31 January 2021

ASX introduces new ‘15% Rule’

Ben Rebbeck, Founding Director

Recently, the ASX announced updates to Guidance Note 8 on continuous disclosure requirements in relation to earnings guidance.

While the ASX retained the framework of its existing guidance in the update, its changes to Guidance Note 8 include a new ‘15% Rule’ regarding the impact of broker consensus earnings on guidance and earnings surprises, as follows:

“Where an entity does not have published earnings guidance on foot for the current reporting period and it is covered by sell-side analysts, ASX would recommend that the entity carefully consider notifying the market of a potential earnings surprise if and when it expects there to be a 15% or greater difference between its actual or projected earnings for the period and its best estimate of the market’s expectations for its earnings…”

The ASX has also set out exactly what it expects to see in an announcement about a market-sensitive earnings surprise. Notably, in some circumstances, this will require announcing quantitative guidance even if it had never published earnings guidance in the first place.

Following the changes, generally, earning guidance disclosure requirements, in declining order of importance to any disclosure, can be summarised as follows:

Guidance published No Guidance Published
Analyst Coverage
No Guidance Published
No Analyst Coverage
Expected earnings 5%–10% above or below guidance range (i.e.no change in rule) Expected earnings and consensus differ by 15% ASX has not provided precise percentage guidance.
15–20% change to pcp may be relevant benchmark
Update guidance range Provide guidance and state earnings expected to differ materially from consensus Provide guidance re expected difference to the previous corresponding period

In making these changes, the ASX has affirmed that these benchmarks are indicative of when an earnings surprise announcement ‘should be considered’, rather than ‘should be made’.  While subtle, this wording difference is critically important.  They stress it is only an expected material impact on share price and market trading which drives the requirement for an ASX announcement. That is, no expected material impact on share price / trading…no announcement required.

So if the market has already taken into account sector and market specific events impacting share price, the effect of those events causing the earnings surprise need not be announced.   We suspect it will take a highly confident board to make such a non-disclosure decision.

The changes introduced by the ASX are particularly notable in the current environment as:

  • The quantum and quality of broker analyst research continues in its long term decline trend, spurred on more recently by the impacts of MIFID II, COVID-19 related employee changes and ongoing margin contraction within brokers; and
  • many ASX listed entities withdrew their earnings guidance shortly after the onset of the COVID-19 pandemic and have not since reinstated issuing earnings guidance. The 15% Rule effectively overrides this position.

It could be argued that the changes impose a new regulatory burden as they expressly require listed entities to monitor and treat broker consensus as the benchmark of market expectation and, furthermore, they require such entities to correct “mistakes” and “errors” by analysts.

And while, for mid- and small-caps dealing with issues associated with declining analyst coverage is nothing new, large caps are finally having to address this reality. In that respect, it has always been the case that entities should avoid “earnings surprises” even where they do not issue earnings guidance.

The introduction of the ‘15% Rule’ will give greater clarity to what may be considered to be an earnings surprise.

Notwithstanding this, by including the notion of entities making a ‘best estimate of market expectation’; the ASX acknowledges that the universe of published analyst research may include:

  • out of date forecasts,
  • erroneous assumptions and analysis; and
  • the impact of outlier forecasts on consensus.

Consideration should therefore be given to which analysts’ research is included in the ‘best estimate’ of consensus and which is not.   It has long been FIRST Advisers’ view that any listed company that refers to ‘consensus’ should expressly state what that consensus range is or includes.   Thus, the new ASX guidance reaffirms FIRST Advisers’ long held position.

Finally, the ASX has also taken the opportunity to make some minor editorial changes to Guidance Note 8, noting the recent decision in ASIC v Big Star Energy Limited. In that case, the Court held that Big Star breached Listing Rule 3.1 by announcing the sale of a significant asset without disclosing: (a) the identity of the purchaser; (b) that the entity had done no due diligence to verify the capacity of the purchaser to complete the purchase; and (c) that the entity had in fact been informed by the purchaser that it had not yet received all funding approvals required to complete the purchase. The transaction ultimately failed to complete. The Court specifically rejected an argument by the entity that because the purchase was for a cash consideration, the identity of the purchaser was not material.

30 September 2021

Virtual AGMs

GILES RAFFERTY, Corporate Communication and Media Advisor Talking the talk at virtual AGMs As AGM season looms large, the Australian Federal Government has given clarity around what will be required to hold a virtual Annual General Meeting during the latter part of 2021. A key change, compared to the COVID-19 inspired temporary arrangements introduced in 2020, […]

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30 September 2021

Activists in Action

Another quiet month on the activism front in Australia with the two recent campaigns both involving founders targeting Companies they set up. In August, Si6 Metals had two 249D notices issued to them from interests associated with Patrick Volpe, the founder and former Chairman of Si6. The first notice, on 6 August proposed to elect […]

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31 August 2021

Nailing Your Virtual Events

ROWAN CLARKE, Investor Relations With most of Australia being plunged back into lockdown, and the August reporting season about to merge into roadshow season, there is no getting away from the fact that virtual briefings and meetings are still the only way to connect with shareholders and investors. So in this blog we explore the […]

