- May 20, 2016
- Posted by: lutherpendragon
- Category: insight
When I started my career in Financial PR over a decade ago I used to bemoan the lack of coverage smaller companies were getting in the media. Little did we know how good we had it.
In recent years coverage of smaller companies, particularly in the national press, has dwindled away. Long gone are the halcyon days when the Financial Times dedicated a whole page to small caps. The recent demise of The Independent print edition and its Monday Small Talk column, marked the latest nail in the coffin. It is now increasingly rare to have journalists dedicated to covering the Alternative Investment Market (AIM) and small caps. Seeing a trusted contact leave the small cap arena can feel like a major blow, followed by a nervous wait to find out when, and indeed if, they will be replaced.
One reason coverage of smaller companies has been squeezed in the national press is declining newspaper circulation, which in turn has led to cost cutting and an inevitable decrease in the numbers of specialist reporters. There is also a sense that readers prefer to hear about the roaring (or weeping as the case may be) Goliaths that dwell in the confines of the FTSE 100.
That’s all very well and good – but who is shouting for David?
Well thankfully a plethora of new investment websites, broadcasting outfits, online blogs, and podcasts have sprung up to fill the vacuum. A beaming light of hope for anyone interested in learning about smaller companies, these outlets are gaining traction and are increasingly sophisticated in their approach. While national media coverage is still desirable for many companies, there is great success to be had from engaging with these specialist platforms. It also means that Financial PRs are being more creative in the way that they ensure their clients’ voices are being heard by the audiences that matter to them.
There remains an appetite for investing in smaller companies. A recent report from the London Business School found that when it came to investing, shares in smaller companies came out on top. Since 1955, the Numis Smaller Companies Index (NSCI) ex-investment companies (XIC), has achieved a 15.4% compound return, 3.6% p.a. above the FTSE All-Share. Launched at 1000 in 1987, the returns index reached an all-time high on 3 June 2015 of 17857. During 2000–15, smaller companies outperformed larger ones in 90% of worldwide markets.
In addition, AIM, which celebrated its 20th birthday in 2015, provides an excellent conduit for young, dynamic growth companies. Over a 1000 businesses are listed on the London Stock Exchange’s junior market. AIM not only gives investors access to exciting growth companies at an early stage, but also helps finance the development of businesses that are helping to drive the UK economy forward now and into the future.
Despite their success, many small caps have faced a challenge in recent years in reaching a wider audience and gaining the recognition they deserve. However, whether it be in the national press or the new specialist media platforms, through persistence, creativity and a little out the box thinking it is still achievable for smaller companies to gain the coverage they deserve.