Financial PR: Alternative disclosure

Because the AIM is less high profile than the main listings markets, getting its firms noticed is more difficult, finds Rob Gray

It's nearly nine years since the London Stock Exchange (LSE) launched the Alternative Investment Market (AIM). In its early days, AIM was dismissed in some quarters as an inconsequential market for minnows. Although it is true that most of the new listings on AIM remain small when set alongside typical IPOs on the main market, the reputation of AIM has been cemented by a steady stream of companies that have successfully raised capital.

AIM is certainly less of a second-class citizen than it used to be, but given that floats tend to be smaller in size, financial PROs are having to fight harder for attention from the City and the press.

'As the vast majority of AIM companies are capitalised between £10m and £25m, financial PR for them needs to be highly creative to establish a share of voice in a business media environment dominated by "big-cap" stories,' explains Beattie Financial managing director James Chandler. 'You have to work the story harder by finding interesting angles, use strong visuals wherever possible and drive home the potential market opportunity and growth story of the business.'

Better business

Last year was a far better one for AIM than 2001 and 2002. Last year also saw a record number of shares traded, at 57.6 billion. This year has also begun positively, with 19 firms admitted to the list over the first two months of 2004.

In fact, more than 1,300 companies have been admitted to the market since its launch in June 1995, raising almost £11bn in the process. The 760-plus companies listed today have a collective market value of £21bn. While this may be small in comparison with the LSE, these are not figures to be sniffed at.

In addition, the market has become increasingly cosmopolitan, with more than 60 international companies listed. Changes to AIM rules introduced in May 2003 brought in 'fast-track' listing for international companies whose shares have been traded for more than 18 months on one of nine designated overseas markets.

Nevertheless, in London, the Financial Times has more than 50 journalists who contribute to its Companies & Markets section, only one of whom is a dedicated AIM correspondent. This speaks volumes about the difficulties of securing extensive media coverage relating to an AIM float.

'Therefore the key challenge is making the most of the news the company has got - not giving it all away at once but letting it dribble out to support the marketing to investors,' says mj2 director Richard Sunderland, who was involved in the float of Center Parcs.

As well as working closely with the client company's management team, it is sensible to build a good working relationship with the appointed nominated adviser or 'nomad'.

The nomad's role in any AIM float is vital. It vouches that a company is appropriate for an AIM listing, in essence fulfilling a quality control function. Some nomads are more hands-on than others when it comes to PR, but all are integral to a float's success.

Bell Pottinger Corporate & Financial director Anne-Marie Wilkinson recommends working closely with the nomad on a marketing strategy, for example in developing Q&A material about the business and the listing that will be useful to the media and financial analysts. Wilkinson has worked on a number of AIM listings, including the debut in December 2003 of digital photo printing software company Pixology, which raised £8m through placing 5.7 million shares.

There are pivotal points in each listing that can be exploited to achieve coverage. The first is the 'Intention to Float' announcement, which flags up what the company does and provides a non-attributable guide to likely market capitalisation. This is followed by 'Impact Day', when the deal is done and the financial details are given. Then, when trading begins, there is the opportunity to secure further coverage if the share price rises.

For smaller deals and companies with a low public profile it may be necessary to offer a media exclusive or release as much information as possible all at once. But where strong angles can be found - for example, if the company is well-known because it is a retailer or in consumer goods, has a quirky or innovative business, or even if it features a well-known non-executive director on its board - there is greater opportunity to drip-feed news and secure better coverage.

Good photography can often make or break coverage. And whatever the tactics, investors and the media always want to know why the company is raising capital on AIM and what it intends to do with it.

Targeting the right people

Most listings on AIM are placings with institutions. Consequently, retail investors (individuals rather than institutions) are not a primary focus for a comms programme. Nevertheless, many campaigns target media such as the Investors Chronicle and specialist investing websites - as well as the nationals - to cater for the 'after market'.

Holborn chief executive David Bick explains: 'There are some big companies that have come to AIM, and we get a lot of calls on the IR side from private investors who are interested in taking up companies when they see the communications programme roll out.'

Given their size, many companies that list on AIM do not have an in-house communications resource of any kind, let alone a specialist in financial PR or IR. Financial PR agencies therefore bear a lot of the load. There is also the challenge of educating the client company directors about PR.

Vital AIM publicity

'There is scope, I think, to offer a strategic advice service,' says Wilkinson. 'There is a lot of grey area that falls between the advisers.

A lot of private companies or VC-owned companies don't really understand how the City works. There's an assumed knowledge on the advisers' side, but a lot of managers at the client company may not understand what a lot of the terms mean and may be too embarrassed to ask.'

This suggests that PR is often a crucial factor in the success or failure of AIM flotations as they don't demand the same level of attention as larger main market floats for the investing institutions. Publicity and the profile of the business are thus imperative.


Felix Group plc listed on AIM following a reversal by Felix Corporation into Chestnut Prospects plc, a cash shell set up by Michael Edelson in July 2003 to attract companies and businesses seeking admission to trading on AIM.

One of the key reasons behind the listing was to raise the appropriate finance required to move the Felix business forward - in particular, to develop a retail promotion machine to complement the existing premium-rate telephone service for its core consumer interactive medium. Called 'Everyone's A Winner', it is a sales promotion channel for the retail and leisure industry with data-collection capability.

'In listing on AIM, the communication objectives were twofold,' says Felix head of communications Mike Wallwork. 'First, to define the business in the context of a successful placement and admission on the stock market.

And, second, to begin to profile the company in the City, trade and consumer media.'

PR consultancy Holborn and 'nomad' Seymour Pierce played vital roles.

Wallwork says that, as with all PR of this nature, the ability to co-ordinate communications across a range of interested parties is paramount from regulatory and communications messaging perspectives. These parties included lawyers (Kuit Steinart Levy and Hammonds), reporting accountants (Horwath Clark Whitehill), tax advisers (Grant Thornton) and auditors (Hacker Young).

Felix achieved both of its objectives. In its first week on AIM, the company's shares rose from 20p to 35.25p, giving a market capitalisation of more than £33m. The story was covered by London's Evening Standard, the Daily Express, The Independent, Investors Chronicle and the Manchester Evening News, with share price commentary and coverage in the Daily Mail, The Sun, The Sunday Telegraph and FT, as well as numerous web-based publications.

'Most large corporate organisations tend to split product-based PR and financial PR,' adds Wallwork, former Royal & SunAlliance head of UK PR.

'The obvious main difference between RSA and Felix is one of scale. In communications terms this can make life easier, but a small AIM listing is no less complex an issue than achieving consistency of message from a big corporate organisation. The need to harness expertise and resources is the same.'

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