26/09/2013 - 14:17

Many paths to deliver top returns

26/09/2013 - 14:17

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Managing risk and implementing methodical strategies have helped three local companies hit their targets, guests at a recent Business News Success & Leadership breakfast heard.

Many paths to deliver top returns

SOMETIMES the most satisfying moments in business are those that succeed spectacularly when the only other possible outcome would have been dramatic failure.

It’s that kind of risk-based approach to decision-making that has paid off handsomely for Sirius Resources, which notched up a one-year TSR of 3,550 per cent last financial year as it started its transition from a nickel explorer to producer.

Speaking at a Business News Success and Leadership breakfast last week, Sirius chief executive Mark Bennett said the nature of his business meant most of the decisions that affected its TSR were based on a risk-reward strategy.

“The most current (decision) was whether to spend our last few dollars in the bank drilling a drill hole at Nova, and that was literally a case where we were down to our last ever drill,” Mr Bennett said.

“There were some brokers that were encouraging us to do a bit of a capital raising that would have been deeply discounted and would have been far more beneficial to them than us. But we resisted that and we said we’re going to go for broke.

“(We said) we’re going to put it all on black or red, spend our last money. We wouldn’t necessarily have a job after that, or a company, and (we) drilled the hole.”

Mr Bennett said the sweetest moment occurred in the afternoon of the successful drill, when he was returning with the samples and he received an email from the ASX calling for a public statement as to whether Sirius Resources was still a going concern or not.

Striving for consistent returns to shareholders is a long-term goal of business leaders and Amcom Telecommunications has achieved this, with a record 11 years of 20 per cent-plus net profit growth.

Chief executive Clive Stein said the key to his business was focusing on its people and actively avoiding bureaucracy.

“To be able to exploit value is really about selling another service. High utilisation delivers profit, it’s as simple as that,” Mr Stein told the business gathering.

“In order to build a high performing sales team, a high performing organisation that can actually deliver and leave the customer totally satisfied, meant a lot of focus on people.

“Building DNA within an organisation is continuous, it will continue to evolve. It is fragile though and can be disrupted very easily.

“If you look at our organisation over the last few years, one of the areas (I’ve focused on) is how can I disrupt the order within the organisation because it becomes bureaucratic – and slow in decision making, slow in customer responsiveness ­– and then bring it back to its true core, which is about an organisation that’s dynamic and that continually changes and evolves.

“Focusing on the inside and driving that engagement and empowerment is a journey that never ends and a strong passion of mine.”

The cyclical nature of the real estate market was among the greatest challenges facing property developer Cedar Woods in the quest for regular returns. And chief executive Paul Sadleir was in no doubt his firm’s steady, well-communicated plan was vital in the sometimes-volatile sector.

“For us, projects that we acquire typically take three to five years before you start seeing some revenues and profits out of them, so we’ve been fairly disciplined in the sorts of things that we bought,” Mr Sadleir said.

“It’s a lot of stakeholder management but (it involves being) very clear with our management team on what are the key milestones we need to hit each year.

“It’s being able to communicate what’s an exciting plan for the company, and a lot is happening. If it’s in the residential space we’ll have a go at it.” 

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