Being quoted ñ help or hindrance? - 06/2001

As one of the only 3 publicity quoted online Recruitment companies (RXN on AIM), I often ask myself if being quoted is help or a hindrance when growing the company and wanting to take advantage of the opportunities that suddenly arise within our marketplace.

The advantages of being quoted are supposed to ensure that it is easier to both raise money and buy other companies. However I have to observe that in the current financial climate the ability to do both these things is somewhat diminished. At the same time I also have to observe that in times like these you are tied to results that the market expects ñespecially during a bear market and I have no problems with this from Rexís perspective.

HOWEVER I feel that working to such a tight plan means that you are building the business with constraints ñ ideas should be tried out in the context of ìGive it a goÖ..If it works, great, if not, never mind.î

Unfortunately I can afford no such luxury ñ everything we do must be justified by as short a pay back period as possible. Again, I generally have no problems with this: Unlike many online businesses Rex has always been run tightly and sensibly with an eye to getting to profitability as soon as possible but thenÖ..

I sometimes yearn for the luxury of experimentation ñ the ability to go off piste so to speak!

One such example of this concerns Jobmagic.net our highly successful corporate Jobs-board. A very large client in the US was so impressed with the product that they wanted to buy it off Rex, create a separate company based round it whilst at the same time maintaining the present team to run it.

As a private company I would merely have had to assess the commercial implications, made a decision one way or the other and acted upon it. As a quoted company, such a major decision would have to be run through my board, brokers, Nomads and PR people. Then if agreed maybe even an EGM called. This process is both time consuming and expensive, so in the end I turned it down. I felt that Jobmagic.net was a very important part of the Rexonline programme and that the interests of Rex were best served by retaining Jobmagic.net as a very important part of our network.

There are a number of other projects that I would like to start but will not do until the end of our financial year Ö due again to stock market conditions. While I do not regard this as in anyway critical to the success of the business, I nevertheless find such a situation constraining especially as we work in an ever changing environment where experimentation is vital.

ON THE OTHER HAND running any sort of business is about financial discipline and being in the public arena merely intensifies this, which has to be a good thing. Furthermore even with the financial markets as they are you can still raise money for acquisitions if they are seen to be commercially viable. I also believe that being public helps with credibility even in the eyes of our clients and potential clients. (Again using Jobmagic as an example) we have picked up some major clients due to this factor.
I would also argue that acquisitions can be made with quoted shares which in itself makes growing through non-organic means easier ñ quoted paper is more highly rated than private paper because quoted paper is more easily tradable.

My conclusion:
Although the twin macro factors of an ever changing marketplace and (at the moment at least) a volatile stock market make running a quoted company difficult to say the least. I think on balance that we can achieve more by being quoted than by not, despite the constraints that I have alluded to. Furthermore our present status affords me the belief that I can grow Rexonline faster and more aggressively. We have always run the business in a commercial and profit orientated way, which I believe helps us to take the most advantage of being publicly quoted.

Infact I think our shares are cheap right now so buy some while you still can at present prices!

To find out more about the company visit our company website on:

www.rexonline.co.uk