At the beginning of his funds management career, Emmanuel “Manny” Pohl never dreamed that three decades later his contributions to the industry would receive recognition from Queen Elizabeth. Despite amassing an impressive list of accomplishments over the years, including building two multibillion-dollar businesses from the ground up, Pohl says that receiving the Order of Australia in June is at the top of his professional highlights reel.
The founder of one of Australia’s top-tier investment firms, ECP Asset Management (ECP), Pohl was among the elite recipients of this year’s Queen’s Honours List for Australia for his significant service to the finance sector and general community. While the process was nerve-racking, he describes the recognition as “an amazing accolade. It was a really wonderful moment for me and certainly not expected.”
Since immigrating to his adopted home of Australia in 1994, the native South African has made an undeniable mark on the industry. Employing a three-point strategy that Redefines Active Investing, ECP has skyrocketed over the past year into the country’s preeminent asset management firm. With $1.3 billion in funds currently under management, the company is guiding retail investors through a unique style that delivers long-term results outpacing the general market.
The Road to Excellence
Pohl began honing his skills as a financial investment whiz more than 30 years ago with a leading South African brokering firm followed by a large Australian investment house. During his time as a member of the South African Accounting Practices Board, he was appointed as a delegate to the annual meeting of the Board of Governors of the World Bank and the International Monetary Fund in Bangkok.
Along his impressive journey, Dr. Pohl has accumulated a string of credential letters behind his name, including DBA, BSc (Eng), MBA, FAICD, MSAFAA and F Fin. His engineering background gives him a methodical and disciplined approach to his role as a director, which he views primarily as a mentor position rather than a dictatorship. He has attained status as a Master Practitioner Member of the Stockbrokers and Financial Advisers Association and is a distinguished fellow of the Global Federation of Competitiveness Councils, Australian Institute of Company Directors and the Financial Services Institute of Australasia.
In 1994, he brought his expertise to Australia by joining forces with Wilson HTM. Two years later, he co-founded Hyperion Asset Management, which he guided into an award-winning fund management firm overseeing more than $5 billion in assets. Five years ago, he sold his stake to form EC Pohl & Co and, with his son, Jared they started the investment house ECP Asset Management. “It’s been a wonderful run. Australia has been really good to me,” says Pohl, who is energised about the future potential of his latest venture. “ECP is certainly firing on all cylinders.”
Redefining Active Investing
With corporate headquarters based in Bundall, Queensland, ECP has already raised $2.5 billion in committed funds. ECP operates as a holding company for four different entities: ECP Asset Management; Flagship Investments (ASX:FSI) for general Australian equities; Barrack St. Investments (ASX:BST) for non-traditional smaller mid-cap stocks; and Global Masters Fund Limited (ASX:GFL), which grants access to Warren Buffet’s high-status Berkshire Hathaway portfolio.
This time around, they consciously approached the investment strategy differently. “We coined the term ‘Redefining Active Investing’ because active investors have started to lose their way a bit, particularly if they come from a stock picking background like I do,” explains Pohl, who is dismayed that so many firms are scaling back forensic research. Rather than following the trend of rating stocks based on future performance, ECP looks at the results the management team has achieved and the tenure of the business. If they like the business model, then they start to look at the potential.
“We consider the performance over the past three to five years and then asses its potential. Then we have small, concentrated portfolios. We don’t bet on everything, but we certainly bet on the ones we like and ensure the alignment of interests within our team,” Pohl says. “We insist that all our guys put their money into the same stocks that we include in our clients’ portfolios so that there is total alignment of interests. That’s what I think creates a really successful fund management business.”
Tapping the Vision of Younger Teams
ECP is also bucking the tradition of having senior employees looking after client portfolios. In fact, tapping the vision of younger teams has become a breakout strategy in achieving outstanding results. Pohl cites their agile minds and ambition as well as their understanding of modern technology and what is going on in the world as tremendous assets. He also applauds their generational viewpoints on corporate governance and respecting the attitudes towards social and environmental issues.
“We pick a group of young men, get their buy-in into the process and what it delivers. It’s a very different approach, but the results speak for themselves,” he says, noting ECP’s top ranking among 64 asset management firms over the past year, according to research house data. Over the past five years, the company ranks sixth overall. His investment management strategy, which he has been perfecting since 1998, has delivered a long-term return of 12.5 percent in comparison to the general market’s 8 percent.
“This is an amazing feat thanks to the team around me. I’m really happy with the progress we’ve made. We’ve got a young team that is going to be around for 20 to 30 years working together. Over that period, they are going to be one of the pre-eminent firms in Australia,” he predicts.
By putting young teams within this framework and allowing them to follow the process, the company is also able to minimise the inherent key-man risks that plague asset consultants and research houses. Pohl has found that many of the typical workaround strategies, such as hiring people of different age groups and demographics, are not as effective. Developing a system and processes that everybody consistently follows is important, but you must hire the right people to follow your philosophy, he says. “That’s not to dictate the things you are going to invest in but rather teach an investment philosophy and allow the team to apply it to their knowledge of companies. If companies don’t live up to their testing, then they fall by the wayside.”
Investing in More Than Financial Returns
As a firm believer in taking personal responsibility for building strong communities, Pohl shares his expertise as a board member for various causes, major corporations and professional organisations. His passion for sports, arts and the environment drive his continual involvement with Bond University’s Rugby Club, Athelney Trust PLC, Flagship Investments Limited, Global Masters Limited and the Currumbin Wildlife Hospital Foundation.
This same commitment to community is a differentiating factor in ECP’s success, says Pohl, especially because it resonates so strongly with the younger workers, who are more global in their thinking. Each senior team member is expected to contribute their time to a non-profit organisation. “If it takes them away from the office for a couple of hours, that’s accepted. We insist that everybody is involved in the community in some way.”
Company-wide participation is also strong for a cooking event for the homeless, and 8 percent of annual profits are directed into the Pohl Foundation. “The younger people believe in this kind of approach, maybe a little more so than what the older generation does,” Pohl explains. “They are all keenly contributing in their own time, and the firm contributes with money as well.”
Looking forward to the future, Pohl wants his companies to “perform well and generate wealth for our clients. Clearly, we want to be recognised as one of the pre-eminent firms in Australia. That goes not only for investment performance but also the ethics of the business and how we conduct ourselves. Reputation comes from both of those things.”
In Pohl’s world, working with integrity is the most important factor. “I’ve always said that fund managers have nothing to offer people other than their reputation. We want to be seen as a firm that puts something back into the community. When we invest your money, you know that it’s going to be invested in a way that I’ve always referred to as ‘it’s better to sleep well than to eat well.’ We are very particular about businesses and investments and what we do in the community to make sure it really rings the right bells.”
Brisbane-based company Luina Bio, a drug development and contract manufacturing organisation serving the pharmaceutical, biotechnology and veterinary industries, has over 20 years’ experience in providing comprehensive manufacturing solutions for both biological and small molecule drugs.
Managing Director Les Tillack leads the company’s innovation and committed pursuit of this world-leading contract manufacturing. A bio-tech expert, Mr Tillack brings over two decades of experience, ensuring the organisation is able to continuously adapt to the changing needs of the industry. Mr Tillack spoke recently with The Australian Business Executive to discuss the two main types of drugs manufactured by Luina Bio, the issues and opportunities facing the biopharmaceutical industry, and the impressive recent growth that has seen the company expanding into new areas of development.
Contract manufacturing organisation
“What we do, in essence, is make biopharmaceutical drugs for use in human clinical trials,” Mr Tillack explains. “When drugs are being developed, they have to go through an extensive safety and efficacy testing process, which are called clinical trials.”
Luina Bio’s main function is to manufacture drugs for other companies that are intending to test their drugs in these trials. This is usually undertaken at the early phases of the trial, before a company establishes their own manufacturing arrangements.
“We manufacture two main types of drugs. We manufacture recombinant protein drugs – they are drugs where a custom protein has been designed to mimic various biological activities in the body. We take bacteria that have been genetically modified, to then express and produce those proteins.”
The second type of drug manufactured by the company is an exciting new class of drug in the microbiome space, an area concerned with the healthy flora of bacteria that people have inside and outside their bodies.
“The theory around microbiome is that various disease states are being caused by having an imbalance of unhealthy and healthy organisms. There’s been a lot of development happening now in manufacturing of live microbial biotherapeutics, which are essentially live bacteria, which are then used in these microbiome therapies.”
The company’s clients are generally drug development and pharmaceutical companies in the process of developing new products. This includes only a small number of Australian customers, with about 90-95% of work last year coming from overseas.
“They can be smaller companies that have taken a product that’s been developed at a university or research institute, which has been spun out into a development company, right through to multinational pharmaceutical companies that also have drugs in development that want to use the services of a contract manufacturer rather than their own facilities.”
Australia is also well positioned in the biopharmaceutical space.
“The reason a lot of people get interested in coming to Australia to work is the R&D tax incentive, which a lot of people overseas have heard of, and it’s why they’re interested in talking to Australia in the first place. They end up staying for other reasons.”
However, the country’s pharmaceutical space does have a positive global reputation. The regulatory system around manufacture of pharmaceutical products is particularly strong, and the work that comes out of Australia is well-recognised internationally.
The Luina Bio laboratory as they continue to grow and innovate the best medicine for the next generation through their own technique and passion to develop something that could contribute in Biopharmaceutical Industry
Fast-growing industry
Being one of the only companies of its kind operating out of Australia, Luina Bio doesn’t experience a lot of competition domestically. There is only one other contract manufacturer in the country, also located in Brisbane.
“[The company] is owned by a multinational corporation, Thermo Fisher, and they manufacture monoclonal antibody drugs from mammalian cell culture. We have a completely different service. We manufacture from bacterial and yeast fermentation.”
There are a number of other companies internationally that do the same work as Luina Bio, although the company has several unique selling points separating it from any direct competition, the primary one being its commitment to flexibility.
A company mantra of ‘how hard can it be?’ encourages this flexibility. Such an ethos can be seen in its work with microbiome products, most of which involve growing anaerobic organisms. These can be hard to grow, as they require no oxygen to be present during the entire manufacturing process.
About three years ago we were approached by a fairly large US drug development company, and we were asked if we could manufacture those products – could we grow anaerobic organisms under GMP? Our answer to that was, ‘well we’ve never done that before, but how hard can it be?’”
Within 48 hours, the company was discussing the idea with a senior member of the company at Luina Bio’s facility. It turned out the US firm had approached 39 other contract manufacturers around the world to do the work, none of which had been willing to try.
“The answer to the question was that it was actually very hard, but we persevered with it and have become now one of the world leaders in the space. We speak at a lot of the technical conferences, and we have technical expertise probably better than anybody else in the world in this space. We have a very high success rate, and we know that we’re doing very well in comparison to our competitors internationally.”
There is huge potential for growth in production of products from bacterial fermentation. The microbiome space is already offering exponential growth, but there are also significant opportunities in the recombinant protein space.
“The microbiome space is the next big thing in drug development. Everybody is rushing to get on the bandwagon with that one. We probably have about thirty discussions running at the moment with potential clients who are looking for manufacturing in that space.”
The growth in the recombinant protein space is also positive, with new technologies being developed which allow products to be manufactured using bacterial expression systems rather than mammalian expression systems, which result in a much lower cost of goods.
“I mentioned that we have very few customers from Australia,” Mr Tillack says. “It’s not because there aren’t potential products to be manufactured for Australian companies. The real issue is a lack of accessible capital for drug development companies, for our customers to take their product into clinical development. It’s very expensive.”
In other international areas, such as the US and Europe, capital seems to be much more free flowing, with companies being able to raise significant amounts of money to develop drugs and take them to trial.
“The microbiome product manufacturing space is actually very new. It’s really only existed in the last 3-5 years as even a concept, of taking live bacterial products into the pharmaceutical space. Regulators around the world are rushing to try and develop a regulatory system around those products, so that is leading to a fast-changing environment.”
With the regulatory rules in this space changing almost yearly, this presents a challenge in manufacturing and developing products for companies like Luina Bio, which must work hard to keep abreast of fast-changing regulations.
Beginning a new chapter
“We used to be a company called PharmaSynth, a wholly-owned subsidiary of a drug development company called Progen Pharmaceuticals. Just over three years ago an opportunity arose to buy the PharmaSynth company through a management buyout.”
This prompted a number of employees and other investors to buy PharmaSynth from its parent company, Progen. The result was a new independently held entity, which was later rebranded to become Luina Bio.
“We decided to rebrand and refocus the direction of the company, and we made the decision to change the name to Luina Bio. PharmaSynth was a little bit confusing, because it made it sound like we’re a synthetic chemistry company, rather than a biologics company.”
PharmaSynth came into existence in 2008, being a part of Progen beforehand. This particular group has therefore been performing contract manufacturing for about twenty-five years, with competing interests proving a barrier to any real success.
“Now that we have a complete mandate to chase the business, we’ve actually been very successful with it. Three and a half years ago, when we had the management buyout (MBO), we had twelve staff. Today we have 65 staff. We are currently recruiting and will be about 85 people in a couple of months from now, and we’re projecting that 2-3 years from now we’ll have 300-350.”
With this impressive growth in staff numbers, revenue has likewise been rising, increasing five-fold over the three years that Luina Bio has been in existence, and meaning the company is now significantly profitable.
Trade & Investment Queensland – Premier of Queensland’s Export Awards 2017, October 19, 2017: Brisbane Convention & Exhibition Centre, Brisbane, Queensland (QLD), Australia. Credit: Pat Brunet / Event Photos Australia
“In 2017, we won the Queensland Export Awards in the Health and Biotechnology category, and in 2018 we were a winner in the Westpac Top 200 Companies of Tomorrow. So things are going very well.”
