Alexandra Cain was in Sydney for the IR Magazine Australia Awards & Aira Conference
Global mining company BHP Billiton can do no wrong in the eyes of the Australian market. For the second year in a row, it was a big winner at the IR Magazine Australia Awards, winning seven out of a possible 17 awards. That tops the company’s five trophies in 2004.
This year BHP Billiton was again lauded by the market for its communication of shareholder value, investment community meetings, corporate literature and, for the first time, its corporate governance practices and use of technology. The company’s multiple listings in Australia, New York, London and Johannesburg are one of the key reasons it has such a sophisticated IR program, according to the investors and analysts who voted.
Tania Price, BHP Billiton’s manager of media relations and communication, says the company’s success at this year’s awards can be attributed to the IR department’s ‘strong identification as a global team. We work very closely to ensure we’re providing the same story in every market. Of course it helps that we’ve got a good story.’
After various representatives from BHP Billiton took the stage multiple times during the awards presentation, it was a surprise when the company didn’t win the most highly sought-after trophy on the night: the grand prix for best overall investor relations by an ASX 100 company, which went to banking group ANZ. Stephen Higgins, ANZ’s head of investor relations, says the group’s ‘real commitment to disclosure’ was one of the reasons it picked up the top gong. ‘It makes our job easier because we can have value-added discussions with analysts,’ he notes. ‘It means we don’t have to say, We can’t go there.’
That ANZ won this award is no mean feat, given that it was competing against all the top 100 Australian companies, including the three other major Australian banks, all of which have highly regarded IR programs. ‘To do better than the other guys is not easy,’ Higgins admits.
He points out, however, that large companies such as ANZ have an advantage in attracting investors to their registers. ‘We’re so big everyone has to invest,’ he says.
But he believes the attention given to large companies like ANZ has a downside, too. ‘Analysts spend all day looking at us, which brings us under more scrutiny,’ Higgins adds.
Knowing how the other half thinks
Understanding the workings of analysts’ minds can give companies and their IROs a competitive edge. Johanna Keating, property firm Stockland’s general manager of investor and media relations, attributes her award for best IRO at an ASX 100 company in part to her knowledge of how analysts think, developed during her time as an analyst at Merrill Lynch.
‘I can understand what analysts are looking for because I’ve been there,’ says Keating, who worked her way up in the property industry after initially working as a property valuation researcher with several different real estate agencies. With
her brokerage background, Keating says she ‘is mindful of analysts’ expectations. You don’t have to disclose more [than other property companies] but you do have to have good relationships with the market.’
Keating beat a very strong field of IROs in the ASX 100 category. But Bruce Loveday, the winner of the award for best IRO at a non-ASX 100 company, had an even tougher task. He was rated ahead of all the IROs of the 1,400 Australian companies outside the ASX 100.
As executive general manager of corporate and investor relations at Smorgon Steel, Loveday won the respect of the investment community in a relatively short space of time. He is the first full-time IRO at Smorgon Steel, having joined the company three years ago. One of the analysts who voted for him commented on ‘his passion for the business’, while others cited his openness and personal touch. One even said, ‘There’s been a fantastic turnaround of accessibility and information with Bruce Loveday at the helm.’
Loveday has taken the view that he needs to be proactive, adding that his goals are to ‘be available to provide information and to give it before the market asks for it.’ He also says one of his major objectives this year has been to change the composition of the company’s share register to include more institutions, including overseas institutions. ‘Not long after I joined, only 13 percent was owned by institutions – now they account for 30 percent-35 percent,’ he explains, adding that overseas institutions’ representation has grown from 1 percent to just under 6 percent.
Best IR for a new issue went to investment group Babcock & Brown, which has certainly been the most high profile of all the floats on the Australian bourse this year. nterestingly, the company took what could be viewed as a contrarian approach to its IR program. Director Robert Topfer says the company did not seek to ‘capture the attention’ of the market. ‘We wanted to stay out of the limelight,’ he points out.
This may be a sensible strategy, particularly as the Australian media is renowned for knocking the heads off ‘tall poppies’ – and Babcock and Brown undoubtedly is one. ‘The business is focused on producing results and letting them speak for themselves,’ Topfer asserts.
Babcock & Brown’s history as a private company means it was unused to being in the spotlight. Topfer says this created ‘a bit of mystique at an institutional level’, which encouraged interest in the stock in the lead-up to the float. Now the company’s aim is to explain how its constant stream of transactions affects the company. ‘It’s an endless battle to keep shareholders informed,’ Topfer adds.
This is a sentiment no doubt shared not only by the winners of this year’s IR Magazine Australia Awards, but by every IRO in the market.
At the conference
Australia’s joint parliamentary committee review of corporate responsibility was one of the hottest topics at the September 2005 Australasian Investor Relations Association (Aira) Conference, held in association with IR magazine at the Westin Hotel in Sydney.
One of the central points the committee will debate is whether the responsibilities of company directors should be extended to include not only financial responsibility for the
companies they oversee, but also social and environmental responsibilities.
The conference was addressed by Jennifer O’Donnell, executive director of compliance at the Australian Securities & Investments Commission (Asic). O’Donnell warned IROs they could expect Asic to be more vigilant about the way it monitors compliance with Australia’s strict continuous disclosure requirements and issues fines to companies it believes breach these laws.
The real scuttlebutt at the conference, however, was about the new powers given to Australian shareholders to post a non-binding vote on listed companies’ remuneration policies.
Companies including building products manufacturer Rinker and financial house Investa have already come under fire for unacceptable executive remuneration packages. During the conference, many IROs could be overheard swapping stories about how they would deal with this new requirement during this year’s AGM season.