Weekly Wrap Up: Rollercoaster rides across the Boards

In the last month, we have seen two significant disasters befall FTSE Companies. Thomas Cook, a subject already covered by this blog, apparently hit every PR pitfall possible following the results of the inquest into the deaths of Christi and Bobby Shepherd in one of its hotels in Corfu in 2006. Then, we witnessed a tragic accident at Alton Towers, which left Merlin, the park’s owner, scrambling to protect its brand.

However, the different strategies employed by the two Companies led to wildly differing outcomes, not only in public perception, but also to their share price. Thomas Cook, as stated previously, refused to apologise, failed to contact the family, and only handed over (half) of the compensation they received to charity when it became untenable for it to hold onto it in its entirety. Clearly, a omnishambles of epic proportions.

Compared to this Merlin appeared to handle its own disaster, a crash on one of its rollercoaster’s, with as much tact as was possible in the circumstances, save for the initial delay on calling the ambulance. The park did its utmost to appear open to investigators, apologised to the victims immediately and unreservedly, and its CEO Nick Varney immediately gave interviews outlining what the Group would be doing to improve safety across the board.

Indeed, the public clearly thought that the Company’s response had been sufficient because when Kay Burley, a Sky News presenter, used aggressive interview tactics in an attempt to unsettle Varney which spectacularly backfired, as almost 2,000 people complained to Ofcom about her conduct. On top of this, an online petition calling for Sky to sack her received 50,000 signatures. If Kay had done this to Peter Fankhauser, CEO of Thomas Cook, such is public feeling, the petition may well have been for her to receive an OBE.

It was not only in the public gaze where Merlin came out on top. Investors, clearly spooked by Thomas Cook’s woeful handling of the situation, deserted the stock, seeing it fall from a high of just under 500p to 430p today. Merlin on the other hand saw lesser losses, from a high of 470p to 435p.

This, above all else, proves the positive benefits of good crisis PR. Here you have two listed Companies who broadly act within the same sector, entertainment & leisure. Both have suffered crises within the last month, and only one handled the situation correctly. Unsurprisingly that Company has come out on top. Firms, looking at tightening their PR budget, should look at the cautionary tale of Thomas Cook and realise that it may well prove a false economy.



This week, Abchaps enjoyed a multitude of events including Baker Tilly’s Mad Hatter’s Summer Tea Party soaking in the evening views from their roof terrace, a day at the races at Ascot; and the AIM 20th Anniversary Summer Party at the Artillery Garden off Moorgate.



Zeus Capital appointed Phil Walker as Head of Healthcare Corporate Finance. He most recently was Executive Director in Corporate Finance at Nomura Code Securities. Charles Stanley hired Ben Money-Coutts as Chief Financial Officer. AIG appointed Nicola Ratchford as head of external communications for Europe, Middle East and Africa. She joined from Stockwell Communications, where she was a director.



"Omnishambles" – Not a new word, with references ranging from The Thick of It to the OED’s word of the year in 2012 and Ed Milliband, but surely the only way to sum up Thomas Cook’s handling of all recent PR.



This weekend enjoy a variety of great theatrical performances and live music as the More London Free Festival takes place for the thirteenth year.

This summer Taste of London returns to Regents Park to with a “Flavors of the World” theme. In addition to deliciously prepared food, there are various beverages to swash the food down, both alcoholic and non-alcoholic.

For the second year running, Greenwich Peninsula’s The Jetty is home to an incredible performance of “Heartbreak Hotel”, so do not miss the opportunity to be a part of this exciting event.

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Asian Companies Listing on AIM

In the past few decades, the Chinese economy has experienced phenomenal growth. And while growth had since slowed, it can’t be ignored that in 2014, China became only the second country in history (after America) to achieve economic output in excess of $10 trillion. In fact, even at the current rate of growth, China expected to surpass the US as the world’s largest economy within the next two decades.

It is no wonder then that foreign investors have been looking for ways to benefit from the Chinese success story. And there are plenty of Chinese investment opportunities right here in the UK. SMEs in China have long struggled to secure capital from Chinese banks and that has sent them elsewhere, including London’s AIM market.

But more recently, the reputation of Chinese AIM listed companies has taken a serious hit. It seems that after a few scandals involving Chinese companies, the market has lost faith in all of them. The problem for most Chinese companies therefore seems to be the result of suspicion and rumour. Of course, this is unfair – the Quindell and Tesco scandals have not resulted in investors blacklisting every UK Company.

So the question is, what can Chinese companies do to increase their appeal to UK investors and continue to tap a valuable source of funding through the AIM market? The simple answer: Transparency. After all, the best way to quash suspicions and rumour is by getting the truth out. So for any Chinese companies listing in London, effectively communicating to potential investors from the beginning is critical – and there are plenty of ways to do this.

The suspicions surrounding Chinese companies listing in London are largely fuelled by a literal lack of visibility. So first and foremost, Chinese companies seeking admission to the London Stock Exchange need to bear in mind that potential investors are based abroad and therefore not able to directly observe the day to day operations of the business. Transparency, achieved in part through increased publicity, is therefore key to bolstering investor confidence.

But an effective communications program requires much more than reaching out to the UK national and investor press only briefly ahead of the IPO. Companies need to communicate through wider media outlets and for a longer period of time in the build up to Admission in order to achieve a successful and hopefully oversubscribed fundraising.

One way to do this is by launching Corporate profiling exercises on the home front. Even when targeting a predominantly overseas audience, the relevance of local and trade press coverage should not be underestimated before an IPO.

This is particularly salient for smaller companies. UK journalists are unlikely to have heard of an Asian based SME considering an AIM IPO. If British journalists can discover an existing profile through good trade and local press coverage (and where appropriate a social media profile) as they go online for further information, it will increase the likelihood of positive UK press coverage at IPO.