When Luina Bio started three years ago, it was working out of a manufacturing facility purchased as part of the MBO with Progen. Since then the company has opened a new manufacturing facility in the local area, allowing it to perform process development work and to give additional development and storage space.
“The big new thing coming up for us is the development of a much larger manufacturing facility, to give us bigger capacity. The biggest challenge we face at the moment is the fact that the facility we have now is essentially sold out for more than twelve months.”
With there now being trouble fitting new customers into the facility, the company is looking to start construction on a newly designed and developed facility early next year, with manufacturing happening towards the latter part of 2020.
The future looks bright for Luina Bio, with rapid growth helping them become a significant player in the global biopharmaceutical space.
Think Childcare Limited (ASX:TNK) is emerging from the recent volatility of the early childcare sector as a premier brand in the Australian sector. At the helm of this success is Mathew Edwards, who serves as CEO and managing director of one of Australia’s leading early childcare networks.
Headquartered in Drummoyne, New South Wales, the company has grown from 12 initial centres to 80 facilities owned and managed that provide long-day care to children ages six weeks to six years. More than 1,500 educators work between 6 a.m. and 6 p.m., five days per week, delivering about a million days of learning and care each year.
Edwards brings a wealth of experience to the table. After operating a multisite retail group that he started from the boot of his car and grew into a publicly listed company, he moved on to managing a group of childcare centres in the early 2000s. Under the Think Childcare banner, his strategy is to acquire underperforming childcare centres, identified by a strict acquisition criteria. He then integrates them into the Think Childcare network. Consolidating marketing and compliance programmes relieves the administrative burden at the centre level, which optimises performance and increases occupancy to boost profitability.
After acquiring holdings from the failed ABC Learning Centres, Think Childcare launched its first listing on the Australian Securities Exchange (ASX:TNK) in 2014 with a plan to revitalise underperforming centres into strong trading groups. Edwards has successfully achieved his goal in just four years with the company building up $78 million in total assets and delivering an overall shareholder return of 19% compared to the ASX300 Accumulation Index of 11.9%, according to its latest annual report.
Banking on a Long-Term Investment in Childcare
“Think Childcare has grown up in full view of the public as a public company,” says Edwards, who is proud of how his company has weathered the sector’s strong headwinds. Less than two years ago, key operators in the industry, including Think Childcare, experienced a significant 25% drop in share prices due to oversaturation and stagnant enrollments. However, the future is looking brighter, reassuring Edwards that childcare is a smart long-term investment.
Driving steady sector growth during the past year are the recent regulatory reforms that now allow the government to heavily subsidise the cost of childcare. Currently, the funding provides families with up to 85% of $120 per day. With government payments being issued every Tuesday, the subsidy system now underpins Think Childcare’s revenue. Enrollments are also increasing as more affordable childcare options become accessible, prompting mothers and low-income families to return to the workforce.
Another boost to growth comes from the Australian Department of Education’s extension of Commonwealth preschool funding. The 2019-20 budget earmarks $453.1 million for the National Partnership on Universal Access to Early Childhood Education to ensure that 350,000 children engage in a quality preschool programme for 600 hours before starting full-time school.
During this industry downturn, Think Childcare pivoted. The company pledged a $3.1 million capital investment to significantly improve its quality of care offerings, elevate marketing efforts, streamline operations and strengthen human resources. One of the company’s most aggressive positions was acquiring the premium childcare brand, Nido Early School, in 2017 to transform how it delivers childcare.
Think Childcare provides the best childcare all over Australia
“It’s actually slightly more expensive to deliver that care, but being best in market ensures that you have a higher occupancy, and therefore, a higher profitability,” says Edwards, who anticipates all centres will be fully transitioned into the Nido model by the middle of next year.
Edwards believes that the earnings cutback this year, which was used to fund the new platform, is an essential part of delivering tomorrow’s growth. “We are making the decision to build a company for the long-term,” he explains. “We always operate on the premise that every decision we make is in the long-term interest of building a stable and predictable business. Obviously, we expect that to literally pay dividends for many years to come.”
Think Childcare is also shifting strategies in its target demographics by moving away from more affluent, higher-density areas to fill the void for high-quality care and education in the outer suburbs. Not only is this an untapped market, Edwards notes, but higher subsidies are typically paid to families living in these areas.
“The theory is that most families in the outer suburbs are aspirational,” Edwards says. “They have a desire for their children to have a better life than they had, so they are certainly seeking a higher-quality offering. We’re probably the first organisation to really focus on that quality piece.”
Implementing a Forward-Looking Growth Plan
Moving forward, Think Childcare expects its growth to stem from three key areas. A central approach is to expand its network of centres across Australia through acquisition. Edwards describes the company as a lease-hold operator working closely with various developers around the country. This ranges from small developers producing two or three centres each year to larger national developers.
“We have a very unique model where we develop childcare services with incubator partners and develop some services internally,” Edwards explains. “We manage those childcare services until they trade up to our bankable metrics, which is around 75% occupancy and at a certain profit level. We can acquire those centres off our incubator partners at four times earnings. We have minimal integration risk. As far as everyone is concerned, from day one, it’s a Think Childcare service under a Nido brand.”
The company has also started to enjoy some economies of scale, Edwards notes, as the operational and educational transformations come to a completion. “That will see us be able to operate at scale in the future. In hindsight, it’s probably something we should have done prelisting, but it’s something we are actively invested in now.”
Think Childcare operational and education transformation com to completion that they were able to operate at scale in the future
“Interestingly, we are the first listed childcare operator to actually invest a large amount of capital back into our existing businesses,” says Edwards, who revealed that Think Childcare is investing up to $7 million to upgrade all its centres to best in market status. He is banking on the integration of the Nido philosophy as being the company’s key differentiator in a fairly homogenous sector. Like most operators in the market, Think Childcare first launched as a typical run-of-the-mill childcare service, he admits. “It was honest, good childcare service, but there was no differentiator in terms of our service delivery. When you do that, you just get your share of the market. When everyone is at 70% occupancy, you are at 70% occupancy.”
He defines Nido-quality service as “an exceeding quality of care and education,” which he believes drives parents’ decisions in childcare. “We are certainly a place of education as opposed to just a place of care. The word care is a critical piece, but it’s a place of education,” he says. The Nido curriculum is play-based to inspire curiosity for learning and nurture a love for learning. The school readiness curriculum meets standard educational outcomes, but it is also focused on building resiliency.
“What families are looking for is to ensure that we help prepare a child for the rest of their life, that we allow them to be little, that we build resilience into a child’s makeup and we provide an environment full of love and caring,” Edwards says. “This ensures a child has a love of learning that carries them through the rest of their life.”
“It’s important for investors to understand that we are building something that is built to last,” he stresses. “We are steadfastly driven on building a robust business and always ensuring we’ve got a balance between operational risk and acceptable debt exposure. We certainly see the best years for the sector and for Think Childcare still ahead of us.”
As one of Australia’s most successful career vets, Rick Fenny has established a network of Western Australian metropolitan and regional vet clinics, using the Rick Fenny Group to build a diversified portfolio of businesses across the state and beyond.
Dr Fenny’s work is well known across Australia, and he has been widely recognised for his contributions. He was a finalist in both the 2018 and 2019 Western Australian of the Year Awards, growing a business empire while ensuring WA’s outback residents have access to quality veterinary services for their pets and livestock. Dr Fenny is a passionate advocate for West Australian tourism, owning a range of ventures in the state including the Maitraya Private Retreat and the award-winning Ocean Park Aquarium. Dr Fenny spoke with The Australian Business Executive about the various divisions that make up this family run business, the issues in WA’s regions still failing to get nationwide attention, and the legacy he intends to leave behind in the form of new TV show Desert Vet.
Family-run business
The Rick Fenny Group is a family run business working across several divisions throughout Australia, and owning a number of vet practices, pastoral stations, real estate and hospitality ventures in the form of travel and tourism services.
“We’re mostly vet practices,” Dr Fenny explains, “and they’ve really evolved rather than being planned. It happened in a haphazard way, starting in the Pilbara [region], where I started my first vet practice in 1975.”
Whilst moving around the country trying out new business endeavours, Dr Fenny continued opening vet practices, admitting that they have followed him around the many Australian regions he has found himself working and living in.
“I usually bought the property – that’s been one of the things I’ve done all the way along, always try to own the property. I built a vet hospital in Karratha in the late-seventies and then either started or took over other vet practices [in other regions].”
After being told by a client up north that in order to be an ‘A-Grade’ vet he would need to set up in the city, the next logical step was to do just that. This resulted in the establishment of a practice in Victoria Park, Perth in 1982, before a return to his roots.
“In the mid-eighties I decided I’d go back to my home town of Albany, in the south of Western Australia, where I’d grown up. I thought my kids were growing up a bit and I’d love them to have the same kind of childhood as I did in that beautiful part of the world.”
The move to Albany followed the same principle as previous moves, with Dr Fenny finding a well-located property in the middle of town to turn into a vet clinic. It was around this time he realised the benefits of running his various practices more remotely.
“I had one in Perth, one in Karratha, and I thought I know what to do here – we just find a way to run them at arm’s length. And it continued from then, and I really just indulged myself in doing what I wanted to do and building up vet practices at the same time.”
Dr Fenny admits this approach may not make the most sense business-wise, but it has served him well over the years. He has used this approach to branch out into other interests, building up a portfolio of pursuits stemming from his ongoing passions.
“Other interests followed me in the same way, and it’s evolved into having my love of the ocean and for everything marine. I bought into an aquarium in Shark Bay. My son Ed had just graduated in Marine Science, so he came and worked there about 12-13 years ago.”
Another key passion has been farming, which Dr Fenny has been involved in since his childhood. He has owned farms in Albany, and helped his youngest son Sam purchase and run a station in the Gascoyne area of Western Australia, which he still runs today.
Quality veterinary services
The establishment and growth of a network of vet clinics was the first chapter in Dr Fenny’s vast success, and the journey in developing the growth of the business provided a number of key business lessons that have permeated all the group’s enterprises.
“I put my trust in having young vets, who I empowered to run the businesses, to run my business,” Dr Fenny says. “We had a few things that were a little bit adventurous at the time. I gave them a percentage of the turnover right from the word go.”
As soon as Dr Fenny was happy that the people he was employing were competent and committed, he began to give them real ownership of the practice, stressing that the harder they worked the more money they would earn.
“Those that had a bit of a business head on their shoulders certainly grabbed that opportunity with both hands. That almost ensured they would be successful, because that person depended on the performance to make the practice turnover as much as possible, and be as viable as possible, and at the same time that helped me and gave me peace of mind.”
Much of the success of the group’s vet practices has come from the fact that regional areas have often been neglected, with a dearth of quality veterinary services meaning many places were crying out for the kind of practices Dr Fenny was starting up.
“WA’s become more and more city-centred, everyone thinks that everything is bigger and brighter in the city, and the regions have got neglected. Unfortunately, that trend’s continued. I think it’s a government thing as well as an attitude over here.”
This has led to a number of issues in the regional animal care industry across the state, with a significant amount of mining taking place and huge potential for tourism that has so far not been exploited in the same way as some of the eastern states, such as Queensland.
Dr. Rick Fenny is not just an average veterinarian. He is very passionate to what is he doing. Very dedicated not just to grow the business but more on giving a quality veterinary service.
“Farming is the other area that there’s a huge divide between the city and the country, and people generally in the city just don’t know what goes on. The big thing that they fail to realise is that farming generally is very difficult work, but you’ve also got to have all your ducks lined up. There’s about ten things you have to have in place.”
Farming success is hugely dependent on a number of factors, such as adequate rainfall, a market for the product, prices that are competitive but also high enough to make it worthwhile, having proper finance in place, and a labour source.
“When the mining boom was happening in WA, that had a dreadful effect on other businesses, and especially farming operations, because people could earn ridiculous money being a stop-and-go guy on a mine site, or a cleaner.”
There is also a big role for the government to play in a successful farming season. The process requires a government that is not only helpful to farmers and regional businesses, but one that doesn’t tie up proceedings with endless red tape.
“Politics is a huge one,” Dr Fenny says. “When the Gillard government just arbitrarily stopped live exports, we lost the live export trade overnight. There was just shocking political interference, and the repercussions are still there.”
Diversified portfolio
Having already diversified within the vet industry through a string of different practices, Dr Fenny was keen to further diversify by branching out into other industries and ventures based around his passions.
“With the tourism side of it, [we have] Ocean Park Aquarium in Shark Bay, and we’ve diversified in that business as well. Ocean Park is actually ten businesses in one. We’ve got the marine display, but we’ve also got a nice little café, a bookshop, we’ve got a bar there.”
The group also offers four-wheel drive tours around Shark Bay, and has just purchased a 40-foot boat from which it provides diving lessons and a marine safari, where visitors can experience the natural marine life up close.
“We’ve also purchased Maitraya,” Dr Fenny explains, “the most beautiful property in Australia I think, but it’s got all the elements. It’s not only a beautiful property, it has ocean frontage and about 650 acres of farmland and bushland and heathland.”
Over the years of diversification, Dr Fenny has learned a number of key business lessons to help his many ventures run smoothly, not least how to conduct business with a number of different partners across different industries.
“If you want to be in business, you’ve got to be ethical, you’ve got to be honest. Otherwise, people see right through you and you’re out the door. Any advice for any budding entrepreneur is to take that on board well and truly.”
In addition, Dr Fenny is not averse to taking risks, recognising this as a key business strategy. This involves having self-belief, trusting in your own ideas. Without taking risks, businesses can stagnate and growth can be hard to come by.
