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Feb 08, 2023

Micro-caps: How an IR team of two can achieve top scores

IR Magazine talks to Eugeniu Baltag, IR manager at Purcari Wineries, about best practices

Moldova-based company Purcari Wineries was awarded top scores for its IR practices by the 2022 VEKTOR methodology, an investor communication indicator for listed companies introduced by the Romanian Investor Relations Association (ARIR) in 2019.

Published annually by ARIR, the performance indicator includes 12 criteria that meet the expectations of a more sophisticated, digitized and engaged investor. These include investor presentation accuracy and accessibility, corporate access opportunities and corporate governance disclosures, among others.

The Bucharest Stock Exchange-listed wine producer achieved full marks in each of those criteria. In an interview with IR Magazine, the firm’s IR manager, Eugeniu Baltag, shares peer-to-peer advice on how IR teams can succeed at smaller companies where resources are tighter, analyst coverage is less, the trading liquidity is limited and the impact of global challenges can be more pronounced.

Micro-caps: How an IR team of two can achieve top scores
Eugeniu Baltag, Purcari Wineries

What makes the Purcari Wineries IR team so successful? 

First and foremost, we are very agile and that’s paramount for a company like ours, as we are a small team. Agility is equally important both at an internal level and when engaging with investors. We don’t benefit from huge budgets so we cannot always participate in all the corporate access events all the time. We need to prioritize, be selective and act in line with what is available to us.

Being agile also allows us to optimize internal communications, which in turn will have a positive impact on the response time to our shareholders and the reaction time to challenges we face. When a challenge arises, it’s important for IR teams to quickly react, adapt and communicate their way forward to investors. Lastly, we value consistency. Investors are looking for consistency in your brand and in your story. When you craft and deliver your company’s narrative, you need to under-promise and over-deliver, not the other way around.

What is your biggest IR success to date? 

The war in Ukraine created a difficult market environment. As a company with a shareholder base of institutional and retail investors in the region and operating in a neighboring country, this posed a few challenges for us. The way we managed communications with our shareholder bases both in Ukraine and in other jurisdictions in the first months following the Russian invasion allowed us to keep our losses to a minimum. Quick and effective communication backed up by data that demonstrated our continued profitability went a long way. This was our biggest success in that extraordinarily difficult situation.

What are your current IR challenges?

Geopolitical tensions in Ukraine continue to put businesses with interests in that territory under pressure. The ESG trend and related regulations and frameworks are also something we are very mindful of; we are working on a few sustainable initiatives now. But that’s not easy for a small company with a small budget in a country like Moldova, which does not receive many subsidies at a government level on that front.

How are you planning to overcome those? 

When it comes to the situation in Ukraine, we will continue to prioritize keeping our shareholders up to date with our overall performance. My advice for companies that are impacted by situations like these is to keep your communications channels open even if things aren’t great. If that’s the case, investors need to know you have some contingency plans in place or they will pull the plug.

In terms of ESG, as a listed company we are implementing the first steps toward ESG compliance, and we think it’s extremely important for us to be proactive on that front and in line with European ESG-related frameworks, even though there is far less restrictive legislation in Moldova, where we have our main production assets.

If you could pass on one IR lesson, what would it be? 

Be proactive, be curious and don’t be afraid. You need to know your stakeholders well to craft and adopt strategies that work for you as a company and for them. It’s important to differentiate messaging between institutional and retail investors as well. Lastly, I would urge IR professionals not to be afraid to try something new. Whether that’s a new IR tool, getting a new certification or attending a new event, IROs need to be active and get out of that ivory tower.