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27 July 2021

Starting the ESG journey

ROWAN CLARKE, Investor Relations At FIRST Advisers, we are increasingly offering advice to companies on how to best position themselves to meet investor demand for ESG accountability. What was once seen as a topic for socially conscious asset managers, is now widely adopted by investors. ESG was a hot topic at the US based National […]

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30 June 2021

The IPO Market in 2021

ROWAN CLARKE, Investor Relations The IPO market in 2020 sprang into life in October, having retreated into hibernation with the advent of COVID. The rush to list turned into a stampede as the year drew to a close with December registering a record listing in one month of 29 companies. This included large and high […]

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31 May 2021

All you need to know about Short Selling

SALONI SURI, Investor Relations Executive. Overview Short selling is a simple concept—an investor borrows a stock, sells the stock, and then buys the stock back to return it to the lender. In the period between selling borrowed stock and buying it back the investor is said to be ‘Short’ of stock, hence the term short […]

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31 May 2021

ESG at the Vanguard of proxy voting

GILES RAFFERTY, Corporate Communication and Media Advisor. The financial markets adage is if Wall Street sneezes other markets catch cold. So it is worth keeping an eye on what’s happening in US financial markets as trends there tend to inform decision making elsewhere. In this context we have been interested to note how Vanguard, one of […]

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30 April 2021

Proxy Advisors in a time of COVID

GILES RAFFERTY, Corporate Communication and Media Advisor The Coronavirus pandemic continues to ravage the world, we canvassed the three main Proxy Advisory firms operating in Australia Ownership Matters, CGI Glass Lewis and ISS to get a sense of what impact corporate and government responses to the pandemic has had on governance and their voting recommendations. Widening […]

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30 April 2021

The Convergence of ESG and Activist forces

VICTORIA GEDDES, Executive Director Activism during COVID A review of the impact of COVID 19 on activism globally in 2020 would suggest that it largely reinforced the trend of slowing activity that has been evident since its peak in 2018. In Australia the number of companies publically subjected to activists’ demands returned to the annual […]

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30 March 2021

How fair is your SPP?

ANNA FUGLESTAD, SHAREHOLDER ENGAGEMENT Over the past year as companies have taken advantage of buoyant equities market and COVID related exemptions to undertake capital raisings, retail shareholders have jumped on the opportunity to increasing their holdings through Share Purchase Plans. FIRST Advisers recently analyzed all Share Purchase Plans that occurred between March 2020 and February […]

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30 March 2021

Who’s really on your register?

IDENTIFYING THE BENEFICIAL OWNERS OF SHARES   ROWAN CLARKE, INVESTOR RELATIONS The ability to interrogate a company’s share register to identify its beneficial owners provides important information to Directors. In addition to identifying who is making decisions to buy and sell shares, it enables the Board and senior management to identify such things as where […]

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4 March 2021

The return of Guidance

DAN JONES, MANAGER SHAREHOLDER ANALYTICS In April 2020, we wrote that more than 80% of companies withdrew their FY20 guidance amid uncertainty surrounding COVID-19. During the February 2021 earnings season, we recommenced monitoring the results of S&P/ASX300 companies to establish to what extent the provision of guidance has been re-adopted and how companies are viewing […]

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4 March 2021

Locking in the Trust premium

GILES RAFFERTY, Corporate Communication and Media Advisor Trust in Australian Institutions has surged during the Coronavirus pandemic to reach all-time highs.  This resurgence of trust means, in Australia,  the institutions of Business, Government, Media and NGO’s are all now viewed as competent where just 12 months ago only Business was seen to be so. Two institutions, […]

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31 January 2021

Fink doubles down on climate

GILES RAFFERTY, Corporate Communication and Media Advisor Restating that climate risk is investment risk, Larry Fink, the Founder, Chairman and CEO of Blackrock, the world’s biggest and arguably most powerful investor, is calling for companies to share their plans for the transition to a net zero economy in his annual letter to CEOs. Mr Fink […]

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31 January 2021

ASX introduces new ‘15% Rule’

Ben Rebbeck, Founding Director Recently, the ASX announced updates to Guidance Note 8 on continuous disclosure requirements in relation to earnings guidance. While the ASX retained the framework of its existing guidance in the update, its changes to Guidance Note 8 include a new ‘15% Rule’ regarding the impact of broker consensus earnings on guidance and earnings […]

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31 January 2021

The IPO Market in 2020 – the Final Scorecard

VICTORIA GEDDES, Founding Director In September 2020 the door to the IPO market flew open and dozens of companies poured through in a rush to list before the Christmas/New Year shut down. Memories were still fresh from late 2019 when a promising IPO market was stopped dead in tracks in October as several high profile […]