“Trust is the big one, I suppose. I do trust people, sometimes to my detriment, but I reckon I’ve got about a 99% pass mark by trusting people. 99% of people I’ve trusted have given that trust back, and returned it with interest.”
One of the hallmarks of Dr Fenny’s belief in business is in building networks and a strong support team. By gathering good people around you, people who know more than you about certain areas, the chance of having a successful business increases.
“It’s all about partnerships,” he says. “I’ve got some of my partnerships that go back forty or fifty years, and we’ve been helping each other all that time, and a lot of it’s done on a handshake, on trust. That’s the Aussie way to do it.”
Creating a legacy
Dr Fenny’s newest venture is one he describes as a being a culmination of his career, the path down which his interests and passions have led him. It is a new TV show, called Desert Vet, set in the desert of Western Australia with Dr Fenny as the lead character.
“It’s got all the elements of stuff that I’ve always done, and always loved,” he says. “It’s got vet practices, it’s got all sorts of animals and wildlife, it’s got beauty and the scenery of Western Australia, the regions. But most of all it’s got my family.”
Dr Fenny’s Marine Scientist son Ed and his daughter Louisa, who is a vet, are both involved in the project. It is just another way for the Fenny family business to expand and evolve, offering new ways of seeing life.
The happy and contented Dr. Rick Fenny as he continue creating his legacy, not just only for his family but for those people who believes in him.
“We’ve just finished filming for our new series, a four-episode series. We’re editing it at the moment. Before that we had a pilot, which was so successful that we were asked to do a series. It’s been sold to UK TV and also to Europe, and it’s going to be shown on Channel 9 later in the year, probably on prime time viewing on the main channel.”
The aim of the show is to highlight the beauty of Western Australia, giving tourism a boost and showing viewers how wonderful the region is to visit, with particular focus on the Shark Bay and Pilbara areas.
“There’s some spectacular scenery, swimming with wild sharks and tagging them, and flying over the desert country chasing camels. It really is lovely. I know it’s going to help WA, particularly the regions, because I’m a great supporter of the regions of the state, and they do need that little bit of help.”
Additionally, the show will be used as a vehicle for Mr Fenny to discuss important regional issues, particularly around farming and animal care, to highlight some of the problems in the state to the country as a whole.
Dr Fenny sees the show as a key part of the legacy he aims to leave behind for his family. His children and grandchildren are always in his thoughts, and leaving something both to remember him by and to continue work on is hugely important to him.
“I’ve got eight children and thirteen grandchildren, and I’ve already got two of the children involved with Desert Vet, but we’ve got potential for all the others to be involved too. It’s a huge life, a little bit like what Steve Irwin and his family did.”
As a businessman with a knack for finding success in unrelated industries, Dr Fenny really has the world at his feet in terms of where the Rick Fenny Group goes from here. It is no surprise to hear him excited about what the future might hold.
“I guess I’d like to diversify even more within what I’m doing,” he says. “The classic one is on our station [in the Gascoyne], there’s this beautiful, organic goat and sheep meat that’s grown from saltbush and other natural herbages, and we’d like to promote it as its own brand.”
Within a number of months, Dr Fenny also intends to release a series of books about his life, called Red Dog Vet. The first book will be released to coincide with the start of Desert Vet in order to further diversify Dr Fenny’s portfolio.
Dr Fenny admits that making money is not always that easy, but he is now committed to putting back everything he earns into the projects that are his passions, building even more worth into his professional legacy.
Multi-award winning family owned and operated touring company O’Shannessy’s Quality Tours has over 30 years’ experience of coach touring throughout Australia, operating luxury coaches that are custom built for the comfort of senior travellers.
The O’Shannessy family’s involvement in the bus and coach industry started back in 1967, when co-founder Laurie O’Shannessy established a school bus run in Victoria’s Wimmera region. Many years later, the family moved to the Mornington Peninsula and developed a coach tour company specialising in extended accommodated tours across Australia. The Australian Business Executive spoke recently with Managing Director Chris O’Shannessy, who took over the business in 1997, to discuss the company’s accidental beginnings, its numerous industry awards, and the multi-generational approach that promises to keep the business running for many more years.
Word-of-mouth expansion
“Laurie and Margaret, my dad and step-mum, had buses down on the Mornington Peninsula in the early eighties,” Mr O’Shannessy explains. “They were busy doing charter and school runs and so on, but they also had a passion for outback Australia.”
The couple often holidayed up in Alice Springs, in Central Australia, and enjoyed regaling family and friends with their experiences. The idea to expand the business into tours came from an extended friends and family trip to the area in the early-eighties.
“It started by accident really. The people that had travelled on that one-off tour told everyone about it, and due to demand and people finding out about this tour, Laurie and Margaret the next year did another two tours to the same area. The following year, still due to word of mouth, there was three tours, and the next year there was four tours, and so on.”
Those who had travelled on those first tours to Central Australia soon began requesting similar tours to other areas, and Laurie and Margaret were more than happy to oblige. Within a few years they had realised that the foundations of a sustainable business had been set.
“That’s when they decided they were going to have a real go at this, and create O’Shannessy’s Tours. Then they started to do their research and find more destinations to travel to, and set off in the car to travel around Australia to make up the itineraries, and then come home and market the material.”
Mr O’Shannessy grew up watching the development of his father and stepmother’s operation, giving him an excellent knowledge of the burgeoning business. When Laurie and Margaret retired in the late nineties, he was perfectly suited to taking over.
“When I was young, Dad also had buses. So I was always interested in the business, and in bus travel. By the time Laurie and Margaret had decided to start doing tours to Alice Springs, I was at the stage where I had just finished my schooling, so I was able to come along and drive the buses and learn the tours.”
The old bus of O’Shannessy’s. Shows that they have been in the business for quite long now and still continuing on giving great services.
Over the years, Laurie and Margaret began running less of the tours, giving Mr O’Shannessy the opportunity to run more himself, culminating in the co-founders reaching retirement. At this point, Mr O’Shannessy and his wife Bernadette, who was his girlfriend at the time, took over the business.
Award-winning service
“These days, our tours range from about four days in duration, right through to about twenty-five days,” Mr O’Shannessy says. “We offer tours all over Australia and also these days quite a few international tours.”
The variety of tours that the company now offers suits a large demographic, and they run throughout the year, with different tours put on to take advantage of the varying seasonal conditions across Australia. This has come about from a demographic that is more than happy to escape the winter weather and seek warmer areas.
“In the autumn and the spring, we’re in the southern parts of Australia, where we get the nice weather, and then of course in the winter, all of our tours are generally north of the Tropic of Capricorn, so up through Queensland and Western Australia.”
The company also offers some local ‘Christmas in July’ tours, but generally speaking tours run in the north during the winter months, heading south again in the spring. Offering around 100 tours a year, the company occupies the higher-end of the market.
“When it comes to the service we provide, it’s certainly high-end, and I’d say second to none. As far as our cost base, we’re probably medium, but what we try to do is keep the price affordable but also add amazing service.”
When it comes to great service, O’Shannessy’s Quality Tours is recognised as a major player in Australia, having been awarded the Australian Achiever Award for Excellence in Customer Services seven times, including for five consecutive years from 2003-2007.
“I think our customer service is a really important part of why people like to come with us. Our folks know that when our chauffeur picks them up from their home to start the tour, right through to when our chauffeur drops them home again after the tour, that everything is included throughout their time away, and that they’ll be really well looked after.”
Changing with the industry
Being a multi-generational family business, it’s fair to say the company has seen significant changes in the industry over the years since Laurie and Margaret O’Shannessy were running it. Mr O’Shannessy thinks most of the changes have been for the better.
“Back in those early days, a lot more of the places we would travel to, the roads were rough and unfilled, such as the road up to Alice Springs. As well as that, there were a lot less accommodation places around Australia. In fact, tourism in Australia was still quite young, there was a lot of Australia that hadn’t been explored by groups and so on by that stage.”
On top of these practical changes, Mr O’Shannessy recognises that the amount and level of competition has greatly increased since the tour company began. This means that O’Shannessy’s must now vary its tours to stay ahead of the game.
“The internet has bought about a wealth of information and choices for people. It’s very important for us to stay in touch with our customers, using both the internet and still the traditional printed material, to make sure that they can find us.”
The tourism industry in general is pretty steady, particularly in domestic touring, which has seen a lot of retired seniors travelling across the country. However, low-income rates have had an impact on discretionary spending, particularly for retired people.
The O’Shannessy’s Quality Tours on one of their trip, continuing giving excellent customer service and satisfaction.
“On the other hand, we have the baby boomers entering that age bracket now,” Mr O’Shannessy says, “which is also a benefit, and I think those people will be very eager to travel [domestically].”
Mr O’Shannessy believes there will always be a demand for domestic and overseas travel of the kind the company offers, especially in the retired senior market. But there will also be subtle changes to the specifics of how people like to experience their tours.
“One of the things we’ve noticed more recently is people tending to enjoy or prefer smaller group travel rather than the larger groups, so we’re now offering quite a lot of small group departures, with a maximum of only 20 people.”
This allows for a more intimate feeling amongst the group, allowing people still to enjoy the benefits of a group tour, but perhaps having a greater chance of getting to know more of the individuals with which they are experiencing the tour.
“Group travelling is a great way to make new friends, and of course they have the safety of group travel. It’s also great for single travellers as well, because they can still share the experience with other people and not be on their own.”
One thing’s for sure, O’Shannessy’s will continue to grow and offer great tours, most likely while keeping its successful multi-generational format. “Ultimately, I’d like to see some of my children continue in the business and take it forward in the long term,” Mr O’Shannessy concludes.
From humble beginnings as an independent building firm in Queensland, franchise builder G.J. Gardner Homes is now rated Australia’s No. 1 and Most Trusted National Home Building brand, focused on providing exceptional and trustworthy service to its customers.
Darren Wallis’ career with G.J. Gardner Homes began in 1994, as an accountant involved in the day-to-day running of the business, as well as assisting in the programming of the current franchise software program. In 1996 he became a director and partner of the franchising company, and was appointed MD of franchising in 2000. The franchising network now has more than 120 franchisees, and operates across Australia, New Zealand and the U.S. Talking to The Australian Business Executive, Mr Wallis discusses the firm’s decision to establish a franchise network, its commitment to gaining customer trust, and the exciting possibilities offered by its international footprint.
Pioneering franchise model
“G.J. Gardner Homes was founded by Greg Gardner back in 1983,” Mr Wallis says, “and it grew to six regional offices in southeast Queensland. Then in 1994, shortly after I joined the company, we made the decision to franchise the business.”
The opportunity to create a franchise business came about as a response to a local builder who was looking for a franchise to work with. The builder had recently approached the Housing Industry of Australia (HIA) in Brisbane for advice on how to grow his business.
“G.J. Gardner Homes was the largest builder in Queensland [at the time], and someone down there [at the HIA], we still don’t know who, said you need to buy a franchise off one of the large builders. I don’t even think franchising was in building at that point.”
This was a significant turning point for G.J. Gardner Homes. Considering a franchising approach to be potentially lucrative, the firm decided to turn its existing offices into franchise locations, with all bar one being sold to the Area Manager in charge of the office at the time.
Since then, the firm has been nationally recognised as Australia’s No. 1 and Most Trusted National Home Building Brand, in both 2016 and 2017, by consumer opinion website ProductReview.com.au, an award directly influenced by customer satisfaction levels.
“Part of [our success] is just the quality of the people we having working with us, our franchisees. We look for quality builders and people who fit our culture, and we can help them with the skills, resources and systems to grow their business.”
The franchise approach allows local builders to advertise under the trusted branding of G.J. Gardner Homes, but also to retain the same level of personalised customer service they are able to offer as a local builder.
“We made the choice several years ago to really focus on the customer. Back in the 2000s we were doing focus groups on customers, to find out what customers wanted, focusing on how we build the customer’s trust and how we build a better experience for the customer.”
Over the years the firm has steadily built up the kind of customer trust that has seen it build homes across generations of families – from grandparents, to parents, to children and grandchildren – indicating just how high customer satisfaction has become.
Maintaining excellent service
“It’s easy to get to number one,” Mr Wallis explains, “it’s a bit harder to stay there. As part of our culture with our franchisees, and part of our culture with our staff, we’re always talking about how we can better service the customer.”
The firm’s ability to stay true to its core values as other builders come and go has been a key part of retaining customer trust and continuing to be the best. Customers always know they will receive exceptional service.
“Maybe another builder can offer a cheaper product, but can they deliver and can they give the customer that experience that they want, and can they know that if they come back time and time again, they’re going to get looked after?”
Building customer trust through a franchise system is one thing, but G.J. Gardner Homes has had to take into consideration other factors such as design and style concepts in its quest to give customers a great product at affordable prices.
“We spend a lot of time and energy and money on developing the right sort of design and style,” Mr Wallis says. “We’ve got architects that continually stay at the front of the market, but you’ve got to be able to mould that into an affordable product as well.”
This means the firm must focus on implementing exceptional operations procedures, setting up an efficient buying structure with its suppliers, and working with trades to make sure that it can deliver the latest styles and concepts at affordable prices.
In order to further boost its profile, the firm has recently teamed up with Darren Palmer from award winning reality TV show The Block, working to put together cutting edge designs and interior designs for a number of its customers.
“We got someone within the industry who wanted to work with us, and we could work together to actually bring value. For not much extra cost, we’re bringing that extra design and look to the build for the customer.”
International footprint
While it is common for commercial builders to have an international footprint, it is not standard practice for residential builders to work across multiple countries. This gives G.J. Gardner Homes an added advantage over competitors.
“We’ve got offices throughout all the states of Australia, we’ve got about 26 offices in New Zealand, and a similar number in the USA. Our biggest growth market overseas at the moment is the USA, because we can obviously have a lot more offices over there.”
