Craig Smith spoke to us about investor relations when he was the FD of Huntleigh Technology, a healthcare group.

How involved are you with investor relations?

I take ultimate responsibility for IR at Huntleigh. I have a very supportive chairman, Julian Schild, who accompanies me to the vast majority of meetings with analysts and investors.

What did you need to add to your skillset to take on IR?

I started with Huntleigh as group FD in 2003. It was my first “plc” role and I joined two weeks before the interim results announcement.

You could say it was a steep learning curve as I had to stand in front of analysts and investors and explain the performance of a company they probably knew better than I did. The share price did not plummet so I assume I did OK.

I do believe that there is a lot of common sense involved in IR. However, it is important to have a framework upon which to base this.

After I had got through my “baptism of fire” with the 2003 interims I went on an IR course run by the Quoted Companies Alliance and then worked with a consultant for six months.

I also created a database of IR contacts, which has proved invaluable.

I needed to understand the requirements of an IR website and how to work with a financial PR agency to get the message across to investors in presentations and in annual and interim reports.

What is the hardest aspect of IR and what has proved more tricky than you initially imagined?

Huntleigh falls in the “healthcare” and “small-cap” sectors and analysts and investors can come from either of these backgrounds.

The story that they want to hear can be very different and this can often mean a “chameleon-like” existence for the chairman and I as we meet them.

I think the element that I have found more tricky than expected is how to say “no”. We have a duty to make the same information available to all investors at the same time and so have to draw lines in the sand to decide what information we are prepared to divulge and what we are not.

When that line is crossed we have to refuse to give the information without adversely affecting a relationship that may have been years in the building.

Analysts and investors are only trying to do their jobs and it is often when they get an angle on an issue that they can really add value. I hope they understand our position.

How has the IR requirement evolved in the time you have been at the company?

When I joined Huntleigh the IR function was not particularly well developed. The company had – and still has – a large family shareholding and a fairly illiquid stock.

It had a legion of long-term and satisfied shareholders and only three analysts covering.

In 2004 we hired a financial PR agency and published our three-year strategic review. In my opinion, that was the catalyst for the increased interest in the company and, indirectly, the evolution of the IR function.

We are now covered by eight analysts and there have been several funds which have proved that there is available stock out there if you look hard enough and have built sizeable holdings from next to nothing three years ago.

The onset of International Accounting Standards means we have had to re-educate the readers of our accounts who were used to seeing them under UK GAAP. We published a document showing the ‘translation’ of our numbers from one basis to another.

How is your IR function structured?

Huntleigh has a small head office and no IR director. It is part of my remit to manage the IR function, ably assisted by my secretary.

Investor meetings are my responsibility along with that of the chairman. As a rule, we both try to be present whenever we meet fund managers, or whenever they visit us.

We work closely with our brokers, Investec, and our financial PR agency, Financial Dynamics, to ensure that we are meeting the right audience.

What are your tips for nurturing the relationship with a) analysts and b) your IR officer?

This one is really simple – be open, honest and available. Inevitably there will be times when you will be imparting news that is not exactly what they want to hear.

And at times like that it is best to tell the truth rather than try to spin the story. In my experience this will only come back to bite you later.

It takes a long time to develop a good relationship with an analyst but not very long to ruin one through a breakdown of trust. We are not in a position to be able to revise their expectations but there is nothing wrong with reminding them about something they may have disregarded.

How much of your time do you devote to IR?

There are certain times of the year when IR takes up the vast majority of my time, particularly around preliminary and interim results announcements.

We do spend a lot of time visiting actual and prospective shareholders – indeed I have participated in more than 200 separate meetings with them since joining Huntleigh.

Also, keeping annual reports, analysts’ presentations and the website up-to-date and fresh is very time-consuming.

IR is a very time-consuming, but ultimately very rewarding, part of my job.

Picture source

Related tags: share price, interim reports, investors, pr agency, quoted companies alliance, ir, fd, chairman, analysts, financial pr,