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11 December 2020

2020! A year like no other

2020 was a year filled with extreme and extraordinary events. All of which played out in the context of the extraordinary global health crisis that is the Coronavirus pandemic. A year of extremes Here in Australia we endured bush fire disasters, the death of the Holden car brand and the tragedy of SAS war crimes […]

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30 October 2020

ESG Reporting among the ASX300

DAN JONES, Manager Shareholder Analytics As institutional investors increasingly demand more accountability for Environmental, Social and Governance (ESG) performance, companies face pressure to improve their standards of ESG reporting. However, unlike financial data, ESG information has no legislated or regulatory reporting guidelines or formats so the mechanism for delivery and any adoption of a reporting […]

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30 October 2020

Video with vim and vigour

GILES RAFFERTY, Corporate Communications and Media Advisor The camera never lies! A broad statement that still holds true despite the incredible advances in software to manipulate digital imagery. The cameras built into smartphones and laptops are amazingly sophisticated but are no guarantee that a video presentation will look good or be engaging. If you don’t […]

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30 September 2020

REVISITING SAME-DAY REPORTING TWO YEARS ON

Between 2016 and 2018, FIRST Advisers monitored how long companies took to release their Annual Report following the release of their Financial Results. The implementation of Same-Day Reporting has become an industry standard in terms of best practice investor relations because it reflects a commitment to release this document at a time when it has […]

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28 September 2020

The IPO window is wide open, but for how long?

VICTORIA GEDDES, Executive Director. The IPO window has unexpectedly opened after more than 18 months of subdued activity. Given the slowdown since February due to COVID-19 and the level of uncertainty surrounding the outlook for economic growth, no-one was banking on a quick return in 2020 to the levels of activity that the market had enjoyed […]

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28 September 2020

TOP TEN TIPS FOR IPO COMPANIES

VICTORIA GEDDES, Executive Director. As the market braces for an avalanche of IPOs to hit the market in the December quarter, it is time to review our playbook for IPO investor relations, to highlight just what it takes to maximise the chances of a successful life after listing. Here are our top 10 Investor Relations tips […]

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28 September 2020

Compliance update: Capital raising relief extended

This month, ASIC extended its temporary relief for capital raisings aimed to assist listed entities affected by the COVID-19 pandemic to raise capital in a quicker and less costly way without undermining investor protection. The temporary measures were due to expire in October 2020. The temporary measures will now expire on 1 January 2021. The […]

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31 August 2020

Activism in 2020

VICTORIA GEDDES, Executive Director. At FIRST Advisers we pay close attention to the activist space in Australia, having worked on many campaigns for both activists and companies over the past ten years. In our monthly newsletter we have a regular slot that summarises for our readers the various activist campaigns over that month and we […]

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30 July 2020

Assessment of Virtual AGMs — Must try harder!

BEN REBBECK, EXECUTIVE DIRECTOR As the repercussions of the COVID pandemic started to impact the corporate sector ASIC, the Australian corporate regulator, following advice and prompting from their foreign counterparts, allowed Australian listed companies to hold fully virtual Annual General Meetings. ASIC’s pathway to enable virtual AGMs, as they were the first to admit, was […]

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28 July 2020

Corporate Purpose during the Coronavirus pandemic

GILES RAFFERTY, Corporate Communications and Media Advisor, writing for the Winter 2020 Issue of Listed@ASX. What does the Coronavirus pandemic and the ‘new normal’, that is expected to emerge in its wake, mean for a Company’s purpose? As the pandemic surges across the globe many senior corporate leaders will, rightly, view the immediate purpose of […]

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30 June 2020

A new number 3 share registry

GILES RAFFERTY, Corporate Communications. An interview with Ben Kay, Executive Director, Automic At FIRST Advisers our shareholder analytics team works with all registries in the delivery of beneficial ownership analysis reports to our clients. We have watched the increasing penetration of Automic Group as a new player in the registry market in recent years and […]

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29 June 2020

The Tipping Point for ESG is Now (Part Two)

VICTORIA GEDDES, Executive Director. In Part 1 of our article on ESG last month* we looked at the extent to which ESG reporting has gained hold in Australia and whether the strong performance of ESG funds recently might represent a moment in time when investing according to ESG principles becomes mainstream. We introduced the Standard […]

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28 May 2020

Designs on Annual Reporting

GILES RAFFERTY, Corporate Communications. It is time to think about Annual Reports and then to think again. While an Annual Report must include content required by the Corporations Act and the ASX listing rules,that doesn’t mean we should limit our thinking to just meeting that objective. It is right and proper for the compulsory materials, […]

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28 May 2020

The Tipping Point for ESG is Now

VICTORIA GEDDES, Executive Director. The relentless push towards the adoption of Environmental, Social and Governance (ESG) reporting by companies across the globe appears to be gaining momentum. As entire populations have gone into hibernation in an effort to contain the spread of the coronavirus, the topic of greatest interest in the global investment community is […]

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30 April 2020

Disclosure and guidance during COVID-19

VICTORIA GEDDES, Executive Director. ASX Compliance Updates with some reminders on Disclosure Rules on Earnings Guidance Since the end of February 2020, ASX has released three key Compliance Updates (28 February, 31 March and 22 April) which include a raft of amendments or reminders, prompted in the main by the challenges associated with the impact […]