G.J. Gardner now has more than 120 franchisees, and operates across Australia, New Zealand and the U.S.
The company already operates in a number of states across the U.S., including Colorado, Texas, Indiana, California and Florida. It is also looking to shortly open another office in Oklahoma. The firm has also been present in New Zealand since 1996.
“We looked at the New Zealand market and we thought it was a little bit inefficient. So we thought we could help a couple of builders get established, but it really took off. We’ve got a great team over there, and have been the largest residential builder for several years.”
As an international house builder, the firm must be aware of the different expectations on builders not just in different areas in the country, but across the world, making sure it is able to adapt its style and processes to suit different projects.
“Someone building a house in Darwin is going to be totally different to someone building a house in Melbourne, or a house in Tasmania, or in our case, a house in Queenstown New Zealand or a house in Colorado, USA.”
This means architects and designers are required to be flexible, and it can be particularly difficult to remain cutting edge across a number of different housing styles. In reality, there is enough of a crossover of styles to make international building work.
“There’s still thousands of people buying new homes, and they’re looking for a company they can trust.”
“Recently, I remember, we took a lot of our more modern, inner city look housing, to Denver, Colorado, and they loved it. It’s quite unique for them over there, but by taking some stuff that we’re doing, inner city Australia became cutting edge for inner city Denver.”
Mr Wallis admits that the firm is in the fortunate position of having international influence, meaning it can take cutting edge designs from certain areas and introduce them to other parts of the world to further their appeal.
Negotiating the market
Since the final economic quarter of 2018, there have been numerous media reports of a downturn in the Australian housing market, with many homeowners heavily mortgaged. The effect this could have on G.J. Gardner’s business is not yet certain
“It could depend a little bit on what happens in the election coming up,” Mr Wallis says. “Depending on what the policies are. It could have an impact on driving up investment properties for a short period of time.”
In reality, a 10% drop in the market or similar is not likely to have a huge effect on a firm like G.J. Gardner Homes. It continues to be an industry leader, giving customers a great product, with customers continuing to search the firm out.
“There’s still thousands of people buying new homes, and they’re looking for a company they can trust. Often in those downturns, people turn back to companies that they trust. They’re not out there trying to get the cheapest price quickly.”
The reality is that during previous building downturns, the firm has actually increased its market share. This is due to customers being a little more careful about choosing which firm to work with, and looking primarily for trustworthiness.
G.J. Gardner homes has found its method of franchising to be both highly successful and effective, and the result has been a real positive for both building franchising and the construction industry as a whole.
“The fact that we do franchising in the construction industry is fairly unique,” Mr Wallis concludes. “We’re pretty much the founders of it. We just see it as a great model where we can give upcoming builders skills, resources and systems to help them grow their business.”
Novita Healthcare is a medical technology company listed on the ASX, focused on the development of innovative TALI technology through its subsidiary TALI Health, with the aim of becoming a leader in the assessment and treatment of childhood attention difficulties by pioneering digital solutions for children across the world.
Novita’s technology solutions are reshaping the global health and education sectors, providing software that can make an impact in early childhood and create significant socio-economic outcomes for both developed and developing economies. Novita’s Managing Director is Glenn Smith, an experienced CEO, entrepreneur and investor with success in growing customer-centric businesses that deliver global technology solutions. Mr Smith spoke with The Australian Business Executive about the company’s commitment to developing research-driven software, its growing line of exciting products, and the significant returns on offer for investors in a number of global markets.
Leveraging research and technology
“Novita Healthcare is a technology company,” Mr Smith explains, “and we’re driven by developing technology and commercialising that technology, so really productising software algorithms into applications.”
The company’s first line of products focusses on the early childhood sector, comprising of applications that are interventions and assessments for children with attention issues such as attention hyperactivity disorder and autism.
“We have taken research that has come out of a significant institution in Australia, Monash University in Victoria. That is a twenty-year research project that has really developed the basis of how we’ve built the algorithms and the software.”
This lengthy research has provided a solid platform, through proven scientific trials and peer reviewed published papers, to help Novita deliver real outcomes to children struggling with attention issues, particularly those between the ages of three to eight years.
“We deliver products that can be accessible to children, to parents, to teachers and healthcare professionals, that aren’t invasive and that compliment other interventions such as pharmaceuticals, or other types of clinical intervention, that can be used out of clinic and out of home as well.”
The company through which Novita is marketing these products is its subsidiary company, TALI Health Pty Ltd, a Melbourne-based firm made up of a team of neuroscientists, software engineers and games developers.
The TALI technology is focused on children in age ranges three to eight years. Prior to adolescence, until about the age of fourteen, the human brain develops at a rapid rate, making it the ideal stage to intervene on any potential issues.
The TALI Train application is in market now for children in Australia, having produced significant results in Singapore and Hong Kong
“Your neuroplasticity, or how pliable your brain is, is very significant at that stage. So it allows any type of intervention to potentially change the neural pathways. We have a non-drug intervention that is delivered through a game-based training program, that actually trains the brain and the research suggests changes the neural pathways to the child so that they learn better attention skills.”
Helping them develop skills in a more robust fashion, strengthening their core attention so they can build on the experience going forward.
Strengthening and assessing core attention
“We’re at a very exciting stage,” Mr Smith says. “Our first product is a product called TALI Train, and that is the intervention that is delivered through the application. It’s an intensive five-week intervention, and it can be used by children from 3 to 8 at home, with a healthcare professional or in a school setting.”
The TALI Train application is in market now for children in Australia, having produced significant results in Singapore and Hong Kong, where clients are already purchasing and using the application.
“We’re really looking to expand into other markets, such as North America, and we have activities underway right now for the global deployment of the TALI Train product into international markets.”
The five-week programme has been designed on the basis of trials and scientific evidence, with this age group representing the earliest time that proven results have been collected, but it is by no means the limit of the application’s scope.
“We are developing ongoing additions to TALI Train, where children can simply activate the application ongoing, and continue to use TALI to strengthen and maintain those attention gains, so that they can feel like they’re winning from this particular type of activity.”
Even more exciting in the long term is the ongoing work of the company’s Research & Development arm, which is working on a second product, to be launched later in 2019, called TALI Detect.
“That is a very quick, 15 to 20-minute screening assessment tool for every child on the planet, to see what type of inattention issues they might have. They can do that and then be helped either by a healthcare professional, educator or parent, and they may actually choose to then go onto the training programme, TALI Train.”
The real significance of TALI Detect is that it will be available to all children, at an early age, helping education and health departments globally to assess which children might be at risk and put early intervention into practice.
In order to successfully market the TALI technology, Novita has developed both a B2C and B2B strategy, designed to effectively transmit the message about the benefits of TALI Train and other products to the public.
“[With] the consumer strategy, we have taken the approach that parents should have access to these new digital interventions, so they can participate in their child’s outcome from these solutions. So we market using social channels that allow parents to feel like they’re part of a community, and that they can help their child from the get-go with their attention.”
The company’s B2B strategy is primarily focused on going direct to schools, but also involves plans to partner with organisations that have a foothold in education in different geographic areas, such as Asia and North America.
“We’re looking for them to help us co-market these products back out through their existing customers, and perhaps complimenting some of the other applications and software that they deliver out to schools and education districts in Asia and North America.”
In order to achieve this, the company has been building the internal capability to help train those organisations in how to seamlessly deliver the TALI software through a positive customer experience, and why it is so important to do so.
“We’re certainly squarely focused on delivering out our current product, TALI Train, so we can be the first to market and really get a foothold in the digital therapeutics early intervention space for these kinds of applications.”
Significant returns for investors
“About eighteen months ago I was recruited in as CEO of Novita Healthcare. My background is in taking technology, and building teams and companies, and scaling them globally, to deliver technology solutions, or products and services, to both consumers and businesses.”
The team has worked previously in such diverse sectors as healthcare, education, Internet of Things, Augmented Reality and more, successfully commercialising and building companies, both listed and private
“I’ve raised a significant amount of capital to do that,” Mr Smith explains, “and I’ve helped those companies build organisations that deliver those products and services to global audiences.”
One of Novita’s real strengths is a team of skilled individuals working within the organisation, from software development, to commercialisation and capital, and most importantly the core business of marketing the products and services.
“That runs from the top down. Our board is strong in terms of our ability to leverage the marketing and sales skills, and the scientific and law skills, of someone like Sue MacLeman, who’s Chair of Novita Healthcare.”
Ms MacLeman has over thirty years’ experience in the areas of biotechnology, medical technology and pharmaceuticals, and is also Chair of several other ASX and NASDAQ listed companies in Australia.
The rest of the board is made up of Jefferson Harcourt, an expert in commercialisation who leads a world-class team in his own business of commercialisation experts, and Mark Simari, who has more than twenty years’ experience in capital markets, mergers and acquisitions, and developing companies to scale.
“Those type of really key human assets at the board level have allowed us to bring in a whole lot of talented people in the operational area, that really will allow us to market this to key global audiences.”
For investors in parent company Novita, there is a substantial opportunity for significant returns. Running as a software development company, Novita develops particularly high-margin products and solutions.
“Because they’re high margin, and we’re global, we will have significant volumes, and the plan is that we have significant revenues from the sale of those applications. So, a very high margin business that will deliver profits.”
Additionally, by building socially conscious software and applications focused on improving the lives of children, the company offers individuals a social impact investment strategy for their portfolio, allowing them to be a part of a company that is reshaping the global intervention market for children with new technology solutions.
“This is a really global opportunity, and we have a great head start on our competitors. This is a world first in this space for 3 to 8 year olds, this type of intervention. That’s exciting for investors, and other people who partner with us, to realise that we can gain traction early on and make TALI and Novita Healthcare significant brands in global markets.”
SDI Plastics has spent nearly two decades perfecting the art of plastics injection moulding. Despite operating in an industry that has been around since 1872, the Brisbane company continues to innovate, producing award-winning designs for big ideas in plastics manufacturing and tool making. It is also involved in many R&D projects.
The family-operated company is born out of a true passion for manipulating raw materials into functional components. The Australian Business Executive recently connected with company Director Kulbir Dhanda to discuss how SDI Plastics successfully caters to a global clientele, survives revolutionary changes in the manufacturing industry and continues to push the boundaries on thought processes and practices.
Building a dedicated and active executive team
Since 1993, SDI Plastics has built its expertise in engineering high-quality plastic parts for a diverse array of clients, ranging from Tier 1 corporates to mom-and-pop inventors. While the bulk of the mouldings are used in the packaging, construction and industrial sectors, the company has projects currently running in the farming, medical, landscaping and automotive industries as well. SDI serves a partner to each client’s growth, guiding them through everything from design challenges to prototype development to international market launches.
Dhanda, who currently leads the company’s R&D efforts and oversees its strategic growth initiatives, was introduced to plastics as a child. The journey began with his father, who worked for Kodaks European injection moulding facility that introduced new products to the market. His expertise was honed on 17 types of injection moulding machines that produced more than 11 million parts per month for the European market.
Despite inheriting his father’s passion for plastics at a young age, Dhanda decided to pursue a degree in international business from Griffith University in Brisbane. He then polished his skillset in product sourcing, negotiations, management and export market planning in Australia’s telecommunications industry. Finally, in 2003, he came back to the family business and received formal training to become a qualified injection moulding technician.
The company boasts an impressive 186 years of combined experience in the industry, and no one is afraid to roll up their sleeves to get the job done. “From the top down, we can all run an injection moulding machine,” Dhanda says proudly. “We have a huge amount of knowledge when it comes to designing parts for injection moulding and tool making, so there are all sorts of problems that we resolve.”
When working with SDI Plastics, clients get to tap into the company’s global network of partners throughout Australia, China and Malaysia and its extensive knowledge of foreign contracts, cultural negotiations, supply chains, market testing and service delivery. “All the guesswork is removed,” explains Dhanda, who describes SDI Plastics as a complete OEM solution. “They really don’t have to worry about anything. Our clients can comfortably pick and choose which way they want to go.”
Diversifying is the key to surviving
Navigating the slump in Australian manufacturing, which was largely due to high labour costs and outsourcing, required creativity and an in-depth look at every facet of the company. “We survived by strategically pivoting various parts of our business, and we grew in areas that we never developed,” notes Dhanda, who believes companies are returning to Australia because of the higher level of service found here.
When working with SDI Plastics, clients get to tap into the company’s global network of partners throughout Australia, China and Malaysia and its extensive knowledge of foreign contracts
First, the company focused on strengthening its executive leadership, even if that meant making the difficult decisions to remove people who were not on board with moving in a new direction. In recent years, SDI Plastics has also cultivated blue ocean markets to build mutually beneficial global partnerships, has strengthened its investment in R&D programmes and fine-tuned production inefficiencies and automation.
“It was not one specific thing that helped us through that downturn in Australian manufacturing,” Dhanda says. “We really did pivot in many areas to change the way we do things to become a competitive company in Australia.”
Dhanda is also aware that his company will need to continue along the path of innovation so that it can stay ahead of an increasingly competitive crowd of companies that supply fantastic components. SDI Plastics spends extra time in the research and discovery phase, challenging operations at every stage.
“Our clients desire new methodologies to help them become more globally competitive in this market. Our thought process is there has to be a better way than the conventional method,” he explains. “There are numerous times where we’ve been able to successfully make a component run more efficiently by using better quality parts because we have a complete understanding of the whole process.”
Along with its R&D programmes, Dhanda believes resourcefulness, efficiency, service and a reputation for delivering results is what truly differentiates SDI Plastics from its peers. “We are a results-producing company. How we operate, our experience, our skillset is what sets us apart,” he shared. “We take personal pride in every relationship that we establish, and we really do take each project personally.”