Local media coverage is also important for investors, as it plays a key role in reassuring their confidence. If a company attempts to promote itself amongst UK investors without an already established press profile, it could make a company’s story, no matter how compelling, harder to believe. And given the current climate of suspicion, that is risk Chinese companies simply can’t take.

Simply put, a proactive communications program is strong evidence of a company’s willingness to honour its commitment to new and existing shareholders. And, perhaps more importantly, increased transparency will help reassure investors and help regain trust of the market. This strategy will not only help Chinese companies: With London seeking to cement its status as the world’s leading financial centre there is simply no way investors here can dismiss companies operating in a country set to become the world’s economic powerhouse.

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How to profit from Chinese consumers’ growing demand for food safety

When the Chinese government recently released its first policy paper of the year, known as the “number one document”, food safety was listed as one of its top priorities for 2015. It’s a policy decision that will certainly be welcomed by Chinese consumers. However, at the same time it serves as a stark reminder of the many food safety scandals that have plagued China in recent years.

First there was the tainted milk scandal in 2008 that sickened an estimated 300,000 babies, killing six, after they consumed milk powder tainted with melamine, a chemical compound often found in laminate flooring and dry erase boards. This scandal was followed by several incidences involving tainted pork. In one incident the pork was treated with paraffin and other industrial chemicals to make it look like beef, which is more expensive. In fact, selling fake meat in China is a fairly common practice.

However, the high number of nausea-inducing food scandals is very much at odds with the rapid rise of China’s consumer class. China’s strong economic growth has resulted in a wealthier population, which in turn has increased levels of consumption. With increased purchasing power comes the demand for higher quality, and this is especially true in terms of food consumption.

While the government has already made some efforts to crack down on food safety, the public remains sceptical. After the tainted milk scandal, for example, there was a significant drop in domestic output of baby formula. The Chinese consumer made it clear that safety matters, and subsequently almost half of the country’s milk powder market has now been dominated by foreign brands, which are perceived as more trustworthy.

What this tells investors looking to cash-in on China’s changing consumer class is that reputable food suppliers are a pretty good bet. Reputable doesn’t always necessarily mean foreign though: One high-profile food safety scandal in China involved a U.S-owned meat factory operating in China that sold tainted meat to clients including McDonald’s, Starbucks, KFC and Pizza Hut.

Aquatic Foods Group Plc seafood product

One company that defies the food scandal stigma in China is Aquatic Foods Group Plc. The marine foods and seafood processor, which recently successfully listed on London’s AIM market, spent many years adhering to international food safety standards and procedures that mitigate the risk to consumers. Aquatic Foods’ strong track record of exporting to international markets, has further enhanced the perception of quality and reliability at home something which the growing Chinese Middle Class demands. In short, Aquatic Foods is helping to fill the gaping hole in Chinese consumer demand for safe and healthy food.

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What was really behind AIM’s revitalised 2013 performance?

There is a tendency in January to look back and become a little wistful about the previous year; the highs, the lows and all that seemed to run remarkably quickly in-between. Maybe it’s the influence of a little too much festive cheer (obviously, referring to the copious amounts of turkey).

There are now facts and figures (rather than just after-dinner chatter between Corporate Financiers discussing their Q1 / 2 pipeline) which detail the success of the AIM market in 2013. According to UHY Hacker Young’s latest AIM report:

• £881m raised (70% increase on 2012)
• 56 companies joined
• 25% fewer companies left (delisting or insolvency) than 2012. It is widely considered that the Alternative Investment Market is now competing with the FTSE main markets in terms of generating returns for investors.

What has changed to drive this growth?

Have increased regulatory sanctions aligning AIM companies corporate governance with those of the main market shed its reputation as the wild-west of exchanges? Perhaps the government’s effort to facilitate SME innovation, such as “patent box” tax breaks for biotech companies, have captured the imagination of investors? Or has the inclusion of AIM stocks in ISAs provided a fresh incentive?

Journalist David Prosser looks to another veritable driver as he questions whether the audience that AIM appeals to may be responsible for the ever-improving performance. AIM is a market of opportunity for “ordinary investors” to pick out overlooked and undervalued stocks that institutional investors have missed.

Whilst realistically the answer lies in the healthy combination of all these factors, there is one integral (and often undermined) point that has changed:

The maturity of companies coming to market

Maturity does not just equate to the amount of years a company has existed, but it can also be quantified in terms of wisdom and forward thinking; in other words, how thoroughly did the company anticipate and plan an eventual exit.

Companies are beginning to consider their exit from inception… they are not only concerned with profit margins, but also considerations such as working cost of capital and the maintenance of growth. They want to create the optimum final valuation of a well-structured Company that has water-tight Corporate Governance. These factors give investors more confidence upon entry into the public domain and later in the secondary market.

The investment story

The increased maturity of companies is also reflected by their decision to consider financial PR at an earlier stage during the IPO process. Companies are realising that their investment story cannot be created last minute. An integrated communication strategy should be prepared to position the company correctly to key audiences and manage market expectations of their stocks at an early stage. Some of the most successful IPOs of 2013 have proven the virtuous circle of commitment that exists between investment in PR, IR and share price.

An Abchurch client, SyQic, the fast growing OTT provider of live TV and on-demand paid video content across mobile and internet enabled consumer devices, demonstrated a successful flotation when it’s shares soared 30% on it’s first day of dealings following an over subscribed road show thanks to a well communicated investment story. 

Return to the status-quo

Many in the City are now looking ahead to 2014 with eager anticipation. What exciting, profitable and increasingly international companies are going to debut on the London junior market in 2014? The answer, in all likelihood, is many. And yes, there will be some that falter, but we must remember that this was the case pre–2008 too. The existence of one or two non-starters does not indicate the existence of a so called bubble in London markets, but rather a return to the natural status-quo. But as David Prosser pointed out, the AIM market is now a more dominant force and will continue to go from strength to strength.