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30 April 2020

Getting COVID-19 capital raisings away

RON CAMERON, Investor Relations. The need to engage shareholders directly as a result of Recent Changes to Capital Raising Requirements ‘May you live in interesting times’, which is often characterised as a Chinese curse, has never been as relevant as it is today, in the time of COVID-19. Personal circumstances have been turned upside down […]

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30 March 2020

Guidance in Uncertain Times

VICTORIA GEDDES, Executive Director Guidance and outlook statements, freshly minted from the February reporting season, are already being consigned to the waste paper basket. This makes sense when every week brings a new development that has the potential to threaten the very survival of many businesses. So what do you say to your shareholders when […]

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2 March 2020

Cybersecurity and Notifiable Data Breaches: What have the last 2 years taught us?

VICTORIA GEDDES, Executive Director It’s exactly two years now since the Federal Government introduced its Notifiable Data Breach (NDB) scheme. It requires every private and public company with annual turnover of $3 million or more, listed or not, to report cyber breaches that are likely to result in serious harm to individuals whose personal information […]

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28 February 2020

Australian CEOs need to take a stand

GILES RAFFERTY, Corporate Communications and Media Advisor Australian’s don’t trust business. This is a key finding of the Edelman Trust Barometer, published on 19 February, which has been measuring levels of trust in business, Government, the media and NGOs for the past 20 years. It will be little comfort to Australian business leaders to know […]

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30 January 2020

Time to confront climate change

GILES RAFFERTY, Corporate Communications and Media Advisor Every Government, company and shareholder must confront climate change according to Larry Fink, CEO and Chairman of BlackRock, the world’s largest asset manager. In his annual letter to CEO’s, Mr Fink says a rapidly growing awareness amongst investment market participants of the risks climate change poses to economic […]

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30 January 2020

Communicating in a crisis

GEOFF MICHELS, Senior Adviser, Corporate Communications One month in to 2020 and news headlines have been dominated by the bushfire crisis while the business pages have been reporting on the Australian retailing crises which has seen big brands literally shutting up shops, including the shock withdrawal of Kaufland from the Australian market. The crises in […]

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29 November 2019

CORPORATE PURPOSE

GILES RAFFERTY, Corporate Communications and Media Advisor ‘The more things change, the more they stay the same’ is an adage that could easily be applied to the re-prioritising of a company’s Purpose as the underpinning of its culture and long term, sustainable growth. Only last August, The Business Roundtable (BRT) an American association whose members […]

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28 November 2019

Acclimatising to a new normal? – 2019 in review

GILES RAFFERTY, Corporate Communications and Media Advisor 2019 is bookended by environmental challenges. The year began with massive fish mortalities in the Murray Darling and is ending with a devastating, early bushfire season that has impacted every state in the country. In between, on the global stage, climate activist Greta Thunberg made an impassioned speech […]

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30 October 2019

Australian Activism: Down but far from out

VICTORIA GEDDES, EXECUTIVE DIRECTOR As we approach the end of the year with, realistically, less than two months left to launch and complete a new campaign, the stats already tell us most of what we need to know about the changing shape of activism in Australia in 2019. Activity is 20% down on last year’s […]

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30 October 2019

ASX tightens listing rules

GILES RAFFERTY, Corporate Communications and Media Advisor “It’s important that ASX keeps evolving the listing rules so they remain contemporary, address emerging compliance issues, and continue to serve the interests of issuers, investors, and the Australian economy.” Kevin Lewis, ASX Chief Compliance Officer. A range of changes to the ASX listing rules will come into […]

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30 September 2019

THIS IS WHY MANY OF YOUR RETAIL SHAREHOLDERS DON’T VOTE

BEN REBBECK, EXECUTIVE DIRECTOR Poor retail voter turnout is often accepted as ‘the norm’ and put down to reasons such as lack of retail investor interest to lack of company engagement. While these factors may partly contribute to poor retail voting, there is one structural cause that is relatively unknown and therefore not addressed by […]

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30 September 2019

Five ways to improve an IR website

An Investor Relations website is the critical channel through which to communicate educate and engage with investors. It should be more than a demonstration of compliance with the Corporations Act 2001 and a listed company’s disclosure obligations. It is a gateway through which to tell a company’s investment story so it is equally well understood […]

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5 September 2019

ASIC ups limit for Share Purchase Plans in a win-win for investors and corporates

RON CAMERON, SENIOR ADVISER, INVESTOR RELATIONS Markets regulator, The Australian Securities and Investment Commission (ASIC), has doubled the amount that retail investors can contribute to Share Purchase Plans. The change is the result of ASIC updating the Class Order that defines how ASX listed companies can issue shares, via a SPP, to registered shareholders without […]

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3 September 2019

FIRST Advisers Annual Guidance Report – FY20

DAN JONES, MANAGER SHAREHOLDER ANALYTICS During August we monitored companies in the S&P/ASX300 Index that reported for the period ending 30 June 2019, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook for FY20. Victoria Geddes, Co-founding Executive Director at FIRST Advisers said “If […]

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31 July 2019

Are you Roadshow Ready?

