A listed company itself – capitalised at $9 million – Omni Market Tide Limited (OMT) has developed an app that can handle a company’s investor relations function.
Investor relations is a little-known part of the listed company world, but it actually takes a fair bit of work, to communicate with shareholders and run the company’s statutory shareholder meetings and voting obligations. As in many fields, paper abounds. App developer Omni Market Tide has a vision – to take this function into the digital century.
A listed company itself – capitalised at $9 million – Omni Market Tide Limited (OMT) has developed an app that can handle a company’s investor relations function. Through a tablet or a smartphone, the company can reach its shareholders – and other stakeholders – instantly, at a time and through a medium that suits them. The company calls it direct, real-time, two-way engagement technology, and it could potentially disrupt the way that listed companies conduct their house-keeping.
“We looked at how companies talk to their shareholders,” says Megan Boston, Managing Director of Omni Market Tide. “They’re required under continuous disclosure obligations to announce anything material, to the stock market. On top of that they put out releases, presentations, information, annual and half-year reports. Once a year they have an annual general meeting (AGM). Occasionally they may have an extraordinary general meeting (EGM). At these meetings they ask shareholders to vote. The whole process is very inefficient.”
Companies don’t know if investors read the information and are resigned to poor representation from investors in official voting: Boston says that commonly only about 5 per cent of retail shareholders vote on company matters. In short, the companies are resigned to poor engagement from retail investors.
“Technology can change this,” she says. “We can put in the hands of every investor an app that allows the company to talk to the shareholders, and allows the shareholder to vote. It’s a unique capability – there is no other voting app in the world that we know of. You can vote through websites, but this has the added advantage of giving the companies a chance to have their investors engaged with them, continuously, rather than just when the companies would like them to be engaged, say at periodic events such as AGMs or specific events such as EGMs.”
If you think about it, she says, the AGM is held physically in one place, and many shareholders can’t physically get there. “Why not take the AGM to them?” she says.
The logic behind the business proposition is that if mobile, always-on connectivity allows shareholders to be reached by, and interact with, the company, they will be more likely to vote – and that benefits the company and the shareholders. “For only 5 per cent of retail shareholders participating in AGMs, it is a very costly exercise to run it. But greater participation makes it more worthwhile.
Boston gives the example of the Westfield restructure in 2014, where the vote of Westfield Retail Trust unitholders had to be held twice before they approved the proposal. “Westfield ended up spending thousands of dollars to try to swing a vote in a certain way, but if they had engaged at least 5 per cent of retail shareholders, previously, they could have got that over the line. If they had influenced their shareholders a lot earlier on their story and the resolution, they would not have been forced into that big effort at the end. We’ve seen a couple of those cases,” she says.
Company communication with shareholders has become “more about compliance than information,” says Boston. “They put out announcements that tick the box for compliance, but don’t really tell the investors much. We’re saying, ‘why don’t you use the app to complement that?’ For every compliance-related announcement, why not follow up with a plain English explanation of what you’re doing, so shareholders do understand. That doesn’t have to be on the ASX platform: at the moment the only source is the ASX, and often that doesn’t do anything for shareholders and their understanding of what the company is doing,” she says.
The app is also highly relevant for institutional shareholders, says Boston, and Omni Market Tide is working on specific versions for that purpose.
OmniLOOP allows investors to genuinely engage with the companies they own.
Since listing in July 2015, Omni Market Tide has signed five listed Australian companies as clients, with a pipeline of more than 45 others who have shown “positive interest” in the app, says Boston. Omni Market Tide also has an agreement with share registry company Boardroom Limited’s Australian subsidiary to integrate the app into its digital solutions business, enabling its clients to use the app.
Discussions are also under way with Boardroom’s Singaporean parent company, which opens up the possibility of presence in Asia. The company also has a presence in Europe, the Middle East and North America, through a global sales referral agreement with Euroinvestor.com.
“The interesting thing about our market opportunity is that there are 2,200 listings in Australia, and we’re seeing interest from both ends,” says Boston. “The bigger companies – the ASX 50 – spend a lot of money on investor relations, and they’re looking for ways to spend their money more efficiently.
“But at the smaller end, they don’t have an investor relations team, it’s usually the company secretary or the chief financial officer that is handling the investor relations. They need a solution that is efficient in time and money. They’re the kind of companies that are looking to get the benefit from continually engaging their shareholders – not so much to improve participation in voting, but more because they do capital raisings more often, and they know that engaged shareholders, who feel connected to the company, are more likely to support capital raisings. They are the ones most often looking for the money, but they don’t have much money to spend on capital raisings. This is an efficient way for them to do it.”
The app allows companies to segment the shareholder base and give out targeted content – even down to on what device people use the app, and when. “It’s all about content coming to you at a time when you’re ready to read and engage with it. You don’t have to go searching for it,” says Boston.
A customer-branded app was released in February, while the OmniLOOP app is being launched later this month. Earlier in March, the app that Omni Market Tide built for Telstra went live, and three more investor relations platforms scheduled for release during March.
“It’s an exciting time at the moment. We have about 50 companies in the sales pipeline at the moment, and we think that once they see OmniLOOP, that will be the decision-making time. The other big event for us is the launch of the Boardroom app, mid-month.”
But the “key milestone,” she says, is Omni Market Tide’s own AGM, on May 30. “We’ll be streaming our AGM, making it more succinct and more user-friendly from the perspective of someone watching through an app. Shareholders can still attend it if they want to, but we’ll be streaming it and conducting the voting through the app. We will be using our own AGM as a full case study. We know that a lot of ASX 20 companies will be watching to see how it works: it’s going to be really ground-breaking,” says Boston.
