I’ve reported on a clutch of different financial and business markets in my 11 years as a journalist but there are few stories that follow me through them all, and fewer companies that I can say I’m genuinely fond of. Plus is one of those: the “junior stock market” for fledgling companies and overseas businesses in less-well known regions such as Kazakhstan or Vietnam. Something of a fledgling itself, Plus isn’t breaking even – it hasn’t for ages – and carries a ballast of individual retail shareholders who are happy to slam it in online investor forums. It is obsessed with giving the London Stock Exchange a real run for its money even though the two don’t compare in scale or reputation.
This week I had tea with some representatives of Plus – whose CFO, Nemone Wynn-Evans, writes a blog for us every other month – and enjoyed delving back into my favourite corporate underdog’s current activities. Curiously, while the business has undergone a wholesale change since I first wrote about it in 2004, from its management to its ownership, and is steaming ahead in terms of business development and ideas, its fundamentals remain precisely the same. It has a credibility gap that has long held it back from delivering on financial and shareholder expectations, and its management don’t have enough press visibility to explain why this isn’t a reason to doubt Plus’s future success. It’s amazing to think that you can oust family managers, float, remodel, poach top-class whizz kids from arch-rival LSE and do countless roadshows in emerging markets where companies are desperate to list in London but avoid LSE prices – but be only one or two steps along in your grand plan.
Now it is working on a strategic review from which emanates its key pledge, to break even in 2012. I admire the extremely creative, energetic management there, including Wynn-Evans, setting that target, but I still don’t feel convinced that they can do it and worse, if they don’t, I wonder if Plus’s existence will be under threat. As I reckon it is a real champ of a company I really want it to work, but I’m worried that it has not yet shaken off the principal problems that marred it at the turn of the millennium – and I worry why it has not done so.
I first wrote about Plus in 2004 when I worked on a magazine about family-owned companies, when it was still called Ofex and was still headed up by its family founders, the children of well-regarded City stockbroker John Jenkins. Six years ago Ofex’s problem was the credibility gap; few thought the prospect of a mini stock market for minnows was much of a goer financially, and being family controlled and managed wasn’t to the City’s taste. Then-chairman Jonathan Jenkins told me when I was writing about it for Families In Business magazine (now Campden FB):
“The people we worked with to create the exchange – the brokers, the advisers – were always supportive. The difficulties were with the investors, who have their checks and balances. They voiced the opinion that for Ofex to go forward it needed ‘less of a family feel’, and as the ones with the money they have the power to change the structure of the firm… I think there is a degree of mistrust of family companies in general. When the investors came in, they wanted a change of management and it was me who had the highest profile. I was always going to be the one to go.
“One of the main reasons we floated was for that transparency and to inspire confidence in what we were doing – people thought we were some bizarre cottage industry family business, but we have always been properly run and regulated. Yes, there were the Jenkins family members, but there were also 21 other employees and everybody played a role.”
And today many people still don’t know that Plus has the same regulatory status as LSE. The guys I met this week representing Plus are still wrestling with that image problem and it having a glut of individual shareholders, rather than the stable of big-time institutional investors it wants (it has some, but it wants more) seems to be giving the City a reason to take it less seriously, as the family ownership issue did. I’ve also heard that Plus’s chief executive Cyril Theret – who I had lunch with way back in 2004 when he was a business development man for Ofex, having defected from the LSE alongside Simon Brickles (who founded the Alternative Investment Market) and Wynn-Evans – had until recently been rather press shy. This is just weird for a CEO. That can’t go on: Plus must take its story to the world. And the service it provides growing businesses is an important one, I think.
I met CFO Wynn-Evans when I interviewed her for Financial Director on her appointment to that role in 2009, and I was highly impressed to meet someone striding into their first finance role at that level, with no accounting qualifications or background and a baby on the way. But I gave the article the title ‘Round peg, square mile’, summing up my takeaway feeling that revolution had brought scant returns for Plus or for its profile in the City. It was the same old story. “Plus is working to change City perception, but many still see AIM as the logical home of the mid-cap IPO,” I wrote. “It might be true to say that it takes time for perceptions to shift,” she conceded to me.
Some also see Plus as a bit of the boy who cried wolf, inasmuch as it has made key declarations of intent that it has not backed up. It said it was going to launch a dark pool trading facility, helping institutional investors match bids and orders behind the gaze of the open market, but didn’t; it recently said it aims to launch a market in medium-term interest rate swaps (“its latest grand scheme”, says the Financial Times – with a tone that says much), so it must ensure it does. To not would reflect poorly on the management who, as I say, are genuinely exciting and talented people who are up to the job.
But that credibility gap is the hump. They’d be wise to take a leaf out of Peter Pan’s book: if they believe in fairies, they need to clap their hands. Loud and proud. I for one want to see their plans realised – and monetised.
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