VICTORIA GEDDES, Executive Director Over the next few weeks, CEOs, CFOs and investor relations professionals will be gearing up for the post results briefing roadshow. For most it will be an intensive three days, maybe 4 or 5, of meetings with shareholders, brokers and potential investors in Sydney, Melbourne and maybe one or two other Australian […]

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31 July 2019

Activism in 2019

DANIEL JONES, SHAREHOLDER ANALYTICS AND IR As we approach the traditionally busiest quarter for shareholder activism in Australia, it is time to take stock of how activists have fared to date in 2019. Has Activism in Australia peaked or just taking a breather? According to Activist Insight, in 2019 there have been 42 public activist […]

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29 June 2019

Leading with Purpose

GILES RAFFERTY, Corporate Communications and Media Advisor We are fast approaching the first reporting season under the 4thedition of the ASX Corporate Governance Principles and Recommendations. An aspect of the new Principles and Recommendations, which we wrote about in our March 28th ‘Purpose for the Board’ blog, is the elevation of responsibility for linking a company’s […]

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29 June 2019

Is 2019 ‘The Year of the ESG Fund’?

BEN REBBECK, Executive Director The ascendency of ESG matters within Fund managers, Board rooms and with IROs has unquestionably been rising rapidly in recent years. In this context, a question we often address from Directors and IRO is: Are ESG funds just another short term market trend, like ‘Hedge Funds’ were some 5 to 10 years […]

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4 June 2019

Are Traditional Active Equity Managers Facing Extinction?

VICTORIA GEDDES, Executive Director There are two big trends emerging in funds management and both have implications for how companies engage with the shareholders on their register, target new investors and determine the optimum composition of their register for funding long term capital growth. The Rise of Passive Funds… The rise of passive funds, and in […]

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4 June 2019

Time for Proxy Advisors

GILES RAFFERTY, Corporate Communications and Media Advisor AGM season may seem a long way off for many ASX listed companies but June and July are prime time for engaging with proxy advisors in advance of the peak months of proxy season, between August and October. Proxy advisors play a vital role in helping inform investment […]

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1 May 2019

The importance of good design

GOOD DESIGN is the difference between telling someone and showing them. It can be the difference between informing your audience or convincing them. A carefully composed image, an effectively executed graphic concept or a thoughtfully constructed layout can convert worthy content into memorable messages. We sat down with Campbell van Venrooy, a graphic designer with […]

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1 May 2019

The Do’s and Don’ts of Investor Days (Part 2)

VICTORIA GEDDES, EXECUTIVE DIRECTOR Following on from Part 1, published in our April 2019 Newsletter, this second part of the overview of Investor Days looks closely at what the audience wants to hear i.e. the content most commonly covered and how to put together an effective presentation. What your audience wants to know Bearing in […]

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29 March 2019

Feb 2019 Guidance Review

DAN JONES, MANAGER SHAREHOLDER ANALYTICS During February we monitored companies in the S&P/ASX300 Index that reported for the period ending 31 December 2018, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook for FY19. Around three quarters of companies within the S&P/ASX 300 index […]

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28 March 2019

Purpose for the Board

GILES RAFFERTY, Corporate Communications and Media Advisor A listed company’s Purpose is now, very much, a matter for Board consideration. The latest edition of the ASX’s Corporate Governance Principles and Recommendations makes it clear the Board is responsible for linking a company’s Purpose to its strategic goals. Principle 3 states a listed entity should instil a […]

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28 March 2019

The Do’s and Don’ts of Investor Days (Part 1)

VICTORIA GEDDES, ECECUTIVE DIRECTOR With reporting season behind us for another six months and post results roadshows underway or coming to a close, companies will soon be approaching one of the few windows available in the annual investor relations calendar to focus on planning and managing an investor day. These are not spontaneous events and […]

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4 March 2019

Cybersecurity: reported data breaches surge almost 700% in 2018

As we mark the one-year anniversary of the introduction of the Federal Government’s Notifiable Data Breach (NDB) scheme, the headlines focused on cybersecurity breaches seem to be coming thick and fast. The attack in early February 2019 on the Australian Federal Parliament’s computer network, has been identified by Prime Minister Scott Morrison as the work […]

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4 March 2019

ASX Governance Recommendations

ASX Corporate Governance Council (the Council) launched its 4th Edition of the Corporate Governance Principles and Recommendations on 27 February after more than a year of consultation. It includes input from the nineteen diverse member groups of the ASX Corporate Governance Council, including associations representing the interests of shareholder groups (ASA) and listed companies who are communicating […]

