Top 100 CEO Interviews
Issue No. 49 - October/November 2009
Cautious optimism: be prepared
by Pamela Brombal
There is cautious optimism for FY2010 in the business community. Most businesses have done the hard yards to reduce costs and manage cash and working capital more effectively.
While the economic recovery is still fragile, you now need to begin thinking about how well your business is positioned for growth.
Do you plan to grow organically or by strategic acquisition?
More importantly, how are you going to fund that growth?
At the smaller end of the market, securing an injection of capital from a private ‘angel’ investor may be an option. Private equity investment may be an option for larger enterprises. For mid-size to larger businesses, the Initial Public Offering market may hold the key to capital raising.
The IPO market all but shut down following the global financial crisis, with only a handful of listings on the Australian Securities Exchange this year.
Market sentiment suggests the IPO market will re-open in the first half of 2010 and the most optimistic think even late 2009. Investors want stability, so until there is a period of stability in the market, investors will be nervous about risk, which is why 2010 is more likely.
As confidence returns, we expect to see more private companies seeking to list.
Planning is crucial
You cannot do an IPO overnight. If you are thinking about an IPO you must plan now for listings in 2010.
A survey by Ernst & Young, The Measures That Matter, shows companies which perform better post-IPO begin the transition to public company up to 12-24 months prior to listing.
Critical issues such as alignment of your business strategy, financial forecasts and reporting systems, group structure, employee share schemes, getting the right directors on board and investor relations, take time to get right.
We are now operating in a very different environment to the bull market peaks of 2007. It is vital you package your business story and ensure your financials ...
