Transcript The Road to Listing – CEO’s insights: Rationale for

The Road to Listing - CEO’s insights:
Rationale for Listing and Process
“The 2nd of June 2011 was one of the
most beautiful days of my life.
Everything came together that morning and
it was as if life rewarded all our efforts.
This was the day we listed CURRO HOLDINGS
on the AltX of the JSE …
Experience in gearing up for the listing
• If one can find a corporate shareholder which is already
a listed company, it makes the listing process much
easier and credible. In our case, PSG invested R50
million in our company for 50% of its shares.
• It helps if your company has a successful growth pattern
before you list. This will re-assure potential investors that
a listed environment will help the company to carry on
with its growth, but that growth will then take place far
more aggressively.
Experience in gearing up for the listing
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Begin to prepare at least 12 months before the target date for your listing.
A listed environment calls for much more administrative discipline. In this
preparation period, one should ensure that:
(a) Memorandum of Incorporation is finalised and in order.
(b) Your Employee Trust is established.
(c) Financial reports should be accurate and available at least on a
monthly basis.
(d) Management accounts should be updated on a 24/7 basis and the
CEO and the Executive Committee should fully understand the layout
and implications of the management accounts.
(e) An organogram, including the key performance areas and key
performance indicators for all critical staff, is of utmost importance.
(f) Criteria for business success should be available and disseminated to
all your managers.
Rationale and benefits pre/post listing
Pre-Listing
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It is easier to raise capital in a listed environment, but it calls for
accountability: “How are you going to spend your investors’ capital and on
what?”
Your exposure will increase rapidly.
Your profile will become exponentially bigger and at once.
Your credibility will suddenly increase: Bankers, third parties and clients will
show their respect.
A listed company will install confidence amongst investors and clients.
The motivational value amongst your employees and clients is huge. Do not
under estimate the proud factor: Everyone in your company will feel good to
be part of a listed company.
Rationale and benefits pre/post listing
Post Listing
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After the listing, one has to deliver according to the promises of your prelisting statement.
If the market buys into your growth story, you have the option of doing rights
issues.
If your company performs according to the pre-listing statement, it is very
likely that your share price will increase. This normally happens twice a
year: At half-year results and at year-end results, provided that you
performed according to the pre-listing statement.
Process, requirements and timing
• Appointment of a designated advisor is a requirement
imposed by the JSE.
• The designated advisor maintains a close relationship
and constant liaising with the JSE, and hands-on
guidance for the client.
• The company must appoint an appropriately qualified
executive financial director, whose appointment must be
approved by the DA.
Process, requirements and timing
• A realistic business plan would be your most precious
tool. This tool keeps every manager and stakeholder
focused on your business aims and strategies.
• Your financial information should be well prepared and
ready at least 3 months before listing.
• Depending on your Designated Advisor, a listing can
happen 3 to 6 months after you made the decision to list.
I strongly recommend PSG Capital (Material Included).
Advice and highlights
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You work with the shareholders’ money: Be transparent at all times and
spend enough time on those big decisions.
Maintain positive relationships with the media and always react if they
phone you up. React positively: The media is your strongest marketing tool.
Be pro-active: Phone them up if you have interesting news. Do not be
scared of sharing the bad news with the media. Honesty always pays!
It is rewarding to see one’s share price climb. Do not stress if it goes up and
down: This is quite normal. Rather compare your weekly results with your
pre-listing statement.
Some writers, especially those who do not understand your business, will
write negative stories about your company. Get used to it. Others will write
positively.
Do not try and get hold of the negative people. Ignore them.
Be pro-active with press releases and appoint a media-officer.