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4 March 2019

Activism in February 2019

Activists fail in Pacific Dairies board spill  Activist investor Mustafa Hasan’s attempt to replace the board at Pacific Dairies has been voted down. Hasan and fellow shareholders Dursan Cansiz, William Clarke and Necmi Uysal requested the board spill in January. They proposed replacing Directors Paul Duckett, Ray Taylor, and Chris Egan with Rhett Morson, Ping […]

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31 January 2019

February reporting preview

We entered the last reporting season in August 2018 with a high degree of optimism. That optimism was very short-lived as markets experienced a sharp sell-off in August, with actual results falling short of previous forecasts. Subsequently, news headlines have kept investors in a pessimistic mood, examples being the ongoing Brexit uncertainty and the ever-present […]

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31 January 2019

The importance of being purposeful

A well understood and expressed corporate purpose drives long term value. This is why purpose, as a driver of profitability, was a central theme of the 2019 letter from Larry Fink, CEO of Blackrock, the world’s largest investment manager, to the Board’s and senior managers of companies Blackrock has holdings in. It has also been the […]

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31 January 2019

Timing Matters When Releasing Results

It is important for a company to select an appropriate day when presenting its financial results.  With so many companies competing for attention from buy-side, sell-side and financial media, the correct timing of a result can be very important, especially for smaller companies. Understanding where the peaks and troughs are during a reporting season can help […]

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31 January 2019

Activism in January 2019

Dissatisfied shareholder looking to change up the board of Havilah Recourses  A meeting for Havilah Resources has been requisitioned by eight shareholders, collectively owning 8.1% of Havilah’s shares.  The shareholders are looking to replace two members of the board.  The investors seek to remove directors Mark Steward and Kenneth Williams, and have advanced Peter Johnson and […]

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29 November 2018

ACTIVISM IN NOVEMBER 2018

Centuria doesn’t get the votes to spill Propertylink’s board Centuria Capital has failed in its attempt to replace Propertylink’s board with approximately 99% of shareholders voting against the resolutions. In September Centuria requisitioned a meeting to remove Propertylink’s board and to replace it with its six-person slate.  At the time, Centuria Capital was looking to […]

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29 November 2018

AIRA 2018: The FIRST Advisers panel discussion on What Drives Activism in Australia

Valuable Advice for Companies from Successful Activists FIRST Advisers hosted the ‘What Drives Activism?’ panel discussion at the AIRA 2018 Annual Conference held in Sydney on the 23rd of November. While the video of the Conference, including this panel session, can be accessed here, there were a number of interesting takeouts from the discussion that […]

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29 November 2018

Interesting times: 2018 in review

Giles Rafferty, Media and Corporate Communications “May you live in interesting times”, is often presented as a Chinese curse and, as we enter the final month of 2018, it has certainly been an interesting year thus far. In Australia, the Banking Royal Commission has been the dominant story in the financial media during the latter […]

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1 November 2018

Has Activism Peaked or is it regrouping

Victoria Geddes, Executive Director Activism in Australia has some characteristics that are different to other countries around the world. We examine the make-up of activist campaigns in Australia compared to the global average and unpick some of the recent trends to see if there is a pattern emerging. This article is an extract from a paper […]

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1 November 2018

Annual Report – Same-Day Reporting

In July 2018, FIRST Advisers’ analysis of financial results reporting noted the continued trend by ASX 300 companies to publish their Annual Reports on the same day as their Financial Results. Termed ‘Same-Day’ or ‘Simultaneous’ reporting, we have updated our findings to see how ASX 300 companies with a June 30 balance date faired in […]

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1 November 2018

Activism in October 2018

AMP Shareholders get Active Merlon Capital Partners, a shareholder in AMP, sent a letter to its board on 29 October opposing the terms of a proposed sale of its Australian and New Zealand wealth protection and mature businesses. In it they detail a number of undertakings they are seeking from the board and, if not […]

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2 October 2018

The Rising Tide of Passive Investment

Dan Jones, Shareholder Analytics and IR The popularity of passive investment amongst institutional and retail shareholders continues to grow and for good reason. Passive funds have outperformed active in each year since the GFC. The term ‘passive’, however, may well be misleading. While it does describe a manager’s approach to automated stock selection and investment, […]

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2 October 2018

Make AGMs great again!

Giles Rafferty, Corporate Communications Annual General Meetings (AGMs) have to happen, it’s the law.  Consequently, the AGM is a regular fixture in a listed company’s financial calendar when the Board can be sure stakeholders are looking their way. This also makes the AGM a valuable communication moment. There are, of course, a number of necessary […]

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28 September 2018

Activism in September

ESR and Centuria Capital battle for Propertylink ESR Real Estate has placed a $693 million cash takeover offer on the table for Propertylink.  This comes only a day after Centuria Capital requisitioned a meeting to replace all but one member of Propertylink’s board. Centuria Capital is seeking to prevent Propertylink from going through with a […]

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3 September 2018

Who, What & How Much? What FY19 Guidance is Telling Us

Dan Jones, Manager Shareholder Analytics During August we monitored all companies in the S&P/ASX300 Index that reported for the period ending 30 June 2018, building a picture of the approach to guidance in this market and what that guidance is telling us about outlook. Almost 250 companies within the S&P/ASX 300 index gave their results […]