Stephanie Watson

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Weekly Wrap Up: The Royal Charter won’t silence the whispers

The British media were in uproar this week after Wednesday’s announcement that an independent cross-party Royal Charter for press regulation had been approved.

British press publishers had been pushing for High Court judges to place an injunction that would have stopped ministers seeking approval for this new charter. The injunction was refused, the charter approved, and the path paved for the soon to be formed Independent Press Standards Organisation (IPSO).

Editors have made their feelings clearly known; The Times Editor Roger Alton was quoted as being “extraordinarily depressed” and The Spectator Editor Fraser Nelson considers it to be an “illiberal proposal”.

And perhaps it is. One of the arguments sitting at the core of this debate is one of democracy. The British media has always prided itself on maintaining democracy through freedom of speech and subsequent heightened Government accountability. Will the introduction of IPSO threaten said accountability?

In theory, yes; an independent monitoring body would undoubtedly threaten democracy by blunting the point of the media’s knife-edge against totalitarianism.

In practice, however, how effective will this new IPSO body really be in controlling what is and is not published in our red-tops, broadsheets and nowadays apps?

Running simultaneously to the British publishers waving their publications at Lord Dyson, former News of the World Editor Rebekah Brooks and former director of communications at Downing Street Andy Coulson were appearing at the Old Bailey to answer to the charges from the phone-hacking scandal.

What came to light in this shadowy house of justice is that not only were the pair responsible for the sourcing of incredibly private information, but that they were also linked in a highly charged love affair. In a letter written in 2004, Rebekah Brooks wrote that Mr Coulson was: “my very best friend. I tell you everything, I confide in you, I seek your advice, I love you, care about you, worry about you”.

As Andrew Edis, QC, for the prosecution pointed out: “Mrs Brooks and Mr Coulson are charged with conspiracy and, when people are charged with conspiracy, the first question a jury has to answer is how well did they know each other?” Mrs Brooks’s letter to Mr Coulson certainly answers the question.

A number of the stories at the heart of the “Hacked Off” campaign, such as those regarding Sir Paul McCartney and David Blunkett, involved information that had been shared through lovers’ whispers and coffee-house gossip. The fact that the pair confided a great deal in each other demonstrates the amount of whispered information that must get blown down the Street of Fleet and through the alleyways of the City.

Indeed, Andy Coulson was once quoted as saying: “people talk, it’s known”. This comment suggests that even with an independent body regulating journalism techniques and output, it can be safely said that people will continue to talk and share news as they have always done, whispers will still be spread, and journalism; both political, financial and celebrity, will still rely to a certain extent upon information that press regulators will never be able to control.

In reference to par. 17 of Section 3 of the newly formed Royal Charter (as recommended by financial journalist Paul Lewis: “The Board should not have the power to prevent publication of any material, by anyone, at any time although (in its discretion) it should be able to offer a service of advice to editors of subscribing publications relating to code compliance.”

If this week has highlighted anything of interest to the City it is that having total control over what is being communicated and shared both inside and outside of board meetings is still absolutely essential. Whilst the Royal Charter will ensure that rogue journalism is caught up and monitored, press freedom still exists and will continue to exist (even if only in whispers).



A very busy week for Abchaps with a lot of movement around the City. The resources team attended the Baker Tilly Natural Resources reception at the Park Lane Hilton earlier in the week. One Abchap joined the President of the Shanghai Pudong Develop Bank (SPD) in the launch of their London Office, whilst another went Green at the Envirotech and Clean Energy Investor Summit, as well as a United Nations special on “Is a 'Green Industry' approach the key to competitive edge?”



The UK government makes a bit of history this week as it not only appoints its first woman, but also its first black person, as a permanent secretary at the Treasury. Sharon White becomes second permanent secretary and will be responsible for overseeing the fiscal squeeze whilst she manages Britain’s public finances.

Winn Faria has migrated from his role as COO at management consultancy firm ASource Global to become the director of Baker Tilly’s Financial services risk department.

PwC has strengthened its energy and low carbon team with two new appointments Ronan O’Regan and Steve Mullins. O’Regan shifts his PwC role from the energy financing team to head its UK renewables practice, whilst Mullins is welcomed as the new smart grid leader.



'Super-Injunction' - A legal gagging order which not only prohibits the media from reporting the details of a story, but also prevents mention of the existence of the injunction itself.


Remember remember the fifth of November, gunpowder, treason and plot! Celebrate Bonfire Night at one of the many London events being put on this weekend. Check out LBC Radio’s in depth analysis of this year’s spectacular pyrotechnics happening across the capital!

For those scared of things that go bang in the night and those beginning to get those festive feelings, its time to rejoice as the Natural History Museum enchanting Ice Rink makes its debut opening this weekend. So don your skates and ear muffs, get down to Gloucester Road and get gliding!

Finally, for those that missed out on Halloween shenanigans this week with it being a ‘school night’, fear not as The Halloween Playground takes over the deep, dark tunnels underneath Waterloo Station. Fancy dress is compulsory as The Vaults hosts chilling cabaret, musical voodoo and “devilishly good DJs”.

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Weekly Wrap Up: A Tweet to Yesterday affects Share Price of Today

On Thursday, the Israeli Defense Forces (IDF) tweeted in remembrance of the (1973) Yom Kippur War, making reference to an Israeli air strike on Syria. Upon hearing this news, traders reacted and raced to buy more oil, the consequence of which was that the price of oil increased by $1 by barrel. This was despite the fact that the tweet mentioned “soviet weapons” and included the hashtag “#YomKippur73”…

Firstly, this shows how twitter content can be incredibly influential on our markets and economy. Secondly, it demonstrates that we no longer read the news. We scan it.

