15/02/2012 - 10:16

Perth’s top PR firms take cream in year’s big plays

15/02/2012 - 10:16

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FTI Consulting and Professional Public Relations are the top financial PR firms in Perth, WA Business News’ annual corporate finance survey has found.

Perth’s top PR firms take cream in year’s big plays
GLOBAL: FTI Consulting’s Perth team is led by John McGlue (seated) with James Tranter, Shaun Duffy and Sarah Browne. Photo: Grant Currall

FTI Consulting and Professional Public Relations are the top financial PR firms in Perth, WA Business News’ annual corporate finance survey has found.

Every profession has its unflattering stereotype, some more revealing than others.

For public relations, it’s the journalist who crosses to the dark side and becomes a ‘spin doctor’.

What, then, do we make of public relations firms that employ stockbrokers, accountants and investment managers?

That is the direction some of Perth’s major PR firms are taking, as they compete for business in the corporate finance sector.

Building national and international links is another way PR firms are looking to differentiate themselves.

In fact, there are some close parallels to trends in the investment banking and legal sectors, where competitors range from independent, locally focused firms to big international groups targeting Perth as a growth region.

Just as global investment banks such as UBS and law firms such as Allen & Overy and Clifford Chance have moved into Perth, the talk in the PR industry is that the city will soon be home to more of the big, international firms, which currently service clients in Western Australia on a fly-in, fly-out basis.

New players will be taking on an industry that is surprisingly concentrated at the top end, with just a handful of financial PR firms dominating the sector.

The largest, on several measures, is Subiaco-based Professional Public Relations. It has the most staff, the longest client list and worked on more mergers and acquisitions (M&A) and equity capital markets (ECM) deals than any other firm during 2011.

But when ranked on the value of M&A and ECM transactions, it was beaten in both categories by Nedlands firm FTI Consulting.

Their main competition comes from a couple of local firms, Read Corporate and Purple Communications, and a swag of east coast firms that each hold a small share of the buoyant Perth market.

The latter group includes Kreab Gavin Anderson, which hired experienced operator Casey Cahill to set up its Perth office, and Magnus, which was already active in Perth before setting up a local office late last year.

Skimming around the market are numerous one and two-person outfits that may not offer the full suite of services of their larger competitors but deliver the service and pricing that suits their clients.  

Financial focus

With so many competitors, what value-add can a company expect from their financial PR firm? There are standard services offered by most firms – writing and distributing media releases, preparing company reports and PowerPoint presentations, arranging media briefings and organising site visits.

The market leaders add to that with some more sophisticated services focused on the financial markets. They promote their ability to introduce clients to stockbrokers and investors.

They also offer services like analysis of share registers, management of proxy solicitation and analysis of industry peers.

One measure of a good PR firm is its ability to keep its clients out of the news.

If a company is consistently well run, manages its reputation and investor relations properly, and does not shock the market with surprises, then executing capital raisings, takeovers and other transactions is a relatively painless exercise.

But life’s more interesting when PR firms assist clients going through a challenging period, or a transaction that transforms a business.

FTI Consulting managing director Shaun Duffy admits that his firm’s work for Murchison Metals was one of the highlights of 2011, given the complex array of issues, the engagement with markets, media and government, and the surprisingly positive outcome for shareholders.

He also cites capital raisings for Neptune Marine Services and VDM Group, which have both been through a tough period and needed extra capital to rebuild their balance sheets.

PPR spreads wings

PPR has been one of the largest public relations firms in Perth for more than a decade, according to data compiled for WA Business News’ Book of Lists.

Unlike most PR firms, which are set up by either former journalists or PR specialists, PPR was established in Perth by a former commercial banker (and WA Business News 40under40 award winner), Paul Niardone.

He has subsequently sold out of the business, which is now fully integrated in the national PPR business.

As well as being a large firm with a national network, a key point of difference for PPR is its specialist investor relations team, headed by national director David Tasker.

His Perth-based investor relations team has eight full-time staff and draws on a similar number in the firm’s corporate and other divisions, including chief operating officer Peter Harris.

The Perth team can also draw on PPR’s interstate staff and, where necessary, affiliated firms in the UK, North America, Asia and Africa.

The investor relations team has more than 80 clients, including Monadelphous, BC Iron, Finbar, Decmil Group and Cape Lambert Resources.