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3 September 2018

Deal Flow – Retail Investors Have a Point of View

Victoria Geddes, Executive Director Post results reporting season is a time when investment banks start engaging their clients, in advance of the year’s end, to get mergers, spin-offs and takeovers off and running. Witness the recent TPG and Vodafone merger as well as the Coles spin-off from Wesfarmers. The merits of engaging in Proxy Solicitation […]

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31 August 2018

Activism in August

Aurora withdraws bid for takeover of Molopo After almost four years of trying to take control of Molopo, Aurora Funds Management has withdrawn its takeover bid.  Keybridge and Aurora have both separately been attempting to take over the company, however, the latest bid, which expired on the 10th of August, was withdrawn citing a ‘dramatic […]

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30 July 2018

Activism in July

MEC Resources unveils board changes Australia-based MEC Resources has unveiled a series of board changes, two weeks after surviving a proxy fight waged by a group of shareholders. Chairman Goh Hock was replaced by Michael Sandy, a former executive at Oil Search and Novus Petroleum with a background in geology. Hock will retain an advisory […]

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27 July 2018

LOOK TO YOUR GUIDANCE

Ben Rebbeck, Executive Director As we enter the 2018 results reporting season, earnings and operational guidance again becomes a topic of significant concern. Recently in the US, industry leaders including Warren Buffett and Jamie Dimon joined the debate arguing that public companies should reduce or eliminate the practice of estimating quarterly earnings (EPS), as this […]

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27 July 2018

ESG IS MAINSTREAM ON MAIN STREET

Ben Rebbeck, Executive Director Environmental, Social and Governance (ESG) factors were once the poor cousins of institutional investors’ metrics – nice to have, but not a primary driver of valuation or investment. This is no longer the case. Times have changed, investors are more sophisticated, information is more prevalent and reliable – ESG is now […]

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29 June 2018

A view from the other side of the fence

Daniel Jones, Shareholder Analytics and IR Activism was once again a hotly discussed topic at the 2018 National Investor Relations Institute (NIRI) conference in Las Vegas, and with the number of large-cap activist campaigns in 2017 reaching an all-time high, it’s easy to see why. Based on my observations and discussion with professionals, an often […]

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29 June 2018

Setting the standard – ‘Same-day reporting’ of the annual report at Full Year Results

Daniel Jones, Shareholder Analytics and IR FIRST Advisers highlighted a trend amongst ASX 300 companies towards publishing annual reports on the day they announce full year results, ‘Same-Day Reporting’, in early 2017.  We have updated this analysis in order to confirm if a new standard is emerging around best practice for publishing annual reports. For […]

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29 June 2018

ASIC Review of Proxy Adviser Engagement Practices

Victoria Geddes, Executive Director Following FIRST Adviser’s ‘Time to talk to Proxy Advisers’ post last month, ASIC has published its review of proxy adviser engagement practices. The Australian Securities and Investments Commission acted after business organisations complained some proxy firms are unwilling to engage, correct inaccuracies or give time for companies to clarify errors. ASIC’s […]

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29 June 2018

Activism in June

Empire activists seek a strategic review and new board A group of dissident shareholders in Empire Resources has outlined its plan for the company, saying it needed a new “energetic” executive managing director to complete a strategic review of the precious and base metals explorer. The dissidents, consisting of 12 shareholders, are seeking to replace […]

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30 May 2018

Activism in May

Myer v Premier Investments Solomon Lew is continuing his campaign against Myer, in which he holds 11% of stock, writing to fellow shareholders, saying that the company is ‘in peril’ and blaming the Board for its deterioration. The letter follows John King’s  appointment as CEO and MD In April. Among other things, Solomon Lew has […]

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29 May 2018

ASX to make purpose key to good governance

Giles Rafferty, Corporate Communications and Media Advisor The Financial Services Royal Commission is shining a light on governance failures at some of Australia’s largest businesses. It has also revealed a clear need to restore trust in Australian listed companies. The ASX Corporate Governance Council is seeking to address the trust deficit by updating the Principles and Recommendations […]

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29 May 2018

Time to Talk to Proxy Advisers

Victoria Geddes, Executive Director It seems a strange thing to put on the IR agenda, with AGM season still 5 months away for most Australian companies, but June and July are the months when companies are best placed to gain access to proxy advisors outside the peak months of proxy season (April, May, September, October, […]

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30 April 2018

Annual reports – bring it all together

Giles Rafferty, Corporate Communications and Media Adviser The world of investor relations is getting faster, busier and noisier. As soon as news hits the ASX announcements platform it is time to update the company website; amplify the news with tweets and social posts; push out the media release; set up interviews; live stream webcasts; monitor […]