There is a proliferation of communication channels that we synthesize in order to form our opinions; a proliferation that has both positive and negative implications. On the positive side, it means we now have a broader view of what is going on around us on a minute by minute basis. However taking the cynical stand-point, this story also demonstrates the potential danger of these communication channels: in order to make our way through all of this information, we scan our news feeds and websites as opposed to reading them. Our brains tend to pick up on key words that trigger alarm bells, thus forcing us to act first and think second. So the traders on Thursday read the words Israel/ Syria/ Air strike, and reacted. Instantly.

There are two take home messages here: Firstly, whilst the content of our tweets is undoubtedly crucial, our choice of words and the structure is also important. Is there any way they may be misinterpreted if scanned at speed?

Secondly, and more importantly, we must remember who our twitter audience is and how important it is to communicate news via the platform. Twitter is no longer just the playground of the ex-facebook crowd; traders, analysts and other key influencers are also signing up and logging in.

We've all been mulling over how twitter may change post-IPO. The general consensus is that twitter will have less clutter and spam accounts after the float. Perhaps Thursday’s traders may give twitter a swerve for a week or two, but there is no doubt that the rest of the rest of us will carry on logging in…

This week Abchaps hosted a high-brow China market lunch, as well as attending the Temporis Capital Drinks reception, and a fascinating debate about Impact Investment at the Social Stock Exchange.

One of the highlights of the Alternative Investment Market’s calendar is the AIM-awards dinner that took place on Thursday. As well as being a guest of Meridian Equity Partners, we hosted a great table with guests from Cenkos, Sanlam, Naibu, CroweClarkWhitehill, Bird & Bird, SpAngel and Versarien. Congratulations to Allenby Capital who won Best Research Award.

This event certainly put us in a winning mood, which is appropriate considering that on Tuesday Abchurch was shorlisted for PR firm of the Year at the Quoted Company Awards. We are very much looking forward to the awards ceremony on the 29^th January 2014.

This week has seen a shake up to the big accounting and advisory practices: Grant Thornton appointed Usman Malik as director of mergers and acquisitions, Smith & Williamson appointmented John Rugman, previously of PwC, as head of valuations and finally Baker Tilly welcomed a selection of new partners to its London office - Andrew Conti, Chris Knowles, David Moran, Steve Jacob, and Mark Nisbett, congratulations!

Also on the move, Luke Whitmore of Baker & McKenzie has migrated to law firm Field Fisher Waterhouse where he is to be partner in its derivatives and structured finance division.

"Financial Shenanigans" - Acts or actions that mask or misrepresent the true financial performance of a company or entity.




Fresh from it's sold out run at Edinburgh Fringe, the hilarious Gothic comedy The Curse of Elizabeth Faulkner written by Tim Downie is on Every Thursday, Friday and Saturday from now until the end of November at the Charing Cross Theatre.

This weekend mark’s the end of London Cocktail Week, so no better excuse for a tantalising tipple! Head out to celebrate our capital's unrivalled cocktail culture at one of the many pop-up bars, tastings, parties, master-classes or even go with one of London’s 150 pre-established cocktail venues. 

For some artistic culture, opening today is the exhibition “When Britain Went Pop - British Pop Art: The Early Years” at Christie’s new Mayfair gallery - displaying 140 rare pieces of work from the likes of Eduardo Paolozzi, Gerald Laing, Allen Jones and his First Step and Swingeing London to Richard Hamilton’s famous depiction of Mick Jagger. 

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Weekly Wrap Up: Hester la vista

The big news to hit the City this week was the surprise announcement that Stephen Hester was stepping down as CEO of RBS. Tasked with turning the bank around, restoring it to profitability and overseeing its privatisation, his sudden announcement sent shares in the bank plummeting by 8%, wiping billions off its value. Although it partially recovered during the day, the fall out led to other banking shares tumbling as well; Lloyds dropped by 0.9 per cent, Barclays by 2.2 per cent and Aberdeen Asset Management by 4.3 per cent.

There has been anger from the City in response to George Osborne’s handling of RBSgate, with fury at the fact Hester was basically booted out by the Chancellor. It is clear that the two held divergent positions over the restructuring of the bank and also about the scale and pace of change. For all Osborne’s talk about entering the next phase of the RBS story, the message is the same. The government’s long held position was to refocus the bank towards consumer and business lending and cut down its investment banking operations. As Lord Lawson, former Tory Chancellor said “Essentially RBS is a retail bank dealing with SMEs and he [Hester] is an investment banker.”

Alongside the announcements of thousands of job cuts at RBS, some of which will be in the City, his £1.6 million pay out plus deferred share awards of up to £4 million and further privatisation announcements expected next week, the outrage from the City is set to continue.

This week Abchaps attended the Industry Lab on Healthcare at Bloomberg and a CIPR speakers lunch with John Hughman, editor of Investor’s Chronicle. We celebrated our Creative Director Boydie’s birthday in the Sky Bar. On Friday we hosted Versarien in our offices alongside Mark Russon of the London Stock Exchange, to congratulate them on their first day of dealings on AIM. 

The big City mover this week is undoubtedly the resignation of RBS Chief Stephen Hester. The chief executive of five years is to stand down at the end of the year as the UK government starts the transition to sell its 82% stake and return the bank to private ownership.

Paul Tucker is to leave his job as one of the Bank of England’s deputy governors. Mr Tucker is to leave in August, ahead of the end of his term, and plans to spend a period of time in academia in the US.

Amongst the City’s law firms, Fox Williams has appointed Helen Farr as a partner within its employment team and Lewis Silkin welcomes Adam Glass from Davenport Lyons as a partner in its media, brands and technology team.

Small Cap broker Westhouse Securities appointed a new finance director. Andrew Proctor leaves N+1 Singer to join the small cap institutional broking house.