An industry focus on environmental sustainability and new technology
Reaching $164 billion (AUD) in 2017, the plastic injection moulding industry is projected to generate nearly $327 billion by 2023. While rising demand in packaging, food and medical devices is driving global growth, Dhanda is most excited to explore collaborations with tech companies by capitalising on artificial intelligence and the Internet of Things (IoT). He also sees potential to diversify into exporting Australian products overseas thanks to the absence of a foreign exchange rate.
Dhanda is inspired by the industry’s growing embracement of a circular economy to reduce the amount of plastics thrown into the rubbish. Under this guiding principle, companies are finding new ways to recycle plastic components into the production process to incorporate them into other products. He notes that Australia will soon benefit from the big changes that are currently happening across Europe.
Along with its R&D programmes, Dhanda believes resourcefulness, efficiency, service and a reputation for delivering results is what truly differentiates SDI Plastics from its peers.
While he concedes that changing human behaviour regarding waste is difficult, particularly in Third World countries, there are some fantastic solutions emerging from industry collaborations. SDI Plastics is currently working on an R&D project that Dhanda expects will have a massive impact locally and globally if it comes to commercialisation.
Another trend trickling into Australia out of the European market is the use of metal 3D printing. This technology enables manufacturers to integrate metal components with plastic parts to provide reinforcement, rapid prototyping and low-volume manufacturing. During the past two years, SDI Plastics has emerged as a leader in this space with projects currently in development. “This is really going to change the industry in a big way,” Dhanda reveals.
“I see many areas where we are growing, and our R&D department is thriving,” Dhanda says. “It’s really exciting to see how that is going to come to fruition in the near future.”
The fastest company in South East Asia to reach a valuation of $1bn, giving it prestigious ‘unicorn’ status, Revolution Precrafted is a global supplier of prefabricated homes, pavilions, furniture, museums, retail pop-ups, glamping accommodations and office spaces, and the only branded prefab company in the world.
The genius behind Revolution is Founder and CEO Robbie Antonio, whose entrepreneurial stock has skyrocketed alongside the valuation of his company. At just 41 years of age, Mr Antonio is one of the most successful real estate developers in the world. In both 2017 and 2018, he was the youngest person to be named on Forbes’ ‘Philippines’ 50 Richest’ list, alongside his father, Jose, chairman of the family’s flagship firm Century Properties. In this exclusive interview with The Australian Business Executive, Mr Antonio explains the history behind the inception of the company, the unique benefits of prefabricated design, and the brand’s ever-expanding global footprint.
Democratising design
At the time of Revolution’s inception, Mr Antonio was no stranger to the world of property development. After school, he began his own company in New York, Antonio Development, which focused on developing super-luxury projects in the US. “When I was in New York,” Mr Antonio says, “I thought of creating something groundbreaking that would challenge the status quo. I wanted something different within the industry, and so I thought of branded prefabricated structures.” Having worked with brands such as Armani Casa, Missoni, Versace Home, and The Trump Organization, building branded condominiums in the Philippines, Mr Antonio recognised the unique business opportunity in branded residential developments.
The genius behind Revolution Precrafted Founder and CEO Robbie Antonio, one of the most successful real estate developers in the world
“We were clear with our mission from the very beginning – we wanted to democratise design, and we wanted to address some of the major pain points most customers have in buying homes.” In early 2017, the company completed a Series A funding round worth $15.4m, led by prolific Silicon Valley start-up accelerator 500 Startups, putting the company’s overall valuation at $256m. In October of the same year, Revolution was tipped over the $1 billion mark after a fresh round of funding led by K2 VC, a Singaporean venture capital firm and family strategic investment. Mr Antonio’s ambition to build a unicorn company had come to fruition in record time, a milestone achieved by harnessing a powerful network of cutting-edge technologies and cost-efficient production systems to create precrafted properties at reasonable prices.
Fast and cost-efficient service
The company’s USP is its ability to build homes at staggering speed, sometimes as fast as 2-3 months, which allows projects to be completed significantly faster and more efficiently than those involving traditional homes. “In terms of cost,” Mr Antonio explains, “we are able to lower down costs since we use prefabricated materials produced using advanced robotics. The faster turnaround also helps brings down cost for the buyers.” A big part of the company’s appeal comes from giving customers the opportunity to have a prefabricated home delivered directly to their doorstep. In today’s on-demand world, having an entire home delivered quickly and easily is a very attractive proposition.
“The first step is to identify the design you want. We then work out the payment structure and get a down payment. Once we reach a certain threshold of payment, then we start the fabrication process.” Once the project has reached this point, the fabricated materials are shipped to the target location and assembled with help from local contractors, ensuring that the structure is compliant with local codes and standards. In order to deliver on its promise of high-design and forward-thinking architecture, Revolution has brought together over 80 of the world’s preeminent architects, artists and designers, all working in harmony to deliver the company’s unique vision.
“After launching in December 2015,” Mr Antonio says, “we made a conscious effort to reach out to some of the biggest names in the world of architecture to show the people that it is possible to create branded homes with our value proposition.” Bringing together such an impressive mix of professionals was not an easy task, and could only be achieved through determination and hard work. Mr Antonio’s previous experience gave the company the edge in securing the services of the best in the business. “There were a lot of questions, but when we explained our mission, there was a lot of approval and support. After having the approval of some big names, there was even more support from the business, design, and architecture communities.”
Launched in December 2017, Revolution Precrafted’s first project was the ambitious $1.1 billion Batulao Artscapes in the Philippines, a space positioned as ‘The World’s First Livable Art Park’, and mirroring Mr Antonio’s passion for fashion, design, art and architecture. The park features museums and homes designed by some of the world’s most creative and influential architects, and designers such as Pritzker Prize winners Jean Nouvel, Christian de Portzamparc, Tange Associates and Philip Johnson Alan Ritchie Architects. In March of this year, the company launched a follow up project located in the Philippines’ Pampanga province, Revolution Flavorscapes, the world’s first and only livable food park. The company is expected to supply 15,000 homes for the park.
The park features a Museum of Candy, a Museum of Ice Cream, a chocolate gallery, and a microbrewery with beer garden. The company will also soon be unveiling work in Rizal project, which promises to offer another unique proposition to customers.
Global footprint
“We have always considered our company to be a global brand,” Mr Antonio explains, “with roots in the Philippines. Our operations, process and mindset are global, and the skills and the talent of our team are world-class.” In business for under three years, Revolution’s global footprint is already highly impressive. The company is present in 27 countries in Asia, Africa, the Middle East, Europe, South America, North and Central America, and the Caribbean. “We now have over $8.7 billion in total project revenues with our partners in the next 3-4 years. This translates to about 36,000 units we have to deliver in the next few years. We are, however, in the middle of an aggressive business roadshow to expand our client portfolio.”
“We have always considered our company to be a global brand,” Mr Antonio explains, “with roots in the Philippines. Our operations, process and mindset are global, and the skills and the talent of our team are world-class.”
This worldwide roadshow is intended to grow the business’ global presence significantly, the aim being to be present in 35 countries by the end of 2018, and reaching 85 to 100 by the end of the decade. Some progress has already been made in this area. A recent company statement announced that Revolution had signed a non-exclusive dealership agreement with African Tsaleach Private Ltd., a Zimbabwe-based investment firm, to begin manufacturing prefabricated medical pop-up structures on the continent. This move into Africa secured the company’s 25th global market, putting it well on the way to its yearly growth target. Equally important is identifying further markets inside the continents within which it already works.
In response to improved economic conditions in the Middle East, the company is seeking to further expand its portfolio to countries such as Lebanon, Turkey, Oman and Saudi Arabia, with the intention of creating at least 10,000 units in the next 4-5 years. The brand’s global appeal is particularly strong, but the company’s achievements in South East Asia greatly surpass those of others in the region, and there is clearly an element of pride in representing the Philippines so positively. “You can’t help but feel glad to represent your country in a highly competitive industry,” Mr Antonio goes on to explain. “We just hope to sustain our growth to make the country proud.”
The Revolution model is likely to have an impact on affordable housing throughout the world. In particular, there are opportunities in Australia and New Zealand, where there is already high-exposure to prefabricated homes. “We are confident that Australia and New Zealand would be welcome to our business model given the speed, efficiency and technology we are offering. Also, there is a big opportunity in the branded prefab niche, and we want to explore that opportunity.” The company’s move into this market has already begun, with Revolution recently announcing a deal for a new project, the Alibaba Lifestyle Village Resort, to be completed in the town of River Heads in Queensland, 18km south of the city of Hervey Bay.
A recent media release detailed a preliminary agreement with Lifestyle Village Trust No 2 for the supply of residential prefab building components in this upscale lifestyle village, making Australia the 26th international market the company has entered. The complex will be the first of its kind in Australia, and will cater to both short-stay and long-term residents. Revolution will be required to co-design and supply 53 single ‘dual-key’ residences, ranging from 2 to 4 bedrooms. Revolution’s rise looks set to continue for some time to come. Recent reports suggest that the company will consider raising a further $100m in a Series C funding round in 2019, something Mr Antonio has claimed is all part of the long-term game-plan. Whatever the future has in store, Robbie Antonio and Revolution Precrafted have already made a big splash in the PropTech world. This unicorn looks set to keep on riding, and who knows how far it will go to revolutionise the real estate industry.
Western Australia’s Activ Foundation has been supporting people living with intellectual and developmental disability for over 67 years, helping them enjoy full participation in communities and empowering them to pursue the life they choose.
CEO and Managing Director Danielle Newport joined Activ in 2011, serving in a variety of executive roles before becoming CEO. Currently serving on the national board of the National Disability Service, Ms Newport is passionate about supporting people living with disability and committed to improving the lives of Activ’s customers. Ms Newport spoke to The Australian Business Executive about the organisation’s courageous beginnings, how businesses and communities can help support people living with disability, and the benefits and potential of the government’s new National Disability Insurance Scheme.
Creating a better world
“Activ was founded in the early 1950s, here in Western Australia,” Ms Newport says, “by families who had children living with intellectual disability. They were quite exceptional people, who didn’t accept the status quo in the 1950s, and had the courage and vision to create a better world.” This fundamental belief in people continues to drive the company today, as it endeavours to support people living with disability to fully participate in their communities and pursue the life that they choose. “We have about 100 locations across WA, and we support approximately 2,000 people living with disability. We also support their families. So that’s a significant number of people, where we play a vital role in their lives.”
More than half of Activ’s customers are employed through the company’s Australian Disability Enterprise (ADE), which provides products and services to commercial clients throughout Western Australia. ADEs are organisations funded by the Department of Social Services and the NDIS, which offer a wide range of employment opportunities to approximately 20,000 people with moderate to severe disability across Australia. “We have 1,000 employees living with disability, and employment for people with disability is statistically significantly lower than for those without disability: 53% compared to 83%. I would like to encourage all businesses to think about how they can make their organisations better by including and supporting people living with disability.”
The understanding that diversity strengthens an organisation, driving better performance, is finally becoming widespread in the business world. Ms Newport is keen for every business in Australia to help improve inclusion for people living with disability.
Since joining the organisation in 2011, Ms Newport has seen a number of exciting projects that have made a real difference to the running of the organisation, not least her own appointment as Managing Director and CEO.
There has been a significant shift in attitude towards disability since the foundation was first formed, with the focus in recent decades being on the responsibility of communities in their treatment of people living with disability. “When we were founded, nearly 70 years ago, people probably thought about people living with disability in terms of how they could fit into our communities. What’s different now is that we think about how our communities can accommodate people living with a disability. We think about our communities being accessible and inclusive.” The sheer size and scope of Western Australia creates unique issues for organisations such as Activ, issues that don’t affect other states and territories across Australia and that the organisation works hard to combat.
“Being a resources-based economy,” Ms Newport says, “we have some real challenges with the cost of doing business in Western Australia, which isn’t always reflected in universal pricing across Australia.” Another significant issue is the number of remote communities in the state, many of which have struggled to receive any support, not just for those living with disability, but for all disadvantaged members of the community. “We also suffer with remoteness from Canberra. We’re a long way away from our decision makers. That adds to our cost of business, but it also makes it more difficult to build those really effective partnerships and relationships with government.”
More than half of Activ’s customers are employed through the company’s Australian Disability Enterprise (ADE), which provides products and services to commercial clients throughout Western Australia.
Leveraging choice for people living with disability
Since joining the organisation in 2011, Ms Newport has seen a number of exciting projects that have made a real difference to the running of the organisation, not least her own appointment as Managing Director and CEO. “In 2016, we celebrated 65 years of our organisation, and in that same year we celebrated our first female CEO, which is a milestone in an organisation that wants to be inclusive and accessible to everybody. I think it was an important step.” A year earlier, the organisation celebrated forty years of hosting Western Australia’s hugely popular Chevron City to Surf for Activ, the state’s oldest and most loved community fun run. The event takes place every year in five locations across WA, finishing with the famous hero event in Perth. But perhaps the most important development in recent times has been the introduction of the National Disability Insurance Scheme (NDIS), a government scheme designed to increase choice and control for people living with disability across Australia.
“In this year, we’ve had our first customers transitioning into the formal federal NDIS system, which is an enormous milestone for us. The NDIS is such a fundamental shift in the way we work, it’s really important that we celebrate entering that scheme.” Although the idea of giving more choice and control to those living with disability may seem natural to many people, historical systems were rigid and provider-focused, whereas now the focus is on participants and their goals. “Organisations have been block-funded by government [in the past], restricting the portability of funding, therefore decreasing choice and control. Under the NDIS, people living with disability and their families have greater choice over how, when and from whom they receive a service that fits their individual needs.” Many people who will be supported by the NDIS require a level of personal, intimate support through their funding, making it vitally important that the right people are chosen to provide these supports.
