Strategy for growth: During 2011 the Group celebrated the 20th anniversary of The Share Centre’s existence. On that first day of trading in April 1991 a trade in Cable & Wireless shares represented the first transaction undertaken. Much has changed since then, not least the role the internet now plays in the delivery of our services and interaction with our customers, along with the breadth of shares and funds which we now enable customers to trade. There are also many things which have not changed, in particular the emphasis we place on customer service and the importance we place on the relationship with our customer rather than just the transaction the customer undertakes.
The principles on which the Group was founded, namely a belief that individuals strive to build a store of wealth for their own and future generations and that society is better served by a close interaction between consumer, employee and shareholder, continue to hold today. They underpin the Group’s purpose of enabling more people to enjoy straightforward investing, a purpose which has driven the Group to date and seen it already grow into one of the largest independent retail stockbroking companies in the UK. That purpose continues to drive the Group today with the personal investor at the heart of all that we do.
The Group’s strategy for growth is focused on the core retail stockbroking aspects of the Group’s activities. These comprised 93% of revenues in 2011. Driving revenue growth is the principal stated objective of the Group and this will be achieved through the emphasis placed on delivering award-winning customer service and continually developing our propositions so that they remain attractive and relevant to the increasing number of personal investors looking to take control of their own investments and savings. Doing these things will enable us to attract and retain new customers whether organically, through white-label relationships, or through acquisition.
The delivery of revenue growth in a model which is characterised by scalable and efficient operations should lead to margin expansion and increased profits. The infrastructure for the Group’s operations is already in place in terms of systems and processes. The incremental cost of an additional transaction or additional customer is therefore small, although there is always an ongoing cost of maintaining, refreshing and updating the infrastructure particularly in terms of technology.
The Board believes that there are a number of drivers of future growth which should help the Group deliver against its stated vision of reaching a size which would merit inclusion in the FTSE 350. These include macroeconomic factors which are leading more personal investors to seek out self-select solutions and be more challenging of the charges and service levels, relative to performance, which exist in traditional advisory, discretionary and fund management services. Within our control, the development of new services and in particular delivery channels, such as mobile access, will help extend our appeal and support for customers. The process of continually improving our website, its content and navigation, will also add to this process.
Supporting all of the above is our commitment to continue to invest in marketing activity at current levels which enable us to achieve an online share of voice alongside the largest players in our market. This marketing spend works hand in hand with the public relations work we undertake, resulting in The Share Centre being regularly mentioned in a wide range of relevant media.
In short, the attraction of new customers, the delivery of award-winning customer service and the retention of existing customers, along with continually improving our offering and access to it, should result in a virtuous circle whereby those customers become our advocates and more new customers are attracted. Supported by the established and proven infrastructure to deliver first-class services for those customers, this should in turn result in increased returns for the Group’s shareholders.
Source: Annual Report 2011