Celebrate World Gin Day at Gin Stock 2013. For £36 a ticket, guest of the festival will be treated to some of London’s best bars, bartenders, live music and street food all day from midday to midnight and at the home of Street Feast London, Kingsland Road. http://www.streetfeastlondon.com/#!saturday-events/cp6w

For all you British Patriots, head down to Whitehall this Saturday for the annual Trooping of the Colour and celebrate the Sovereign’s official birthday. Events begin at 10am with the fly-past at 1pm. http://www.royal.gov.uk/RoyalEventsandCeremonies/TroopingtheColour/TroopingtheColour.aspx

London’s Southbank plays host to Yoko Ono’s Meltdown. From Friday 14 – Sunday 23 June, Yoko is curating a series of events and unique collaborations. There will be performances from Siouxsie, Iggy & The Stooges and talks and debates from the Guerilla Girls and Hans-Ulrich Obtrist http://www.southbankcentre.co.uk//whatson/festivals-series/yoko-onos-meltdown

Head down to the Oxo Tower for renowned photographer, Roger Hooper’s exhibition in aid of WWF. Roger has captured animal images from across seven continents. http://www.rogerhooper.co.uk/
http://www.list.co.uk/event/20434384-roger-hooper-art-in-the-wild-june-2013/

Key insights into Chinese London listings

Today we hosted a China Advisor lunch in our London office to discuss the City’s reception to Chinese business and how it could be improved in the future. The idea for the event came about at the beginning of the year when one of our Chinese clients Camkids plc, based in Fujian province, received a spontaneous round of applause at the end of its presentation to a group of private client investment managers. The audience was clearly impressed to see this Chinese business performing ahead of expectations and the share price enjoying a healthy climb since its first day of dealing on AIM. We know that other Chinese companies do not always experience the same positive reception in London and were keen to find out what could be done to improve the situation.

The lunch was co-hosted by John McLean who has been involved in China since the late nineties and has significant experience as a UK Director of a number of Chinese businesses. He is also a Board member of the China-Britain Business Council and Chairman of VSO China. 24 China advisors and key influencers attended what was the first ever gathering of its kind in the City to address the specific issues of lack of institutional appetite, actions the City could take, and what Chinese companies wishing to list in London should do. Some guests gave short speeches which encouraged the debate; these included an analyst viewpoint of recent Asia deals, the LSE’s strategy towards China and institutional attitudes to Chinese business. Our office was transformed into a beautiful Chinese influenced dining space.

To get a better understanding of the City's opinions of Chinese business, we sent out a brief survey with the invitees asking three questions:

• Why is the investment community often reluctant about investing in Chinese business?
• What actions could be taken in London to improve this situation?
• What actions should a Chinese company consider to make a successful London listing?

We received a lot of very insightful responses and are currently undertaking a keyword analysis to determine the findings of the survey.

However, a snapshot analysis has given some interesting insights. The top reason given for the reluctance to invest was poor market performance, with corporate governance issues being a close second. Respondents to the survey thought that the best action London could take to improve the situation was better market/ City education for Chinese businesses, and the top-line action a Chinese company should consider before a London listing is to appoint English speaking Directors to the Board. While it is already a requirement to have at least one English speaking Director, it shows that the Chinese businesses may not be communicating their updates effectively enough.

We thoroughly enjoyed hosting the event and engaging in some challenging and thought provoking discussions; judging by the feedback that we have already received the guests had a great time and learnt a lot too. We look forward to hosting more events similar to this in the future.

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How to IPO: advice for Cleantech companies

Event: London Stock Exchange Cleantech IPO Forum 2012

Date: Wednesday 20^th June

Location: London Stock Exchange, London, UK

On this picturesque British Summer morning, the Abchurch Cleantech team made the short venture across the City to
Paternoster Square and the London Stock Exchange for the 2^nd Annual Cleantech IPO Forum; a 'How to IPO' guide for cleantech companies considering floating on the Stock Exchange. Organised by Clean Energy Pipeline, we were pleased to be a sponsor alongside other IPO advisers Bird & Bird LLP, KPMG and Nomura Code Securities.

After arriving at the building and navigating through the rather intimidating revolving doors, we were greeted by the alluring aroma of coffee and breakfast pastries. As the clock struck 9, a great selection of Cleantech companies were ushered through to the auditorium where the conference commenced with a welcome note from Sam Rossiter, Product Manager of Capital Markets Events at the LSE. Kicking off the presentations was Axel Kalinowski, Business Development Manager of Primary Markets at the London Stock Exchange. He gave an insightful overview of the Main Market and AIM, the current IPO climate and the benefits of listing in London. Following Axel was Clean Energy Pipeline’s CEO, Douglas Lloyd. He spoke about the recent trends in the clean energy sector, highlighting that whilst 2012 may follow a similar dip in investment deals as in 2008/9, there is still a growing appetite for investing in the sector and it will continue to function as a major growth driver. The last speaker for session one was Ken Rumph, Director of Research at Nomura Code, who gave an eloquent presentation on what investors look for. Some of the key issues he raised included, first and foremost, that investors are looking to make money and that companies need to make their business case clear and concise; explaining why would people buy your product over competitors? A strategic approach would be to focus more on commercialisation and less on technology or green credentials - these can always be expanded later. Secondly, set out realistic milestones and plan ahead; make a checklist of things you are going to and have achieved. And finally, ensure you pick the right advisors; they need to understand the market, your underlying business model and have the chemistry to develop strong relationships. A Q&A session on public offerings concluded round one.

