Generating small cap buzz


Blurb: Henri Perron's investor relations firm helps small cap companies that have limited analyst coverage get their story out by organizing presentations to retail brokers

One of the ironies for CEOs today, is that much of how the public judges their performance is based not on how good their company's products are, nor how many jobs it created or even its profits. The main criteria used to judge corporate performance these days often seems to be stock price. That's what makes Henri Perron's job so important.

Perron is president of Renmark Financial Communications, which helps public companies get their message out to the investment community. Last year, Renmark organized about 300 road shows, in which key managers from its 50 clients told their stories to stockbrokers across the country.

Unlike traditional road shows put on by investment banks, --often just before their clients are about to issue stock, and which primarily target institutional clients,-- Renmark's road shows are designed to reach the retail community.

"Big financial institutions operate mostly through block trades," said Perron. "If you want to move markets these days, retail is where the action is. "

Stock promotion is a heavily regulated industry in Canada. Only brokers that are licensed by the provincial securities commissions are allowed to recommend equities investments directly to the public. If companies want generate public interest in their stock, they've got to get those brokers interested. That's a big challenge because analysts at most of the securities dealers only cover big companies, or those whom they think are likely to issue stock soon.

That's where Renmark comes in. Over the years Perron has built up a database of close to 20,000 North American retail stockbrokers, including 7,000 who have attended one of his road shows in the past. The database includes detailed information including which firm the broker works for, what companies he's interested in and approximately how much money he manages on behalf of his clients. The list enables Perron to target his road show invitations only to brokers who are likely to be interested.

"These guys are very busy," Perron said. "If you waste their time you blow your whole credibility."

After the presentations, Renmark's staff of 24 professionals makes follow up calls to the participants, to make sure that they have all of the information that they need. And Perron isn't shy about getting his hands dirty himself. His workday, --which typically begins at 7:00 a.m.-- includes about 130 phone calls to brokers, of which he estimates about 30 to 40 get past the voice-mail. Surprisingly the phone calls to brokers are the one of the aspects of the job he likes the most.

"If they don't want to talk to me, they just tell me to f---- off, and I take their name off the list," Perron said. "I don't promote anything. I just tell them I have this company that might interest them and I ask them if they want to know more."

The service is highly useful said one broker, who has attended close to 20 presentations made by Renmark clients during the past two years, including one by ART Advanced Research Technologies and Noranda Inc.

"It gives us a chance to meet and judge company executives," said Jacques Filion, an investment advisor with National Bank Financial's Ottawa office. "You can tell a lot from meeting a person that you cannot see by looking at a piece of paper."

Although National Bank Financial covers several Renmark clients, Filion has gotten good investing ideas from attending the presentations, which he often invites his own clients to attend.

According to Kerry Knoll, president of Glencairn Gold Corporation, who gave a presentation to stock brokers at Renmark's plush Rene Levesque St. offices last week, Renmark is one of Canada's most tenacious IR firms. Knoll met Perron when he was president of another resource company, Wheaton River Minerals, and hired him again shortly after he founded Glencairn two and a half years ago.

"I've dealt with several firms over the years including many in Toronto," Knoll said. "But the service they offer is really unique."

Lise Hébert, vice-president (corporate communications) at Neurochem, --which develops treatments for neurological disorders,-- agreed.

"We have seven securities dealers that cover our stock, but some like BMO Nesbitt Burns don't," Hébert said. "Renmark gives us a chance to tell our story directly to brokers."

Despite Perron's success, --which has seen him parlay a $2,000 startup investment, into a business with annual billings of more than $2 million in five just years, --he isn't planning on slowing down any time soon. His goals include diversifying by signing up more large cap clients and decreasing his reliance on the mining sector, which currently accounts for about 40 per cent of Renmark's revenues.

"I want to become the biggest IR firm in North America," Perron said with a smile. "Then, maybe I'll take a break."

 

 

 

Sidebar: Renmark's management strategy

o Target small and mid-cap companies that want to tell their story directly to stock brokers
o Build and maintain a comprehensive database of Canadian stock brokers
o Organize highly targeted road-shows by identifying which companies specific brokers are interested in
o Follow up each presentation with a phone call to all participants to make sure that they have all the information they need

 

 

 

 

Fact Box:
Company Name: Renmark Financial Communications
Web-site: www.renmarkfinancial.com
Owner: Henri Perron
Founded: 1999
Products: Investor relations services
Employees: 24
Sales: $2 million
Phone #: 514-939-3989

 

peter@peterdiekmeyer.com

 

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