The USM so far: come on in, the water's fine

Article Abstract:

Trading commenced on the Unlisted Securities Market (USM) of the London Stock Exchange in November 1980, and despite skepticism related to the higher risk of investing in these market participants (most of which are new business enterprises), the USM has been increasingly successful with each passing year. A survey of 151 companies trading securities on the USM indicates that 87 percent of respondents felt the benefits of USM trading more than offset the cost of listing on the USM. Among the benefits most often cited by USM participants are: the funds raised for the enterprise, the establishment of a market for the company's stock, the return on investment provided to current shareholders, the improved status of the enterprise, and the greater likelihood of growth through acquisition following the listing. Disadvantages to listing on the USM are also discussed, as are costs of obtaining a listing and a comparison of the USM to over-the-counter markets.

Security and commodity exchanges, Analysis, Services, Marketing, Stock-exchange, Stock exchanges, Securities, London Stock Exchange PLC, Over-the-counter markets, Over the counter markets, London

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Improving summary financial statements

Article Abstract:

Listed companies in the UK are allowed to issue summary financial statements (SFS) to shareholders under s 251 of the new Companies Act. A study was conducted by the Financial Reporting Committee to determine ifcompany shareholders preferred to receive SFS rather than the full report and accounts, and to verify if the use of SFS enhanced communication with shareholders and reduced the costs of producing annual reports. Results show nine out of the ten companies surveyed had 20% to 33% savings on paper, printing and postage as a result of issuing the SFS. Experiences of companies also show that most shareholders prefer receiving SFS, although the ability SFSto improve communication remains undetermined. In addition, shareholders' preferrence for the SFS was attributed to the narrative materials and photographs included in the documents containing the SFS, rather than the actual financial data.

United Kingdom, Research, Laws, regulations and rules, Reports, Financial statements, Corporation reports, Company reports, United Kingdom. Financial Reporting Committee, Corporations, British

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Earn-outs: motivation and conflict

Article Abstract:

The assets of a marketing services firm are the skills, knowledge, and client contacts of its people. Acquisitions of people businesses, such as marketing services firms, often use earn-outs, in which an initial payment is followed by a series of profit-related payments, typically over a three to five year period, based on a multiple of a business' earnings. This ensures that vendors are motivated to maintain the performance of a company. An analysis of 27 acquisitions in the marketing services industry indicates that management problems frequently arise from vendors' natural emphasis on increasing short-term profits to the detriment of long-term strategy favored by acquirers. The best relationships between vendors and acquirers were based on a carefully worded agreement understood by both parties that was monitored and adhered to within the framework of a formalized policy.

Acquisitions and mergers

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