After a rejuvenating coffee and biscuit break, session two kicked off. First up was Connie Mixon from MyCelx giving a thorough case-study overview of the IPO process; from what to expect in life as a listed company on AIM. She similarly stressed the importance of your advisors, and in particular, how beneficial the Financial PR house was - comments which we greatly appreciated hearing! Bird & Bird LLP then navigated us through the legal issues of taking a company public. Matt Bonass and Vanessa Young addressed what to expect from the lawyers, the choices of market on which to launch and IPO preparation. Another Q&A session and coffee break and it was time for the final round. Gregory Hughes, director at KPMG, talked through the financial reporting pre and post-IPO. He highlighted the regulatory requirements necessary on the main market and AIM, the role of the reporting accountant, their work and deliverables. Key components included the construction of the Prospectus/Admission Document, the long form report (a core part of the financial and commercial due diligence for an IPO) and the ongoing requirements post IPO for both the company and accountant, e.g. financial reporting and interim management statements. Then it was Abchurch’s time to shine as our CEO, Julian Bosdet took to the stage. In a well-received presentation on how to IPO most succesfully, Julian informed the audience on how to communicate with investors and the media. He stressed the role of your financial PR advisor in helping to construct and roll out an effective, integrated communications strategy. The aim is to reach all target audiences through the press and analysts during an IPO – including all levels of investors, as well as employees, customers and industry partners.

The concluding presentation summarised a fund manager’s view with respect to investing in cleantech. Hyewon Kong from WHEB Asset Management explored the key themes and factors driving stock selection. There was a strong focus on sustainability; capturing new investment opportunities created by long term social, demographic and environmental challenges. They are not just looking for a product and how it brings benefit to the society and environment, but companies which provide real solutions to the challenges. These cleantech companies need to illustrate how they will maintain margins in an increasingly competitive landscape and have a focused strategy in terms of growth.

The resounding message of the conference on IPOs seemed to agree that while it is a volatile market at present and investment has seen a slight downturn as some fund managers concentrate on maintaining their current portfolio rather than investing in new companies, the cleantech theme remains a strong growth driver. In particular, investors like companies which are driven by regulation, as they may be somewhat insulated by the economic climate and public spending cuts. So, why IPO? Intial public offerings and life as a publically listed company offer enormous benefits; from increased access to capital to greater efficiency and corporate governance.

Overall, the conference was an excellent opportunity for companies to get a full grasp of how to IPO and what is involved in the IPO process, to identify the key players involved and what to expect when you decide to float on the Stock Exchange. For any ‘newbie’ into the industry, it acted as a constructive and worthwhile training morning, answering in great detail the popular "What is an IPO?" question. We heard the full IPO story directly from the industry experts and I would highly recommend attendance for future conferences. And, if your own personal development isn’t quite enough to tempt you, after the final closing remarks, you are served up with a delicious two course lunch and a chance to network and meet some of the experts.

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Institutional Investors in AIM Breakfast 2011

On Thursday 20^th October Julian, Jo, Quincy and Oliver attended the Institutional Investors in AIM 2011 breakfast, organised by Vitesse media.

Whilst the equity markets have continued to be incredibly volatile, the fact that Vitesse’s report revealed that institutional investors still have some £37.3 billion invested in AIM, up from £32.7 billion last year, should give all those involved within AIM some much needed confidence leading into next year.

With the continued malaise within the eurozone, it should not come as much of a surprise that institutions such as Blackrock and Henderson Global Investors are focusing their investments on emerging markets. Africa in particular, with its wealth of natural resources and minerals, has attracted a lot of investor interest, similarly, Asia and South America.

Following the presentation of the report, the breakfast provided all the attending advisers with an opportunity to network and it was great to see lots of familiar faces. The concluding remark of the report, that 54% of AIM is still owned by institutions, reiterated to all that even in tougher markets, there remains an active investor interest in growth companies with strong investment stories and quality management teams.

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LSE Chief advocates for SMEs

“There are 21.7 million people unemployed in Europe, and 23 million SMEs. If each SME were able to take on one more person…?This is why governments across Europe must look at all they can do to assist SME growth; these businesses are the essence of our future prosperity,” said Xavier Rolet, CEO of the London Stock Exchange last night at the AIM annual awards ceremony.

This year, the old Billingsgate Fish Market (built in 1874) hosted the event, which has arguably the best views of Tower Bridge in the city. Over 1,300 guests attended the dinner, comprising  AIM quoted companies, NOMADS, brokers, accountants, lawyers and public and investor relations firms, making it the largest AIM gathering in the City. Sponsors of the event ranged from Argus to Zeus. And the overall winner of evening, taking the Company of the Year Award was May Gurney.

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AIM joins in on Global IPO fever

A recent piece of research commissioned by Ernst & Young has offered all those associated with the financial markets reason to feel optimistic heading into the second half of the year. The report notes that Global IPO fundraising activity has risen by 38% in the second quarter of 2011, compared with the same period last year. Focusing on Europe in particular, the report comments that IPO fundraisers in the second quarter amassed to a huge 534% increase in capital raised, compared to the dealings from the first quarter of the year. Of particular note was the fact that dealings conducted on the London Stock Exchange were themselves responsible for US$12.6bn of the US$17.7bn raised within Europe’s stock markets. Whilst the blockbuster IPO fund-raiser of the Swiss commodities trader, Glencore, no doubt heavily contributed to this buoyant up-turn in capital-raising, further market sentiment would suggest that the London Stock Exchange is enjoying a very active period. In turn, the increase in Global IPO activity has also been heavily mirrored on the London Stock Exchange’s AIM market. The number of companies joining AIM has more than doubled to 16 in the second quarter of 2011, up from just seven in the first quarter. Furthermore, AIM has already completed 19 IPOs this year, with June in particular having been an especially strong month; the IPOs in June managed to raise £169.5m which was the highest amount raised on the market for six months. Market reporters suggest that the current trend of IPOs on AIM is set to continue throughout the second half of the year. Abchurch is certainly seeing an increase in activity and the team are working on a number of floats at the moment, one of which, Spectra Systems, a US specialist in advanced technology for banknote authentication floated on AIM in late July. Early indications suggest that Spectra Systems has continued the current IPO fund-raising trend on AIM by managing to raise £15m; a strong advance on the £5m initially hoped for. Furthermore, Spectra enjoyed a happy first day of dealings with the share price up to 78.5p having floated at 75.3p. .


