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Moore’s moves leave markets unsure

The business formerly known as Hartley Poynton has struggled to convince the market it has a magic formula under the leadership of Tim Moore. Even he knows he has to start producing a profit soon. Mark Pownall reports.

IF stockbroking supremo Tim Moore was a politician there is no doubt he’d be feeling the heat at the moment.

In the past month the company Mr Moore heads has abandoned its national investment banking aspirations and dropped its two-year-old HP JDV name in favour of a version of the original Hartley Poynton.

In politics, such moves would be called backflips. And coming from a leader with seven years in the job, questions would be asked about his grip on a position that earned him $800,000 last year.

To many who watch Hartleys, as it is now called, the sudden changes raise more questions about its strategic direction.

A leap into the technology field that, with a name change to reflect the arrival of IT division JDV, is one decision that has long had its doubters.

Such concerns have been given some currency by the financial impact, like the $5.4 million pre-tax loss for the first half of 2001-02. Though this result largely reflected poor earnings in the wealth management side of the business, there are those that feel the stockbroking business would have been better off with the millions spent on JDV.

The competition is happy to muddy the waters, too. Two weeks ago, Business News published claims by Paterson Ord Minnett that it had become WA’s premier brokerage, something which is known to have irked many at Hartleys.

There also has been a steady trail of long-term employees who have left the company of late, adding to the impression of an operation suffering a crisis of some sort.

But Mr Moore doesn’t see it that way.

He sees the measure of his performance as passion for the job and objectives met. On that count he sees no pressure coming to bear on him, or any threat to the position he has held since before Hartleys listed.

“I feel I am the happiest guy in WA,” Mr Moore said.

Perhaps he has reason to feel confident.

This is business. Democracy ends at the shareholder register and the life of the leader depends on the patience of the capital backing the enterprise.

The arrival of Westpac as a major shareholder last year completely changed the business’ ownership dynamics.

Westpac took a 28.6 per cent stake in Hartleys, watering down Royal Bank of Canada’s position to one that appears equal in size.

The reality is, Westpac has become the dominant force on the register. It clearly arrived with a plan and, unless that goes awry, there is no reason why the bank should start looking for heads to kick.

Mr Moore acknowledges that some of the recent changes, like the investment bank cutbacks, reflect this new relationship.

He said it was unfair to call such moves backflips.

“When a business has a dominant shareholder one tends to tailor strategy with a lot of input from that shareholder,” he said.

“With RBC at 40 per cent of the business we needed to configure our business in a way that suited their needs.

“The change in the situation where you have two equal shareholders and the dominant shareholder, by weight of shares and by presence in the marketplace, is Westpac.

“We are now more sensitive to what makes more sense to Westpac.”

“The other thing which became obvious is the wealth management business needs an associated corporate finance and research capability.”

That meant refocusing the investment banking business back on WA.

Mr Moore said that change in direction was aimed at ensuring the focus on the wealth management side of the business was on track. That, he said, was virtually the only thing Westpac would be looking at in these early days, and therefore the only true performance indicator.

“The issue is all about being on plan. That is absolutely fundamental,” Mr Moore said.

“When you are externally measured the issue might be about redundancies and about profit. Internally it is different.

“In the past six months Westpac would only have been looking to see ‘is this business increasing funds under advice’.”

Mr Moore said that, by this measure, Hartleys was well and truly performing, adding about $1 billion in funds under advice in the past eight months, a 50 per cent gain in that time and triple the amount Hartley Poynton had when it listed in 1996.

The name change is not something Mr Moore claims is connected with the arrival of Westpac. Neither does he see it as a final exorcism of the Poynton name after the internal pre-listing listing struggle, which resulted in the departure of then chairman John Poynton, the son of founder Hartley Poynton.

Mr Moore said the HP JDV name was not designed to capitalise on the heady days of the technology boom and had succeeded in doing its job – bringing recognition and customers to the JDV technology business.

“Against that objective it has been successful, but the time has passed,” he said.

Mr Moore said they could not go back to Hartley Poynton because the business had changed.

“At the end of the day this (Hartleys) is what everyone calls us,” he said.

Others in the market might argue that its colloquial name is actually Poyntons, something that is reinforced by the fact that that name was in the firm’s original email addresses with the suffix @poyntons.com.au

As for other performance indicators, Mr Moore is unmoved by suggestions that the company has had an exodus of senior staff and a management team which will not challenge his authority.

“I think there is a fallacious view about the number of senior people who have gone versus the reality,” he said.

“The professions tend to create the most banter about the firm in many ways when it is leading the pack.

“If the various broking firms in Perth went silent on Hartleys it would concern me greatly.”

So what will silence the critics? Those who wonder how Mr Moore still has a job.

“In the world of public-listed companies, particularly small public-listed companies, people work on a diet of half yearly profit results,” he said.

“The decision to go on a profit holiday for a couple of years while creating a new business model is something most public companies would not have the appetite for.

“The end game is Hartleys wants to be a dominant Australian brand in wealth management.

“Outside of the business, a reversed assessment of the business will come with consistent profitability, we know that.

“We are not here to not make money. We appreciate that a lot of sentiment gets tied up in the losses being put behind us.

“The management view, very strongly, is that the building phase is behind us and the business will be profitable throughout next financial year.”

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