In our 3-part IPO blog series, we look at what you as an organisation can expect to see and experience Pre, Mid and Post IPO.
Working through the IPO Process can be time-consuming and intense. But when a company goes public it adds additional requirements that need to maintained and fulfilled to keep its current market position. If investor momentum through company communications is not preserved, trading of shares may decline, and the benefits of the IPO will not reach its full potential.
IPO’s change businesses. Because the company has taken on a number of new investors, it needs to maintain relations and deliver on the initial promises that were made prior to shares being sold. All whilst continuing to run and grow the business. A strategy must be developed for public relations, often involving an external PR company to assist. This will ensure the company falls in line with the rules and regulations, avoiding fines and embarrassment.
The overall business shouldn’t be put on hold because of the IPO, with the process finished it should enable the company to maintain its key objective to grow. The transition from private to public will bring a vast number of new investors. It is therefore essential that the company maintains transparency with these shareholders. Meeting reporting requirements on the company’s financial position and aims going forward, and timely disclosure of information is essential in order to please and maintain trust.
Successfully executing the initial aims that attracted investors, is vital. The company needs to demonstrate that is moving in the right direction, whilst adhering to market rules and regulations. Showing discipline and reporting so that the public understand how the business is performing, by swiftly dealing with constant threats to the business.
It is essential that a PLC has a Company Secretary, as they can play a pivotal role in the restructuring of corporate governance, processes, internal controls and any legal and financial obligations as well as the initial IPO process. If a company does not employee an in-house company secretary it will need to outsource the role to a corporate services business.
Company Secretary’s draw expertise from a vast array of areas; and can advise on corporate structure, board personnel, upgrade on internal systems as well as implementing group policies.
Ensuring that the correct procedure for appointing new directors is carried out. Also assisting with support and guidance to directors when needed. Certifying the company complies with statutory and regulatory requirements. As well as the introduction of corporate strategies and board decisions are followed. The company secretary also has a duty of communication with existing and new shareholders, acting as a point of contact.
Shareholder Documentation Preparation may include the following:
- SH01 (Return of allotment of shares)
- SH02 (Consolidate, sub-divide, redeem shares or re-convert stock into shares)
- RR01 (Re-register a private limited company to a public limited company)
- Annual Return
- Statement of capital following an allotment of shares
Being consistent and delivering on the initial promises outlined in the prospectus will please shareholders. If the company has a clear, concise message and vision, relaying information to shareholders well with understandable data so business progression can be tracked with ease.
Investor Relations Strategy
During Post-IPO phase, the newly-formed PLC should outline its Investor Relations strategy for the next year, creating a framework to expand and maintain the existing shareholder relations. This plan should include conferences, road shows and any analyst days and should include plans for things like preparation of quarterly events, shareholder outreach, investment conferences, market intelligence etc.
It’s essential that the company communicates with its investors well, in order to maintain key relationships and grow value for investors. Having an experienced team in place will only add value to shareholder communications.
Going public can place additional strains on the company. There comes a need to establish an effective process of internal controls, outlining the correct processes and upgrade outdated systems. Establishing an effective controls framework, the following industry standardised practices. Moving on from outdated and redundant frameworks to reflect the current business environment.Ensuring the company is up-to-date with all financial reporting standards, laws, regulations and policies is a must, as failure to do so puts the organisation at risk and may include updating things like reliability of financial reporting, feedback on achievement of company goals, compliance with existing laws and regulations etc.
As part of updating internal controls a new selection of a core business system. Companies usually hire consultants to help discover the right software package for the business ensuring it fits all the necessary requirements.
If all of this sounds a little daunting, but you have a desire to make your IPO listing a great one – then you need the best team on your side. Speak to us today.