Olly B


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The Life Sciences Party

Date:
29th June 2011

Location:
The Abchurch Offices; 125 Old Broad Street

Attended by:
A selection of the life science City Financiers in London, a selection of the VC community and a contingent of the life science media, together with a number of young and exciting companies.

The Event:
With the Abchurch Life Sciences Team growing from strength to strength it only seemed appropriate to open our doors to the Life Science community for an evening of champagne and canapés, and give the newest member of our team, Jamie Hooper, the opportunity to meet and mingle with others in the industry.

In our series of themed events, this was our first Life Science party and it must go down as another great Abchurch success. We had a fantastic turnout of guests, all with a keen interest in the sector, either as analysts, journalists, corporate financiers or company Board members. We were delighted to have Nigel Brooksby, former Chairman of Sanofi-Aventis and current Chairman of the UK Life Sciences Council, give a short talk to kick start the evening, giving guests plenty of food for thought. One interesting, though controversial, point Nigel raised was that biotech “thinks pharma is slow and bureaucratic”, while Pharma “thinks they already know everything”. Quite how this will be addressed as Pharma and biotech need to work more closely in the future is still to find out. He was certainly opinionated – as an experienced industry specialist should be – and a great champion of UK biotech.

Abchurch’s Creative team rose to the occasion and the inspirational ideas really added that touch of genius to the evening. With waiters wearing purple Abchurch branded scrubs and a menu including gazpacho served in brightly coloured test tubes, seared beef in kidney trays, health and science was most definitely the theme. My personal favourite, the crème de la crème of the evening was a selection of jellies served for desert imaginatively presented in Petri dishes. With raspberry & rose, elderflower & gooseberry and lime & lemongrass flavours, exactly what they were supposed to look like, we won’t mention here – suffice to say they were realistic!

Many commented that it was refreshingly different to other events they had attended and it made for a thoroughly enjoyable and useful networking evening. I am looking forward to what creative surprises we can expect with a Green Gathering on the cards for October. The bar has certainly been raised.

Rebecca

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LSE Aim Conference 2011

Mark Hoban MP and Marcus Stuttard, Head of AIM

The annual AIM conference, held at The London Stock Exchange, was an excellent opportunity for AIM-quoted companies to stay up to date on the latest developments and trends affecting the market, and to network with peers and key industry figures

This year Abchurch sponsored the event alongside PricewaterhouseCoopers, BlackRock and Religare Capital Markets and met a wide selection of AIM-quoted companies along with investors and members of the small cap community.

Raymond Greaves (Head of Research, Religare) kicked off his presentation by saying: “AIM is an excellent place to be as a growth company but…you must have a good story to tell and execute well and…you need good advisors.”

Our CEO Julian Bosdet guided the CEO and Finance Director delegates through Building Relationships To Attract Investors. The importance of a cohesive approach covering retails investors, Private Client Investment Managers (PCIMs) and institutional investors was picked up well by the audience. With institutions unlikely to take a position through buying from retail investors, PCIMs are a very effective way of packaging up shares currently in retail hands to sell on to larger buyers.

The conference kicked off with a welcome from David Snell, Partner at PwC, who also presented later in the day on ‘Securing AIM’s Future’. The welcome was followed by an introduction delivered by Xavier Rolet, the Chief Executive of the London Stock Exchange.

A keynote address delivered by Mark Hoban MP, Financial Secretary to the Treasury, praised the role AIM plays in supporting growing businesses and the UK economy. He said:

“Small and medium sized business enterprises play a vital role in our economy, providing both jobs and services throughout the UK and beyond. As a government, we are committed to supporting SME’s and have launched a range of initiatives including reform of EIS and VCT, funding for new Enterprise Zones and improving access to credit facilities for smaller companies. These and other projects are all designed to drive growth and innovation which will fuel the continued recovery of the UK economy.”

The afternoon session started with an AIM case study from Matthew Walls CEO of Epistem. This was a success story of AIM from the outset, with significant interest post-float, well-subscribed primary and secondary fund-raisings, and strong growth in share price despite the recent economic turmoil. Next to the stage was Madeleine Cordes of Capita Registrars discussing Corporate Governance for AIM Companies.

The day’s events were wrapped up with the final presentation provided by Ralph Cox, MD of the fund-manager BlackRock, where he went through the dos and don’ts when approaching fund managers; what he likes to see, and what will make him say “no thanks”.

These LSE events are always very educational and insightful for the audiences and it was brilliant to see a great turnout from AIM companies……we look forward to the next one!

Adam

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2010: A return to optimism on AIM

After a year in the doldrums, confidence is set to return to AIM in 2010, so says “AIM in Review 2010”, an annual survey put together by Growth Company Investor magazine. Several Abchaps attended the survey’s launch event, and came back feeling even more confident about this year.

The report interviewed CEOs, private investors, fund managers, and brokers and nomads. It has uncovered a tremendous amount of optimism, and notes that AIM is attractive for its ability to raise funds for SMEs and entrepreneurs.

Amongst the CEOs surveyed, 85% believe AIM will make gains during 2010, and 82% trust that they will be able to raise funds if they need to. Amongst retail investors survey, 67% expect further gains for AIM this year, and 76% believe AIM companies offer good value.

At Abchurch we have strong faith in AIM and London’s quoted market. Since our inception in 2004, we have advised on 67 successful IPOs. Indeed, in recent months we have started to see an increase in activity and potential deal flow – which is all around good news for the City.