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30 April 2018

Activism in April

8IP Emerging Companies vs Aurora Funds Management Resolutions put forward by Aurora Funds Management to appoint nominees Anthony Hartnell, John Patton and Victor Siciliano, were defeated at the 8IP Emerging Companies General Meeting, with more than 65% of shareholder supporting the current Board. Aurora, which owns just under 20% of 8EC, had put forward resolutions to […]

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30 April 2018

Mandatory Reporting of Data Breaches in Australia is Off and Running

Victoria Geddes, Executive Director, Writing for the Autumn 2018 Issue of Listed@ASX On February 22, 2018 the Federal Government’s new Scheme for the mandatory reporting of cybersecurity breaches that result in the loss of personal data came into effect. Every private and public company with annual turnover of $3 million or more, listed or not, is […]

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5 April 2018

Engaging Retail investors – work smarter not harder

It is generally accepted, at least in the Australian equity market, that Retail Investors play an important role in the construction of a balanced shareholder register. The characteristics that make them attractive are that they generally invest for the long term, are volatility averse and focus on a company’s fundamentals. However these traits can also […]

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5 April 2018

Activism in March

8IP Emerging Companies vs Aurora Funds Management. On 19 March, Aurora Funds Management sent a notice, requisitioning a general meeting of 8IP Emerging Companies (8EC), seeking reconstruction of the board and the implementation of a Buyback. Aurora owns nearly 20% of the company and is proposing the removal of three directors – Kerry Series, Jonathan […]

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5 April 2018

Short Attacks: Is Glaucus an Aberration or the new Normal?

VICTORIA GEDDES, EXECUTIVE DIRECTOR Two years ago we wrote an article on a well-established activist strategy in the US called the “short attack”. In Australia we are very familiar with short selling as a legitimate tactic to deliver portfolio performance but short or bear attacks are something else altogether. Equity markets and investors received their […]

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5 March 2018

Analysing Guidance – February 2018

Dan Jones, Shareholder Analytics and IR During February we monitored all companies in the S&P/ASX300 Index that reported for the period ending 31 December 2017, building a picture of the approach to guidance in this market and what that guidance is telling us about the outlook for FY2018. There were 214 companies within the S&P/ASX […]

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5 March 2018

Activism in February

Successful activism Tap Oil v Risco Energy Risco Energy nominees Chris Newton and Govert Van Eck have been appointed to the Board of Tap Oil while Tap Oil’s executive Chairman, James Menzies, and existing Directors Peter Mansell and Andrea Hall have resigned from their posts. As a result, the Special Meeting was cancelled. Genetic Technologies […]

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28 February 2018

Doing it on Purpose

Giles Rafferty, Corporate Communications Doing it on Purpose Having a Corporate Purpose must be one of the oldest, latest things. There is good degree of noise around the concept of ‘Corporate Purpose’ and it may feel like it has become a buzz word, but it is much more than that and always has been. A […]

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29 January 2018

Activism in December/January

Kingsgate Consolidated v Metal Tiger Metal Tiger, which owns 8.5% of Kingsgate Consolidated, requisitioned a General Meeting in November 2017, seeking to remove three directors and replace them with five of their own nominees. All resolutions were voted down by shareholders; however, there was support for Metal Tiger with 45% of investors voting in favour […]

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25 January 2018

Video: No longer a nice to have

Giles Rafferty, Corporate Communications Video is a critical part of the communication mix. Video engages an audience visually, aurally and emotionally. If a picture paints a thousand words, then a minute of video paints 1.5 million! There are some *mathematics that underpin this assertion but the point of such a statement is to focus attention […]

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25 January 2018

Investor Targeting vs Corporate Access

Victoria Geddes, Executive Director It’s that time of year when listed companies around Australia are gearing up for results reporting season – finalising accounts, booking conference calls and webcasts, updating their list of beneficial owners to ensure they have identified all key decision-makers and starting to work on the key messages they want to deliver. […]

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11 December 2017

Activism in November

Kingsgate Consolidated v Metal Tiger On November 15, 2017 Kingsgate Consolidated’s largest shareholder, London-based Metal Tiger, requisitioned a General Meeting to remove three of the four current Board members and replace them with five of their own nominees, including two independent directors. Metal Tiger plans to review litigation with the Thai Government and insurance companies […]

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8 December 2017

FIRST Advisers at AIRA 2017 Annual Conference & Best Practice Investor Relations Awards

FIRST Advisers was an event sponsor at the AIRA 2017 Annual Conference and Best Practice IR Awards held in Sydney in late November. FIRST Advisers contribution included moderating a Crisis management panel discussion on managing breaches to cybersecurity and sponsoring the Award for Best Investor Relations by a Company in the ASX “Mid-cap 100”. Opening […]

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7 December 2017

FIRST Advisers ranked the Number 1 Australian Proxy Solicitation firm

The FIRST Advisers’ Proxy Solicitation practice has taken a prime position in the 2017 Intermediary Awards, as the top ranked Australian Proxy firm and the 6th ranked globally. FIRST Advisers is the only Australian specialist in Activist campaigns to feature in the top 10 rankings, which are dominated by US and European firms, many of […]

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