Life as a plc

Keith Neilson, CEO of AIM-listed software company Craneware, tells GB about the joys and challenges of being a quoted company.


Keith Neilson, CEO of AIM-listed software company Craneware, tells GB about the joys and challenges of being a quoted company.

Keith Neilson, CEO of AIM-listed software company Craneware, tells GB about the joys and challenges of being a quoted company.

Our time on the stock market has been very positive, and I’ve been quite vocal in recommending a listing to other entrepreneurs, especially those who are venture capital-backed as we were before we floated on AIM.

I’ve found being listed a very efficient process. We take a week out every quarter or six months just to speak to shareholders and institutions, but when I weigh that against all the time we used to spend keeping our VCs up to speed, with some of the micromanagement that sometimes came from there, maintaining a listing has been a far more productive use of our time and allowed us to concentrate better on the business.

As a quoted company, you do get asked some challenging questions. Journalists, analysts and fund managers all seem to be able to go from a very broad picture to a much more detailed level than we were used to before we became a plc. I actually find that quite enjoyable – it means no two meetings are the same. Before we floated Craneware, people warned us meetings with investors would be a chore, but we’ve just not found that.

You have to make sure that expectations are set correctly in your initial public offering (IPO) and you have to know your business inside-out before you float. If you don’t, you’ll be exposed. We’ve delivered and even outdelivered on what we promised.

There have been a few surprises. One thing I still find bizarre is that we spent the first eight years of our business trying to talk up the value of the company. Now all of a sudden, with fund managers, you’re not allowed to do that at all. I find it hard not discussing share price in investment meetings. As an entrepreneur, my natural inclination is to say “of course we’re undervalued and these are the reasons”, but that’s not the done thing if you’re a plc. You have to give people the facts and let them make up their own minds.

Another thing you have to watch as a listed company is the kind of information you disclose. It took us probably until the first full-year results after our IPO to realise that we had to be a little more careful with the key performance indicators (KPIs) we were including in our numbers. You have to be mindful of what information [competitors] could reverse-engineer from that sort of data. For example, we are very careful that there is nothing in our results that would allow anyone to figure out a price list.

On the whole, disclosure is a good thing. Customers can see the success you’re having and it’s a lot harder for competitors to spread a misleading impression of you in the marketplace. But there has to be a limit to what you would disclose. Analysts want to get the best possible picture of your business, but they also realise there are commercial sensitivities.

There is a lot of negativity at the moment around going to the stock market, but from our experience, I would recommend it to anyone who is confident about delivering on their numbers. It does come down to confidence in the end. If you’ve got that, there should be nothing to be afraid of in becoming a public company.

Nick Britton

Lexus Ernser

Nick was the Managing Editor for growthbusiness.co.uk when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...