A notable initiative last year was the production of a quarterly investor magazine, with a commodities commentary by UBS and articles about selected clients.

Distributed as an insert in the Australian Financial Review, the magazine has the appearance of being an independent publication but is simply a platform for promoting PPR’s clients.

It’s an interesting development, because there are numerous trade magazines that effectively allow advertisers to have control over the content of their articles.

An area where many financial PR firms are focused is business conferences, such as Diggers & Dealers in Kalgoorlie and the recent Mining Indaba conference in Cape Town.

Another event growing in popularity is the Mines and Money conference in Hong Kong. Purple Communications is the official PR partner for the event, but many other PR firms will be attending.

PPR, for instance, plans to take 20 clients to the event, where it will produce a magazine and will have its own resources pavilion covering four booths.

FTI a global operation

FTI Consulting is well established as a leading financial PR firm in Perth, though a series of ownership changes (and numerous name changes) have seen the Perth practice become part of a diversified international business.

FTI globally has 3,800 staff operating in areas as diverse as corporate restructuring, economic consulting, forensics, technology and strategic communications.

The mainstay of the Perth office for the past 20 years has been Paul Downie, who has been a key adviser to Fortescue Metals Group founder Andrew Forrest for much of that time.

He teamed up in 2002 with another Perth identity John McGlue, who cut his teeth as a business and politics journalist before moving into stockbroking then consulting.

Mr McGlue has recently taken a new role as non-executive chairman of FTI’s strategic communications business across Australia.

Shaun Duffy, an accountant by trade who has previously worked at Patersons, Alinta and tech companies ERG and Orbital, is the firm’s current managing director in Perth.

The FTI team also includes corporate and public affairs director Sarah Browne and investor relations director James Tranter.

Its number one ranking (by value) in WA Business News’ M&A and ECM league tables adds to similar rankings in national surveys, including by merger market.

FTI also claims to have worked on six of the top 10 national deals of 2011, including advising SAB Miller on its successful takeover of Foster’s.

Its WA ranking was helped by its work for Equinox Minerals, Seven Media Group and Hanlong Mining Investment in M&A and Fortescue Metals Group and Wellard Group in capital raisings.

Mr Duffy said the biggest change he had seen over the past year had been the rise of digital and social media.

“More commentary is happening in a less formal manner,” he said.

Mr Duffy said FTI could deliver results because it understood the market.

“We understand what the market wants to see, and package it up in a form where people are going to properly appreciate it,” he said.

A firm with a growing profile is Purple Communications, established in 2004 by former FTI consultant Warrick Hazeldine.

Mr Hazeldine believes that operating an independent Perth firm with global links via the Public Relations Organisational International network offers the best of both worlds.

For instance, Mr Hazeldine (and many of his competitors) recently attended the Mining Indaba conference in Cape Town, where he was able to draw on the networks of his South African affiliate to meet with investors and organise site tours.

He will also be attending the popular Mines and Money conference in Hong Kong, for which Purple is the official media partner.

Mr Hazeldine said he had been building links into Hong Kong and China since 2005, helping his firm to link WA companies with Asian money.

Purple has a total of 15 staff, with the latest recruit being senior counsel Greg Galton, who previously worked as an investment and research analyst at Colonial First State and RCM Capital.

Mr Hazeldine said the growing sophistication of financial PR firms was illustrated by the work Purple was doing for takeover target African Iron.

He said Purple and law firm Freehills were working directly with African Iron’s board to prepare the target’s statement, without an investment bank being involved. The firm worked on 22 M&A and ECM deals last year, for clients including NRW Holdings

Among other financial PR firms in Perth, Read Corporate (formerly Jan Hope & Associates) has long had a strong market share among junior and mid-cap mining stocks.

Run by former business journalist Nick Read and former editor of The West Australian, Paul Armstrong, the firm’s client list now includes some of the state’s most prominent mining companies, such as Atlas Iron, Gindalbie Metals and current takeover target Sundance Resources

 

Note: Mandate Corporate, a Sydney-based consultancy run by former Perth journalist James Moses, has become a significant player in the financial PR market.

It advised on eight capital raising transactions worth $86.1 million during 2011, for clients including Ironbark Zinc, Consolidated Tin Mines, Winmar Resources and Wolf Minerals.

This information was not correctly reported in the print edition of WA Business News.

 

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