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All I want for 2010: A view from an expert

Re-published with kind permission from AimZine

AIM is ending a tough year on a higher note, but it remains a challenging environment for investors and advisers. 2009 has been an evolutionary year. The ‘fittest’ AIM companies have survived in a year that saw over 250 companies leave the market. As 2009 draws to a close, it is heartening to see that the rate of those leaving the market appears to be slowing.

For advisers, the most coveted present under the financial Christmas tree remains the IPO. They were frustratingly elusive in 2009, which from a capital raising perspective, was dominated by secondary placings and rights issues. But the broader investment and advisory markets must be buoyed by the recent Gartmore and Better Capital IPOs. The simple concept that investors are now ready to invest in fund management and turnaround businesses is itself a meaningful statement and we hope a signs of things to come. All we want for 2010 is for this sentiment to continue permeating throughout the markets.

Toppers

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Taking AIM

The AIM Awards was held at Billingsgate market – undoubtedly an evening not to be missed with the main movers and shakers from an exchange that has kept us all well dressed and well fed for many years.

Jo and I put together a table that kept clients, Brulines, zamano and RCG very happy while speaking with experts from analyst and corporate finance communities. Jo went over and above the call of duty by donning black tie and greeting the guests as they arrived.

Abchurch had three short listed potential winners and, although none made the final cut, they were among strong company:

Best Performing Share
Futuragene – up 691%!

Best Communication Award
May Gurney Integrated Services plc

Best Use of AIM
Vertu Motors plc

Best Technology
Immupharma plc

AIM Transaction of the Year
ToLuna plc

Achievement in Sustainability
Modern Water plc

Best Research Award
Edison Investment Research

International Company of the Year
Asian Citrus Holdings Ltd

Best Newcomer Awards
Max Property Group

Entrepreneur of the Year
Chris Havemann, ResearchNow

Company of the Year
Abcam

The Winner of a Lifetime Achievement Award went to Peter Ashworth, head of Research at Charles Stanley.

Very thoughtful thank you’s flooded the Abchurch inboxes the next day. All in all, the AIM Awards in their Old Billingsgate venue reflects the market of the past – the difference is we now trade equity not fish.

Heather


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Baker Tilly is Taking AIM

Baker Tilly's recent Taking AIM survey gave some encouraging statistics on the AIM market.

Although much reduced, AIM’s IPO and transaction total in 2008 outpaced almost all other growth markets as well as the main London market, and is only two IPOs behind the much larger NASDAQ.

AIM’s global reach was undiminished with three quarters of IPOs coming from overseas.

Secondary issues remain a key strength for the market with £3.2bn of further equity funding completed in 2008.

A minimum fund raising for IPOs is felt to be a better regulatory change than a minimum market cap specification due to fluctuations.

Recovery will be preceded by that of the larger caps. But stock picking those that will survive and benefit from disappearing competition on AIM will be the major incentive for investors.

The most popular benefits for an AIM listing were:
1. access to capital, profile, credibility
2. liquidity
3. facilitation of acquisitions
4. facilitation of exit for investors
5. tax breaks and incentives

• 72% of AIM companies have implemented cost cutting measures.


• More than half of investors reduced the proportion of funds invested in AIM stocks.


• 40% of investors believe the reduction in IPOs has increased the quality of the market.


• 65% of investors put a higher proportion of funds into secondary issues in ‘08 than ‘07 reflecting the continuing support for good AIM companies.


• 69% of companies and 67% of investors expect AIM to recover from the downturn in 2010.


• 82% of investors consider UK companies to be a more secure investment than their overseas counterparts.


• 51% of investors expect the IPO rate to level off at 100-150/ year.

The most important criteria for investment were:
1. good track record
2. good business plan
3. good management
4. strong balance sheet
5. realistic valuation

Looking at liquidity on AIM

This week I attended an event organised by Vitesse Media's Growth Company Investor and BDO Stoy Hayward about “Liquidity on AIM”. The task was to find AIM’s most robust stocks with a market cap over £10 million. Vitesse Media and BDO assessed the trading statistics of every single AIM company, a total of 1550, over a six month period. They whittled down the list to just 106 companies with a market cap of over £10 million, and that had at least 50% of its shares traded in the six months. For these select companies, sales levels, profit levels, growth rates, and levels of corporate governance were all scrutinised, as well as brokers, advisors and market makers.

The findings note that there is a strong correlation with trading volume and the number of market makers supporting a company. A greater commitment by directors to engage with analysts and brokers can be well worth the time involved. There was a lot of emphasis put on corporate governance, since on average there ware more non-executive directors and separate Chairman and CEO roles in the most liquid companies. Happily, the most significant factor in liquid stock is NEWSFLOW. I quote: “Companies, especially smaller companies with little following, will see their shares trade and re-price only when something happens. By contrast, those that actively disseminate news and results should see trading volumes improve.” BDO continues to say although this takes quite a bit of management time, persistence does pay off.

Heather

GCI’s Spotlight on AIM

Heather and Bozzy attended the Growth Company Investor Spotlight on AIM breakfast last week. The annual survey of London’s junior market produced some characteristically enlightening statistics:

Companies valued below £20m: 71% (2007: 53%)
New Aim issues: 70 (2007: 222, 2005: 438)
Fund raising for admissions: £903m (2007: £6.25bn)
Delistings: 228 (2007: 224)
Total number of AIM companies: 1,550 (at year end 08)
Total market cap of AIM companies fell by 61% to £37.7bn (2007: £98bn)

Best share price performers

1. Avisen (formerly Z Group)
2. Tepnel Life Sciences
3. Ramco Energy
4. Futuragene

Sector wise there has been great change. The oil and gas, mining and real estate sectors have fallen in value particularly whilst general financial pips all three to be the most populous and high value sector on AIM.