“What it means for us as an organisation is we go from two or three government customers to 2,000 individual customers. That’s an opportunity for us to review how we listen to our customers, how we make sure that they have choice in how we support them, and really establish a relationship of equals with our customers.” The scheme is designed to help people living with disability ensure they are receiving support from the right organisation for them. The NDIS will certainly present challenges, for organisations and customers, but once it becomes more settled, there are huge benefits on offer for both parties. “In the future, as people living with disability get used to having choices, we’ll be able to co-design programs with them, to involve the community more, and I’m sure there are opportunities for technology to really leverage choice for people living with disability.” In the long term, people living with disability will have access to informal supports within their communities, ensuring disability becomes a community-wide issue, not one that is limited to those living with disability and their families.
Ms Newport likens the issue to another that is close to heart, gender inequality. “Nobody expects gender inequality to be fixed by women,” she says. “They understand that men need to be part of the solution.” “I think the community needs to realise that the NDIS alone isn’t going to fix the problem. The problem is one that we all have to come together and fix, and that’s about our expectations and aspirations for people living with disability, but also our expectations and aspirations for our organisations and how accessible they are.” At a fundamental level this must include a collective realisation that the best possible outcome for people living with disability is one that both benefits and is supported by society as a whole. “18% of Australians live with disability,” Ms Newport concludes. “This is everyone’s issue. It’s not a minority issue; this is a mainstream population issue. If everybody got involved and worked towards better outcomes, I think we could achieve amazing things.”
Find out more about Activ Foundation by visiting www.activ.asn.au.
An independent not-for-profit organisation based in Western Australia, Advocare provides a range of services designed to assist seniors and their families and carers, and works across the state to raise public awareness and understanding of older people’s rights.
Diedre Timms is the organisation’s CEO, and has over 20 years’ executive level management and community development experience in the not-for-profit sector. She has managed programs and organisations in the areas of disability, women’s health, aboriginal health, aged care and community care, and international emergency response. Ms Timms spoke with The Australian Business Executive about the services offered by Advocare, the work undertaken to raise the organisation’s profile, and the need for the government to allocate adequate funding and resources to the aged care sector.
Protecting the rights of older people
“We’ve been around since 1996,” Ms Timms says, “and our mission is about protecting and promoting the rights of older people, and we provide a service across Western Australia. We are often answering questions about how seniors can access aged and community care.” The company provides advocacy, information and education for older people, their families, carers and the general community. The main purpose of advocacy is to provide support for older people to make their own choices, directed by the individual.
Developed in 1996 as a project within the division of Kinway of Anglicare Western Australia, Advocare grew from a need to support clients in residential aged care and community care. “There was some funding around to support older people, and sometimes these projects started in larger organisations which had the resources to establish a program. Funding was available through what was then called the Home & Community Care Program [HACC].” The HACC program has since transitioned into the Commonwealth Home Support Program (CHSP), an organisation from which Advocare still receives funding, and which is designed to help older people stay at home.
“We also provide systemic advocacy, so we are regularly reporting issues up to government on behalf of older people, and we’re now part of a very exciting national collaboration called OPAN, or the Older Persons Advocacy Network.” OPAN is made up of nine members, delivering services in all states and territories across Australia. Working collaboratively with colleagues across the country hugely benefits the development of Advocare’s services, enhancing the quality of advocacy for older people.
Education as well as support
“Our work is across WA, and in our last annual report for the recently finished financial year we had just under 8,000 calls to our organisation, and about 10% actually relate to elder abuse. We also staff the WA elder abuse helpline.” A large part of the organisation’s responsibility is to provide education to people through community outreach, residential facilities and community events, where it provides education sessions on rights, how to access services, and preventing elder abuse. “We provide extensive phone support,” Ms Timms adds, “and we travel to the regions as often as our funding permits, but we can’t visit every region every year. We try and build relationships with communities so they are confident to call us and know we’re here to help.”
Ms Timms admits that there still isn’t a huge awareness of Advocare as a brand or the services it offers. It is still a significant part of the organisation’s mission to inform people of the service. “I take every opportunity to talk about Advocare and the work we do. I’ve got six advocates and a staff of thirteen. We probably have about 28,000 visitors to our website [per year] where we also provide information. We try and reach as many people as possible.”
Education sessions are about building a word-of-mouth network, with the hope being that those who learn about the service for the first time will pass on that learning to others. When people do contact the organisation, it is for a variety of reasons.
Ms. Timms is relatively new to her role as CEO, having come on board in 2017, but her passion for social justice means she is grateful to have the chance to make a difference to people’s lives.
“A family member will ring up and say [someone] really needs some support at home but we don’t know where to start. The age care system is quite complex, and it’s not something that people invest a lot of energy into finding out about, until they actually need it.” Many people who make contact have reached crisis point, often making the whole experience more difficult and stressful. Advocare provides information about where to go and what support is available.
“That might be enough for some people. They’ll go away, they’ll know how to go about getting some support, but for some people they will ring us with some quite complicated situations, where they’re not actually getting the care that they need.” Advocare is equipped to help people with more complex issues, working with them so that they are aware of their rights and exactly what kind of service they should be expecting in their particular circumstances.
Working for social justice
Ms. Timms is relatively new to her role as CEO, having come on board in 2017, but her passion for social justice means she is grateful to have the chance to make a difference to people’s lives. “I’ve spent most of my working life supporting vulnerable people, and I see older people as some of the most vulnerable in our community. Older people really deserve a life of dignity. They’ve actually built the nation we now all enjoy.” The organisation’s strategy going forward is all about engagement, about making as many people as it can aware of its services and the rights of older people. The more older people it can reach, the more it will be able to support.
“Since I’ve been here, we’ve changed our education sessions. We don’t simply provide information, we actually work to really engage people and it’s those rich conversations that allow our advocates to really understand the issues facing older people.” The increased visibility of elder abuse in recent years is the most serious issue Advocare deals with. For Ms Timms, it is impossible to understand exactly why such terrible treatment of elders continues to take place.
“We’ve got these pockets of shocking abuse. The federal government has just announced a Royal Commission enquiring into aged care. My hope is that the commission will make recommendations to government on how to achieve a quality service for older people.” Such a service would require excellent resourcing and funding to be a success, to help organisations invest in staff and provide the necessary training, and to be able to select people with the compassion needed to work in the sector.
Life-expectancy is rising, and numbers of older people are set to keep growing. With an already difficult task of getting to the WA population to talk to everybody who needs help, Advocare will likely face bigger issues going forward. “We are constantly challenged by resources and having to make decisions about what is a priority for our service all the time. I think we’ll all be judged on how we treat older people, and to quote others: ‘the standard we walk past is the standard we accept.’” The fact that there is a large cohort in the country that requires care should not be news, people have known about this emerging issue for a long time. What needs to happen is government action to get adequate resources in place to support those in need.
“Those who can afford to pay for care will have to do so, so that those who don’t have the resources can actually get the care they need and really deserve. I don’t think it’s acceptable to have a waiting list of 105,000 people waiting for packages of care.” The recent introduction of the National Disability Insurance Scheme (NDIS) has been a game-changer in the not-for-profit sector, and Ms Timms believes the work it does in assisting people with disabilities is commendable. “It’s about a guarantee of support for those with a disability moving forward, so that means that if you have a disability and you get support under the NDIS, that is support for life, and that’s so important for people with a disability.”
The scheme has already faced challenges, however. The setup means that the government has control on setting service prices, and with prices being set so low it can be very difficult to deliver a quality service. “I think it’s going to take some time to get this right, and I sincerely hope there aren’t too many people who miss out or suffer along the way. For Advocare, it will mean that we won’t be supporting people with a disability. Our focus will shift to supporting older people.”
This is because funds that were traditionally allocated to Advocare have now been absorbed within the NDIS, and it will now be up to the individual state to provide funding for that sort of advocacy. “I’m pleased to say WA government have just announced they will provide some funding, but that funding will go to specialist disability support agencies, and Advocare will focus on providing support for older people.”
This focus on providing support will continue to revolve around spreading the word about Advocare’s services. The organisation’s dedicated helpline for elder abuse is 1300 724 679, and it can also be reached on 1800 655 566 for general enquiries.
Based in the town of Rockhampton, architectural firm BEAT Architects has earned a reputation for bringing the kind of architectural innovation and creativity usually associated with big-city architects to regional Queensland.
A specialist in residential, education, commercial, heritage, and medical projects, BEAT is a proudly regional firm employing experienced designers and architects to deliver high-quality for a reasonable fee. Managing Director Carl Brown spoke with The Australian Business Executive recently about the realities of being a regional architect, the benefit of having experience in a number of specialist segments, and the firm’s need to develop a new model in order to stay competitive and relevant in a changing industry.
Consistency and quality
In 1991, fresh from his architectural studies at Brisbane QUT, Mr Brown escaped the pressures of big city living by moving to Central Queensland, settling down in the more relaxed regional environment of Rockhampton. It was here he first established the company, which began as Carl Brown Architects. No matter where Mr Brown was based, there was little doubt architecture would be a big part of his life. His father was a quantity surveyor, his grandfather an architect. Add to the mix his own passion for fine art and photography, and it was always likely a career in architecture would blossom.
In the early days, the company ran with a staff of just three. Driven by the desire for creative and innovative design, the company expanded gradually over the years to match Mr Brown’s growing architectural ambition. In 2010, the company purchased another local architectural practice, Tropical Architects, which was merged to form BEAT Architects. With this acquisition, the company grew to become a 20-person practice, greatly increasing capacity and providing a new level of consistency and quality to its service offering.
“One of the services we’re pleased to be able to offer is consistency” Mr Brown says. “Most of our staff have been here 10 to 20 years, so returning clients will see a familiar face and a known service level, and that ensures a comfortable reassurance.” For some time, BEAT was the region’s largest architectural practice outside of Brisbane in terms of staffing. Since the GFC and economic changes in regional Queensland, BEAT has consolidated its office size to become more of a medium-sized practice.
Over the years the company has applied its passion for innovation and creativity to a number of high-profile projects in the area, Here is Rainbow Valley Childcare Centre in Gladstone, for which the BEAT architect won a state award
Specialist experience
“Where we differ from big city practices is we offer a broad range of experience in a number of areas. Specialist firms, which just do hospitals or education projects, wouldn’t survive here, because there’s not enough work regionally for just a specialist firm.” This means regional practices still need the experience to complete a range of specialist jobs, big and small. One of BEAT’s key strengths is having skilled know-how in a number of different industry segments, adding a level of flexibility that along with its innovative design makes a BEAT project all the more attractive. “We have a small team that focuses on education projects,” Mr Brown explains, “and another team that does mainly medical projects, and another specialising in heritage and commercial work.”
With all of BEAT’s architects having worked in big city practices in the past, in cities like Dublin, Brisbane and Sydney, the firm has amassed plenty of specialist experience, allowing it to offer innovative design in a variety of sectors. The primary growth corridor for regional architectural firms currently appears to be education, although the medical sector has also been growing significantly, with the work of regional firms becoming increasingly important on smaller medical projects.
These specialist sectors are a core part of BEAT’s business, although Mr Brown admits that certain sectors, such as local government, still have a tendency to look towards bigger city firms for larger projects, rather than the local economy. “There’s a misconception that the best services come from big cities,” he says. “It’s something we’ve identified and which needs to be addressed. By producing quality architecture incorporating innovative design, we are continually working to turn this misconception around.”
Quality design
A good architect offers quality design built on experience and creative talent. BEAT is made up of design specialists, and its staff work passionately to develop the skills needed to offer the best possible service. “We also offer our clients methods for saving money,” he says, “and make spaces more efficient, to reduce the footprint but not lose any of the functionality. Architects are known as very good lateral thinkers. How can we approach a solution differently, or more effectively?”
As well as saving space, a good architect ensures the design is easy to use and a joy to be in. Good architecture should be fun as well as functional. “We love hearing our clients’ feedback on the difference good design has made in their daily lives. A house can be more like resort living for very little difference in the build cost, simply with creative design.” For BEAT, being the best architectural firm it can be means employing senior, diversely experienced, qualified architects and designers, making it better equipped to take on a variety of projects at a high level. “A lot of the big city firms rely on less experienced students or overseas staffing to keep costs low. However, this means less experienced staff are providing the design documentation.”
The stunning redesign of the Yeppoon Town Hall, commissioned by the then Rockhampton Regional Council. The existing building was partly demolished, with the redesign aimed at achieving the feel of a facility found in a capital city.
At BEAT the focus is on architectural credentials, making sure clients know they are benefiting from the work of top-of-the-line professionals for a fee similar to those charged by larger firms, giving the company an edge over its big city competitors. “We also have a very broad range of experience, which actually adds to any client’s project, whether it’s related to that particular field or not. Bringing experience of a wide range of projects will benefit the client.”
BEAT prides itself on knowing the Central Queensland region incredibly well, having a good understanding of the climate and people, which often proves invaluable. “Importantly, we know the planners, the council and the political state of the town. This helps in achieving planning and building approvals quickly and with less problems.” Over the years the company has applied its passion for innovation and creativity to a number of high profile projects in the area, including the impressive Rainbow Valley Childcare Centre in Gladstone, for which it won a state award.
“We were asked to do an extension to their existing facility, for after school care. Our client desired a space that was engaging, artistic and creative – they wanted something that the kids and the students were excited to be in.” Another significant project was the stunning redesign of the Yeppoon Town Hall, commissioned by the then Rockhampton Regional Council. The existing building was partly demolished, with the redesign aimed at achieving the feel of a facility found in a capital city.
