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Best practice case study: ASOS and the five ‘C’s

In this Informed interview, Laura Hayter catches up with Greg Feehely, director of IR at the online retailer ASOS.

 

As has become customary at the start of the year, and very much in line with the Society’s own five ‘C’s of IR, we recently had the pleasure of catching up again over some coffee with Greg Feehely, director of IR at ASOS. We like to see this annual ritual as a great testing bed for what is good about IR, indeed what is essentially best practice. Picking up on the five ‘C’s, part of this is of course being consistent and maintaining the continuity of communication regardless of what is going on around you. Ultimately, we believe it is all about IR promoting a certain clarity around the investment story, building credibility and keeping that conduit between company and audience going at all times. That’s what we really like about ASOS. They’re always up for a good old-fashioned one to one and comparing of notes.

Here’s what we learnt on asking what’s going on in the world of IR, what’s keeping Greg and team awake at night and what will ASOS be doing differently for 2016? Touching on some of the external factors that are vexing the mind, we all agreed “it’s been the worst start to financial markets in 15 years”. You don’t have to think beyond the turbulence in financial markets, the turmoil in commodity prices and other upcoming questions, like Brexit, which has been rumbling along in the background. Throw in a referendum at home or a big election overseas and it’s easy to forget that these things are out of our hands. IR must go on and there’s always something to look forward to – European football championships, the Olympics, just in case you didn’t get enough rugby six nations!

Educating investors 
We revisited the discussion around Greg’s existing IR efforts and it was a healthy refrain of it remains “much of the same for 2016”. Clarity, consistency and continuity, that’s what we like to hear. As many of our readers know, ASOS has an award-winning IR team, and has successfully managed the various bumps in the road and share price volatility in the last few years.  The entrance of new competitors, including the recent IPOs of Zalando and Boohoo, has been taken in ASOS’ stride. Interestingly, according to Greg, they are a welcome addition. These entrants to the market have helped investors move up the education curve. Now ASOS enjoys the attention of global e-commerce growth investors as well as the traditional bricks and mortar retail investors.

Despite a very active IR calendar, IR resources at ASOS are still fairly lean. The day-to-day running of IR is manned by Greg and his able assistant, along with a 12-month rotation from the finance team. With 27 analysts covering ASOS, and a plethora of conferences to attend, there’s no let-up in activity – Greg will be going to the US three times before June!

When asked what markets he will be focusing his IR efforts on in 2016, Greg noted as well as a concerted US West Coast push, he will “finally be getting to Asia”, a region IR has never actively marketed before. In Europe, while Milan is not a must do, he agreed that ASOS “shouldn’t have left it this long”. There are also deep pools of money in Sweden and Denmark and he noted that engagement has stepped up in Frankfurt and Paris too.

Team size and resource constraints mean Greg and his team do need to be discerning when it comes to meeting requests. Greg explains they do a lot of cross-shareholder targeting given more peers in their sector. Management expects to see an in-depth knowledge of the fund, portfolio manager, unit size, and the decision-making process when considering meetings. Clearly this is a great IR discipline.

Virtual IR
As a Society, we are of course closely following the development of MiFID II. Naturally, we were keen to get Greg’s insight into the possible impact on IR of any regulatory changes, including what happens to corporate access and research.

Greg opined that corporate access is a resource that they would miss and he doesn’t deny that this is a potential area for concern. We discussed the increase in technology offerings that are being designed to offer IR programming, including roadshows and shareholder targeting. He agreed that this is an interesting development that will inevitably play out over time. The use of video conferencing as ‘virtual IR’ is also a handy prospect, although Greg quickly suggested that this would not replace face-to-face interaction but offer more of a wrap up post-roadshow.

Turning our attention to the sell-side, we discussed the shake-up in the market as a result of potential regulatory change across the UK and Europe. How does ASOS manage their consensus? Greg revealed that ASOS compiles its consensus numbers internally, and while he understands that analysts do want to stand out, he is firm that ASOS gives clear guidance and will challenge analysts if they are too far off. Transparency and full disclosure is a theme that runs consistently through our conversation and something Greg takes pride in.

Social media isn’t a top priority for ASOS. While ‘mobilisation’ is a key trend, Greg believes that the ASOS website is very content rich, and therefore currently there is no great need for additional IR efforts through Twitter and other social media channels. Furthermore, he believes the world is moving to push notification from email, so there will be a greater need for mobilisation of IR through use of apps.

So what are the ASOS priorities for 2016?
How long do we have, Greg retorts? And yet it is always a most relevant and defining topic for ASOS. As a retailer, when considering the big factors, such as suppliers, CSR comes to the fore as part and parcel of the IR story. You could argue that this should be increasingly the case for most IROs in 2016.

On the IR front more broadly, Greg concluded in a nutshell, he plans to attend one CSR conference this year, along with the full calendar he has shared with us. As we wrap up another highly engaging meeting with the man from ASOS, we can only agree that for a small team from a still AIM-listed company, Greg and the team are doing a great job.

The ASOS mantra for 2016 is – focus on a small number of things and do them really well. Now that’s championing excellence in IR!

Published: 1 April, 2016