Strike me pink but we had a blast. Every Sheila and Shane this side of Broken Hill turned up, and all of them in their glad rags – not a cossie in sight. But we felt like the dog’s breakfast next mornin’.
As you may have gathered (or not, depending on the depth of your knowledge of Strine, the Australian native tongue) the IR magazine Australia Awards are over for another year. And what an evening it was. The night started with a bang as awards presenter and veteran Australian newsreader John Mangos rode a Harley-Davidson into the ballroom to signal that official proceedings had begun. Great food, good company and even a band ensured the rest of the night was a roaring success.
Mind you, perhaps the evening should have been renamed the ‘James Hardie’ investor relations awards, as the building materials giant picked up seven of a possible 20 awards, including the grand prix for best overall investor relations and best investor relations officer for the affable Greg Baxter.
This is the third year in a row Baxter has been named as the country’s top IRO and the second year running that James Hardie has won the grand prix. The survey of finance professionals conducted by The Financial Research Company, which determines the winners, shows James Hardie won the top honor by an extraordinary margin – as did Baxter for his individual award.
Baxter says he believes his team’s service approach contributed to the slew of awards. ‘Our basic philosophy is that IR is a service function,’ he says. ‘We treat analysts and portfolio managers like valued customers.’
IR’s position as a management function within James Hardie also contributed to the success of the company’s IR program. ‘When people talk to us they know they’re getting the right information,’ Baxter explains. ‘They don’t feel the need to get in front of the CEO or CFO.’
Continual feedback surveys, both qualitative and quantitative, and annual strategic reviews also allow James Hardie to be flexible about adjusting its IR program to market needs. ‘At the start of the year we sit down and do a critical assessment of everything we do and put in place a program to close any gaps,’ says Baxter, citing the annual report as an area that came up for special review this year.
‘We knew it was okay, but not as good as some,’ he adds. ‘So we reviewed a bunch of other reports, looked at what the audience said it wanted, and changed our report accordingly.’ And given that one of the awards James Hardie won was for best corporate literature, it looks as if the strategy worked.
Baby steps
Another company that won multiple awards was Promina, the biggest new listing in the Australian market for five years and one of the biggest capital raisings in the world this year. Promina won the award for best IR for a new issue, but is perhaps better recognized by the award for investor targeted advertising, which it won for its television campaign featuring a talking baby. Managing director and CEO Mike Wilkins says the public ‘either loved him or hated the baby. There weren’t too many people who were ambivalent.’
Promina was formed when its parent, the Royal Sun Alliance, needed to generate capital fast. To achieve this it amalgamated some of the then biggest names in the Australian insurance industry, including brands which had been around for 170 years, and hit the road to raise funds for a listing.
Wilkins says the concept for the talking baby came about through the company’s need to link the old brands with the new company. ‘Hence the [new] baby with the [older] adult voice that we used in the TV campaign,’ he says.
The campaign was linked to a global financial marketing blitz, including a roadshow with 169 presentations in 24 cities in seven countries in 35 days. ‘We presented to 242 institutions – and 238 bid into the book,’ says Wilkins.
Since the float, Promina has kept up the flow of communication. ‘As a top 50 company we believe we have a responsibility to take continuous disclosure seriously,’ Wilkins says. ‘After the half-year we undertook further investor visits to most major institutions in Australia and New Zealand, and also in the UK, the US and Asia. We have continually enhanced our levels of disclosure. By being very transparent we can really broaden our appeal.’
A surprise winner was Brambles Industries. Despite being in the news recently for its sharp dip in profits and the departure of its CEO, Brambles won the award for most progress in investor relations.
Jeannette McLoughlin, group general manager for corporate communication, says the company has taken some trouble to increase levels of disclosure since the company became dually listed in 2001. ‘We’ve really focused our efforts on IR,’ she says.
Some of the improvements Brambles has made since it launched its secondary listing on the London Stock Exchange include disclosure of key performance indicators by division, market and region, and disclosure of capital expenditure. ‘This allows the market to build a much better understanding of the company,’ McLoughlin advises.
Tough field
Perhaps the most difficult award to win is the grand prix for a non-ASX 100 company. Companies in this category compete against 1,500 others, making it tricky for any one firm to stand out. This year, pharmaceuticals manufacturer and distributor Sigma came up trumps. This is no mean feat when the entire pharmaceuticals industry had been tarnished by the unethical behavior that led to the collapse of Pan Pharmaceuticals earlier this year.
Sigma managing director Elmo de Alwis says taking personal responsibility for investor relations ensures its importance in the organization. ‘It’s a function I don’t delegate – I make sure I’m available to everybody,’ he says, adding that he ‘understands the responsibility of forecasting the future of the business. I have a responsibility to ensure we deliver against that forecast.’
De Alwis says this focus on IR has had significant influence on the share price. ‘We’ve only been listed since 1999. Then, market capitalization was A$167 mn ($115 mn) now it’s half a billion on the same number of shares,’ he notes.
This year the award for best communication to the financial media went to ANZ Bank, a considerable achievement given the media’s penchant for the sport of ‘bank bashing’. Paul Edwards, head of financial media for ANZ, says the company’s acceptance that the bashing was warranted and that it had to acknowledge stakeholders other than shareholders helped improve financial media relations. ‘Once we accepted that bank bashing was deserved, it led to more open engagement with the media,’ he says.
Edwards also believes that the convergence of media and the investor market has helped improve ANZ’s media relations. ‘We realized the media are influenced by analyst reports – and that analyst reports are also influenced by the media,’ he says. ‘We’ve really tried to look at our external body language and have much more closely integrated investor and media relations.’
So there you have it. Another awards ceremony successfully wrapped up. For those who didn’t win, fret not. It’s not inevitable that Greg Baxter and his team will win everything next year – hard work and commitment could see you on the dais in 2004.
Who knows who will shine next year? Who knows what deals are being plotted now that will form the basis of next year’s awards? Of course, the question on everyone’s lips is, who will win the highly prized best IR by a loss-making company? Time will tell. For now, it’s check ya from down under.