By thinking big, BEAT was able to bring this historic building into the 21st century. “The old hall was from the 60s, very tired. We designed a new state-of-the-art facility with a 300 seat auditorium, function rooms and offices, creating a building of remarkable appearance and functionality.”
A new future model
In the current economic climate, it is essential for companies to look ahead at what might be coming next. Mr Brown admits to often asking – where is the regional architectural profession and practice going in the future? “One of my concerns in the industry,” he says, “is we’ve noticed a growing trend, particularly with a lot of larger firms, to outsource architectural services and have drafting completed overseas.”
With firms sourcing a low cost workforce outside of Australia, it is becoming difficult for smaller regional firms to compete. It may be that the solution is to offer a more personalised, quality service, to cut office size, and to outsource work to experienced local contractors. This would mean that work is kept in Australia. BEAT recognises that in order to stay relevant there must be more focus on working from home or in smaller cooperative groups, without the need for a large office.
“My concern is that in the near future, medium-sized practices like ours won’t exist. They’ll either be the work-from-home architect, or they’ll be the very large firms in the city. We know a number of midsized, regional firms that are moving towards this model.” Mr Brown believes this issue has already created difficulty in operating a midsized practice, and that the trend of sourcing labour from overseas is going to continue. Firms need to adapt their work model to keep work in Australia and to stay competitive.
“In Australia, it appears that the public believe the best architectural services are those that cost the least,” Mr Brown concludes. “We are trying to encourage the community to look for quality services. Our focus is to provide a high-quality of service for a reasonable fee, and see Australians benefit. This is something I feel quite passionate about.”
After a fairy-tale 2017/18 season that saw the team finish 2nd in the table and achieve qualification for the 2018/19 AFC Champions League, the A-League’s Newcastle Jets are on a high, ready to shed the label of regional team and start thinking like a big club.
Jets CEO Lawrie McKinna has been involved in Australian football for over 30 years, as player, coach and administrator. He was the inaugural coach of the Central Coast Mariners in 2005, where he instilled a real sense of community at the club, and led the team to the A-League Premiership in the 2007/08 season. Mr McKinna’s popular local identity helped him establish a career in politics, where he served four terms as Mayor of Gosford City. Back in the A-League with the Newcastle Jets, Mr McKinna talks to The Australian Business Executive about his plans for improving the club long-term, the financial struggles faced by the A-League’s less prestigious clubs, and the team’s determination to start thinking big.
A fresh start
After a decade of varying success in the A-League, the start of the 2017/18 season was something of a fresh start for the Jets. Before the season began, Mr McKinna publicly outlined a number of changes he planned to make to the team. But the big change at the club had already happened. In June 2016, the club was bought by Martin Lee, who immediately appointed Mr McKinna as CEO. The planning for what would prove to be a season of resurgence began in earnest a year earlier.
“When we came in,” Mr McKinna explains, “the squad we had, we knew it wasn’t good enough. But 95% of the players were contracted, so we were basically stuck with them for another year.” The changes started with the removal of the coach, Scott Miller, who was replaced by local coach Mark Jones. Jones lasted for most of the 2016/17 season, but was removed from his position after the club ended with a second wooden spoon in three seasons.
“A lot of the process had already started [that season]. The next season we bought in an experienced coach, Ernie Merrick – Australia’s most experienced coach – and he walked in the dressing room and got that immediate respect that we needed.” With the club now moving into its third season since the ownership change, it is important to push on and keep up momentum. Preparations have started well, with the re-signing of many of its current players showing intent to remain consistent. “Too many times in the past, Newcastle Jets, and many other teams, after a successful year, have not renewed contracts and they lose most of their players, but we’re managing our player recruitment very well.”
Big club mentality
In order to achieve sustained success, Mr McKinna knows that the club must shed its historical identity as a regional club and begin thinking like a big team. Setting high professional standards means nothing if they aren’t being consistently met. “We got there [last season],” he says, “which was hard, but we need to maintain that now, because the fans want it, the owners want it, we want it as individuals. We’ve got goals ourselves that we want to achieve for our own personal satisfaction.” With a distinct lack of depth in terms of playing staff in the A-League compared to leagues around the world, clubs qualifying for the Champions League – particularly smaller teams like the Jets – often struggle to cope with the extra playing demands.
“It’s a horrendous schedule,” Mr McKinna says, “and at that time of year a lot of teams do drop off, because they’re trying to juggle a 23-man squad. You are allowed to sign extra players for the CL, but obviously you need more budget to sign more players.” To counter this, the club has extended the salary cap to try and acquire enough players to cope with demands. But even with more players, the risk of injuries is always there, which can easily disrupt a squad. “We’ve actually expanded our medical [team]. We’ve now got two full-time physios, so we’re starting to look at that – preparation, recovery. It’s very, very important. The sports science side of things comes in there to help us manage players and the loads and the travel.”
In order to achieve sustained success, Mr McKinna knows that the club must shed its historical identity as a regional club and begin thinking like a big team.
In addition to on-field performances, the club is emerging from almost a decade of poor ownership and bad decision making, which has had a negative impact on its relationship with the community. Things are starting to look up, with membership and attendance rising. “We’re about fifth or sixth in the table for members. Last year we averaged 11-12k people, which would be in the top half as well. We do very well, I think, in crowds, and I think we can get better.”
Well-known for his community-minded approach when he was head coach of the Central Coast Mariners, Mr McKinna sees great value in imbuing the same sense of regional pride in his current crop of players. “You have to go back to basics, back to working with the community, get back to being respectful to everybody you speak to, and get the players out there in the community. Over the last two years [everybody at the club] has done an outstanding job.”
The future of football in Australia
Despite its global appeal, football in Australia is still living in the shadow of other codes and sports. Mr McKinna admits the A-League’s relative youth makes it much more difficult to compete with long-standing Aussie brands such as the NRL and AFL. “Participation-wise, we’ve got more numbers than all the codes,” Mr McKinna says. “We need to engage more kids, that’s the clubs’ jobs to infiltrate grassroots football. We play during the summer, so we’re up against cricket. We struggle for airtime.”
Even though the A-League pulls in the 14th highest football crowds in the world, it will always struggle to compete with the huge numbers of Australians who pay to watch the AFL and NRL every week. “We’re a long way behind the AFL and rugby league. But, you look at the J-League, the American MLS – when these guys started, they had that steady growth and then they dropped off, and then they came again.”
There was a sense of excitement a few years ago when the FFA announced new rights for free-to-air TV, with A-League clubs hoping to see an increase in revenue. With the arrival of cricket’s Big Bash League however, the prime viewing spots didn’t materialize. “The TV deal was locked-in for six years, and the clubs weren’t happy with it. Because most of the clubs lose money in the A-League, they were looking to bridge that gap between breaking even. They weren’t happy with what the FFA did with the rights.”
There was a sense of excitement a few years ago when the FFA announced new rights for free-to-air TV, with A-League clubs hoping to see an increase in revenue.
Mr McKinna admits that in order to get the best TV spots, the league needs to do more to attract fans. The way the Big Bash is run makes it more of a spectacle, and football must do everything it can to offer fans an exciting alternative without losing the spirit of the game. It’s clear the financial element of the sport needs improvement. Apart from Melbourne Victory, all the clubs are consistently in the red. A large part of the revenue clubs can control still comes from getting sponsors on board, which is always tough for regional teams. “It’s still not easy to get [big sponsors],” Mr McKinna says. “We’ve increased the sponsorship again this year from last year, and we’ve still got a long, long way to go to even get near what the big city clubs are getting, but we’re going in the right direction.”
To address the ongoing issue of how revenue can be increased, clubs have set up an organisation, the Australian Professional Football Clubs Association (APFCA). Much of the call for more money revolves around the league becoming self-sufficient. “They’ve been lobbying the FFA that they want change. They want an independent league – they want the A-League to break away from the FFA. It doesn’t mean to run independently – it’ll be like the English FA and the English Premier League.” The APFCA hopes to see this change happen in the next couple of years, and believes it will help A-League clubs start generating more revenue. At the moment clubs run on a grant from the FFA, which most feel should be bigger.
The recent dispute between clubs and the league’s governing body, the FFA, is beginning to reach breaking point. Recently FIFA came in to try and have some influence at the negotiating table, but there is currently no resolution in sight. “The next two months is a really important time for football in Australia,” Mr McKinna says. “Hopefully it’s the best outcome for football, and the professional game, and for the women’s game and grassroots football, that everybody’s represented at the table.” There is a chance, if the A-League breaks away from the FFA, that the league’s salary cap will be removed, creating the potential for financial inequality to infiltrate the league as it has done in so many other leagues across the world.
“The bigger clubs will spend more money, and the smaller clubs will spend what they’re spending [now], or what they can afford. On paper, you would say the gap’s going to get bigger. It just means the smaller clubs have to recruit and manage player development.” Whatever the hurdles the club may face in the future, Mr McKinna is determined that the Jets start cultivating a big club mentality and begin to enjoy a period of resurgence that has promised to bring sustained success back to Newcastle.
“We want to be the best professional sporting club in Australia,” he says, “on and off the field. It doesn’t mean we have to win every week. It means we have to be competitive, and we have to be respectful, and while I’m at the club, I’ll make sure we do that.”
Melbourne-based boutique design and construct residential builder Zuccala Homes has been a family-run business for over sixty years, priding itself on offering a flexible approach to building that values the process just as highly as the product.
Greg Zuccala is a registered builder and Director of Zuccala Homes. Mr Zuccala’s 35-year experience in the residential construction industry has included several years being actively involved with the Master Builders Association of Victoria, where he was President from 2012 to 2014. The Australian Business Executive spoke with Mr Zuccala recently to get his thoughts on the company’s difference to other developers on the market, his work with a number of national and regional bodies, and Zuccala’s commitment to offering a flexible design and build process to make sure customers’ unique needs are met.
Offering more flexibility
“My dad Vic started the business in 1957,” Mr Zuccala explains. “Shortly after he finished his apprenticeship as a carpenter, he strapped on his nail bag and went out and started building spec homes in metropolitan Melbourne.” This kind of building involves buying a block of land, designing and building a home to go on that land, and then proceeding to sell it. After a few years of building homes this way, the family’s burgeoning business began to change direction. “We started to build display homes in greenfield estates around residential Melbourne, and started to build house and land packages, whereby a customer would buy a block of land, or we would source one for them, and we would design a home on there for them.”
Today, the company views itself as more of a niche builder that provides customers with more flexibility than the average builder, allowing them to choose, modify or create a design from scratch, and giving each project a unique quality. “I’m pretty confident in saying not one of our homes is exactly the same as another,” Mr Zuccala says, “because each of our customers puts their own stamp on it, and we’re happy to allow them that flexibility.”
Zuccala Homes has been well recognised by the major industry bodies over the years, and has utilised its prominent position to become more involved with shaping the industry and helping it run more productively.
For Zuccala Homes, it is vital not just for the product to meet customer requirements, but for the process that the customer goes through to be one that allows them to get the very best quality and value for their money. “The customer has the flexibility to design that home to suit their needs, and be given the opportunity to choose the appropriate specifications to go in that home, and be aware of the appropriate specifications to go in that home.”
Equally important is that during the construction and administration parts of the process – from design through to contract, and from the build to the handover of the home – the company communicates regularly with customers to make sure they are always happy. “They have the ability or the opportunity to call us at any time and have a relationship with someone in our office, and also directly with their construction manager onsite. It’s important that we respect people’s requirement to ask questions.”
An element of the company’s ability to offer such flexibility comes from its relatively compact geographical footprint, which remains restricted to metropolitan Melbourne, and doesn’t stretch into regional Victoria. “We don’t have a large build area. We don’t do a big volume of homes. Our volume in the last few years has decreased, although our turnover’s probably increased. So that reflects the difference in the type of home that we’re designing and building now.” The company’s clientele has also changed a little in the last few years, with a shift from first-time buyer or affordable housing to more customised building of mostly larger homes that represent better value for money.
“People are requiring a lot more of their own input,” Mr Zuccala explains, “and special appliances, and special features, in their homes, and we’re doing a lot more of that than we’ve done previously.”
Today, the company views itself as more of a niche builder that provides customers with more flexibility than the average builder, allowing them to choose, modify or create a design from scratch, and giving each project a unique quality.
Working with industry bodies
Having been involved with industry groups in the sector for many years, Mr Zuccala has plenty of insight and experience into how the industry runs. His recent appointment on the Building Appeals Board in Victoria gives him further opportunity to make a difference. The board is a tribunal, similar to the Victorian Civil & Administrative Tribunal (VCAT), but with a much narrower jurisdiction, dealing with building regulations, applications for modifications to building regulations, and appeals regarding building notices. “It’s run by the state government, and is composed of a number of industry professionals, such as myself, who run their own businesses. They are people like building surveyors, lawyers, engineers, planners and builders.”
Issues dealt with by the board tend to be building regulations that need to be changed by a builder or owner to suit their circumstances, a process which is allowed to happen if the Building Appeals Board finds it to be a fair and reasonable request. “One of the more topical things that comes across the board is the current fire cladding issue that’s on foot throughout the industry, and less recently there was the famous Corkman pub demolition.” The issue surrounding fire cladding started in Victoria a few years ago, when a high-rise residential block caught on fire. There followed an investigation into whether or not the exterior cladding was complaint with fire safety regulations.
