphone. Analysts will use apps like Bloomberg to see all their covered companies on one app.
The least useful information on an IR website was stock [price] information, which is ironically what appears on every IR site. Along with the ubiquitous There are so many stock tracking websites and services that no-one goes to a company page to check their share price, apart perhaps from company execs.
Save that cost of a price feed and spend it putting a spreadsheet of your historical financial statements and KPIs on your IR website.
Andrew Griffin spent almost two decades as a technology equity analyst before working in investor relations, corporate development and market intelligence for a UK listed software company. In 2015 he set up Oakhall to help European public and private companies.