“That’s an issue that’s being worked through by the state government, and the technical side of that is being heard from time-to-time through the Building Appeals Board. That affects not only Victoria, but also all the other states.” The Corkman Irish was a pub in Melbourne demolished by developers without a permit. The outcome was that the planning minister and the building surveyor issued orders for the developers to rebuild the property, as well as administering significant fines. “Those developers, under the Building Act, have the opportunity to appeal that decision at the Building Appeals Board,” Mr Zuccala explains. “So that was one of the things that they did.” Mr Zuccala’s role on the board sees him regularly joining a panel of other board members and hearing cases like these. Although the board sits biweekly, his involvement is closer to every 2-3 weeks, depending on the kind of cases that arise.
Zuccala Homes has been well recognised by the major industry bodies over the years, and has utilised its prominent position to become more involved with shaping the industry and helping it run more productively. “In the past we’ve won some awards at the Master Builders Association Housing Awards, and Housing Industry Association, but in recent times we haven’t applied so much for those. We’ve been focusing more on our participation in industry bodies.” In particular, Mr Zuccala’s work with the Master Builders Association of Victoria, including the national board of Master Builders Australia, and the Building Appeals Board, have been useful in helping the company attract new business.
“Rather than our products doing the talking for us, we’re focusing on our reputation in the industry, who we are and what we do for the industry and our experience in the industry. A lot of our business these days comes from referrals.”
Keeping pace with bigger firms
Interest rates are finally starting to rise a little in Australia, but Mr Zuccala believes they aren’t high enough yet to have any real impact on the industry. A more relevant issue is the lending behaviour of banks due to increased scrutiny of their practices. “What has affected the industry I think is the availability of finance, or the banks’ lending practices or criteria. That’s been tightening. That’s had already a significant effect on the industry in terms of the amount of credit that’s available out there.” Mr Zuccala admits that the company is able to avoid this issue a little, due in the most part to its customers being less concerned with affordability, many of them being second or third home buyers with equity in existing properties.
“The industry’s becoming more and more competitive. The bigger players, the volume builders in the market, are becoming more and more flexible these days. They’re building different sorts of products. They have big marketing budgets.” For smaller building firms, it has become vital to differentiate what is being offered in the market, to offer customers a value proposition. For Zuccala Homes, this means focusing on delivering a great process as well as product. “Who we are and how we do it is equally important as what we do. So we’re focused on our process, on communication and customer service, rather than just product alone. I think that’s an enduring point of difference that will see the smaller builder through.”
Zuccala’s real strength however is its longevity in the business, where it has amassed significant experience over more than sixty years in the industry, experience that is bound to see it continue delivering excellent service well into the future.
Member-owned bank, QBANK, has financially assisted the police, fire, emergency services and other public services in Queensland for over fifty years, recently rebranding from a Credit Union to a bank to ensure it remains relevant long into the future.
Mike Currie is CEO of QBANK, having previously filled the role of Chief Operating Officer. His 35-year career in the financial services sector has included national Executive Management roles with CBA, Lloyds International and Heritage Bank. Mr Currie spoke recently with The Australian Business Executive about QBANK’s successful recent rebranding, the issues facing the banking industry today, and the exciting opportunities for the bank to grow its relationship with its special member base.
A long and proud history
“QBANK started out in 1964,” Mr Currie says. “It was started by Queensland Police as a credit union for their own employees. It grew from that start to become the member-owned bank for Queensland government employees.” The bank still specialises in serving the state’s first responder community, and is still member-owned, staying true to its original mission of looking after the well-being of police, fire, emergency services, nursing, ambulance and public sector employees in Queensland.
Previously known as QPCU, in 2016 the organisation decided to rebrand, moving from its traditional branding as a Credit Union to market itself as a bank. Mr Currie explains that this was a strategic move to help the organisation move forward. “It was really about remaining strong and relevant into the future. We felt it was necessary to have a brand that would continue to resonate with and attract younger customers, and we felt that changing [to a bank] would help with that.” The most important element of this rebranding was making sure both existing and potential customers understood that there would be no change in the company’s mission to deliver exceptional financial service to first responders.
“We compete in the retail banking space in Queensland, which is occupied by all the major banks, two of the largest regionals in Suncorp and BOQ, two of the largest customer-owned banks in Australia and a plethora of others. There’s no shortage of competition.” As with all banks, value will always be a major decision point for customers, and QBANK always looks to ensure it offers the best value to customers. Mr Currie also believes, however, that choosing the right bank is about more than just price. “Our mission [is] to provide exceptional service and deliver financial wellbeing to our very special customer segment. These are women and men who serve the community, and we work tirelessly to support them by understanding their needs.”
Member-owned bank, QBANK, has financially assisted the police, fire, emergency services and other public services in Queensland for over fifty years
QBANK makes it a priority to support the community in the areas that matter most to its members, whether that be through sponsorship or other means, and the delivery of financial education directly into the workplace. “We have a heavy investment program over the next three years in people, process and technology. QBANK has an integral part in the first responder and government employee community, and we’ll continue to do everything we can to be their bank of choice.”
Challenging industry conditions
The banking industry is in the middle of a turbulent period, with the banking Royal Commission taking centre stage and bringing to light a level of declining standards that are undoubtedly having an effect on consumer confidence. “[The Royal Commission has] also highlighted the need for banks to work harder to regain the trust of the consumers. One of the unintended consequences has been a tightening of credit standards in some of the larger banks.” This has resulted in some cases to reduced consumer borrowing power, meaning a contraction in the credit market and decline in house prices, something QBANK is constantly keeping an eye on. “We’re in an ongoing low interest rate environment.
The RBA cash rate has been at historic lows for a couple of years, and that environment’s likely to be with us for a while. We’re all having to become more efficient with the way we deliver our services.” The record period of sustained economic growth in Australia over the last few years is set to continue, with financial regulators active in working to prevent consumers overstretching, which should be enough to hold the economy in good stead going forward.
QBANK makes it a priority to support the community in the areas that matter most to its members, whether that be through sponsorship or other means, and the delivery of financial education directly into the workplace.
“All the indicators would point to the cash rate staying where it is. We have seen banks move home loan rates independent of that cash rate because of wholesale funding cost factors, but there are indications that pressure is starting to ease a little bit.”
100% committed to first responders
“I was appointed CEO in March 2017,” Mr Currie says. “I came into the organisation in January 2016 as the COO, and that was really about helping to pilot the rebrand and the transition into a bank.” Prior to joining QBANK, Mr Currie held executive roles in other banks, amassing significant experience in the transformation and rebranding of Heritage Bank. As CEO, he is focused on the strategy of continuing to serve the bank’s member base.
“Making the customer the centre of everything you do remains key to succeeding in business. Consumers have an enormous amount of choice, and you have to make your offering compelling enough to make them choose you.” Mr Currie recognises that, just as important as the organisation remaining relevant is for individuals to continually work on their own skills and expertise to ensure that they are able to act on career and business opportunities as they arise.
The banking industry is at a unique stage where there is a whole lot of regulatory intervention and pressure at the same time as accelerated technological advancements, a position Mr Currie believes represents both a challenge and an opportunity for banks. “We see an opportunity to capitalise on the trust that we have with our membership base, to be able to really grow that relationship and grow our penetration into that customer base. While it’s a challenging time, it’s an exciting time for financial institutions like QBANK.”
During this challenging time, and as it has over every year of the fifty-five that it has been operating, QBANK continues to focus on the mission it developed at the beginning to service a very special part of the Queensland community. “We remain 100% committed to our traditional first responder customer base. We are investing heavily to make sure we keep up with all the technological developments so that we can offer [them] the best available financial products and services.”
Baldasso Cortese has been a leading architectural, interior design and master-planning practice in Australia and New Zealand for 30 years, specialising in groundbreaking architectural designs in the fields of care, education, and lifestyle and community.
With its strong, customer-centred approach, the firm provides award-winning architectural design services to a diverse portfolio of clients, with a wide range of ongoing projects that push the boundaries of what can be achieved in the architectural space. When he joined the practice last year, CEO Andy Scott was tasked with preparing the next generation of leaders to take Baldasso Cortese into the future, as he explained recently to The Australian Business Executive.
Collaborative and forward-thinking
Baldasso Cortese was started in 1987 by Anthony Baldasso and Steve Cortese as a small-scale operation specialising in residential, industrial and commercial buildings. Last year, the firm celebrated its thirtieth anniversary.
“I believe [it’s] a fantastic organisation,” Mr Scott says, “and it’s clearly focussed on client needs and expectations of building a collaborative team. We do have a very strong social conscience, so we do give to charities and the like on a regular basis.”
Over the last thirty years, the practice has been involved in a diverse range of projects for an equally diverse range of clients, including household names such as TLC, Australia Post and Coles, as well as smaller organisations less well known on the public stage.
“There’s been a number of changes in the practice over the years,” Mr Scott adds. “When they started thirty years ago, we were on drawing boards – now we have 3D computer model and visualisation.”
A key element of the firm moving forward is in embracing the increasingly blurred lines between design and contractor work, a change in the industry which has seen a more collaborative approach to architectural design develop.
“As an architectural and interior design practise, we will develop a brief with a client and develop that through to a set of construction drawings, traditionally then they’re tendered and then a builder takes over and builds the project under our supervision.”
In recent years, the delivery method has become more varied, and the firm has become more involved in early contractor involvement, meaning contractors have come in at an earlier stage to be involved in the design itself.
“[This] is interesting, because we can build into the design some of the techniques and methodologies and innovations that the builders would have, which otherwise we don’t get to see until post-tender.”
Leading expert in three key areas
Baldasso Cortese has seen most of its success come from the key sectors of care, education, and lifestyle and community. Mr Scott admits the time is right to start diversifying this portfolio by expanding into other sectors.
“Education has been particularly successful for us,” he says, “because of our focus on primary and secondary schools initially, and then moving into tertiary. There’s been a great deal of expenditure from governments and independent schools alike in that space.”
This has allowed the firm to develop some significant Intellectual Property in this area, helping rank them in the top three architectural practices in the education sector in Victoria, a ranking reflected in the awards received and the number of opportunities the firm is offered.
“When most of the significant clients in the area go to tender for architectural services, we’re usually on that list. That part of our work probably represents about 35% of the total portfolio, so it’s a fairly significant piece of work for us.”
Clients in the education space include big names such as Catholic Education Melbourne, the Ministry of Education in New Zealand and the Victorian Schools Building Authority, as well as a number of privately run schools in the area.
“The care team are focussed on aged-care, healthcare and childcare. They’ve completed projects both here, in Melbourne, and in Sydney. That is about 25% of the income of the business as the moment, but it’s rapidly expanding, particularly in aged-care and healthcare.”
Over the last thirty years, Baldasso Cortese Architects have been involved in a diverse range of projects for household names including TLC, Australia Post and Coles
The most recent demographics suggest that aged-care is seeing particularly high demand, prompting Baldasso Cortese to build four aged-care facilities of over 120 beds in and around the Melbourne area to cater for the demand.
There is also plenty of activity in the healthcare space, both in primary and secondary healthcare, where the firm is working with a large number of hospitals around the state to improve facilities.
“Lifestyle and community is our term for what others might term ‘mixed-use’. We brought two teams together about 12 months ago – one was a residential team; one was a commercial and retail team.”
These teams were merged as a response to a marketplace trend originating from overseas, involving these two particular typologies being combined into one element, when usually they remain separate.
“We combined a team that would match that, and had that capability in one integrated team. The team has built now to be about 40% of our overall income, so it’s been highly successful over the last 12 months, and we’re forecasting that it will continue to grow.”
The portfolio is designed to facilitate market diversification. With each of these markets subject to peaks and troughs, like any other sector, the firm is able to build up business resilience and move people between sectors depending on how well they’re performing.
Mr Scott believes the education sector will stay busy for the foreseeable future, especially the tertiary space, and that aged-care and healthcare will also sustain. It’s the lifestyle and community area where the biggest growth for the business is expected.
“We are seeing more and more of what you might call urban village developments, or precinct developments, where there are entire areas or small suburbs being developed in one go. There’s several of those happening in the Western suburbs of Melbourne right now.”
This ongoing trend can be seen all across Australia, and represents some significant developments. Such changes can be attributed to growing urbanisation, driven by the continued population growth in the country.
Equally important are the differences in architectural requirements in each of these individual sectors. Education, in particular, is usually aimed towards catering for the different teaching methodologies offered by each individual establishment.
“For example,” Mr Scott says, “there’s a growing trend for having integrated facilities for special needs children. We’re increasingly designing all facilities across the campus to accommodate special needs.”
Baldasso Cortese has a designated team for understanding and catering for the different teaching methodologies the firm are asked to work within. This often involves working with teachers to understand how they deliver their curriculum.
Award-winning customer service
“Our focus, from day one, is on clients. I listen to feedback from clients on a regular basis, and one of the criticisms they make of architectural practices is that they are fairly arrogant and try to impose their will on design upon them, rather than listening to their needs.”
For Baldasso Cortese, it is imperative to put in the necessary time to listen carefully to what the client is looking for, developing a brief alongside them with their needs at the very forefront of the process.
“We’ve won quite a lot of customer service awards based on the fact that we actually take the time, with care and attention, to listen to the actual needs. We explore them, we put options up, and we develop a design in conjunction with the client.”
This commitment to service excellence has been a key driver of the firm’s sustained success, resulting in a number of clients coming to Baldasso Cortese as a direct result of a negative experience elsewhere.
“Our focus, from day one, is on clients. I listen to feedback from clients on a regular basis, and one of the criticisms they make of architectural practices is that they are fairly arrogant and try to impose their will on design upon them, rather than listening to their needs.”
With such a diverse portfolio of clients, the firm often finds itself having to work within very different budget expectations, meaning it must be particularly shrewd about how it converses with clients regarding budgets.
“Managing a client’s expectations with regards to budget can be very difficult. We do have clients that come to us and outline their aspirations for a development, and we’ll quickly determine that the amount of money they’ve got to spend is about half of what they need.”
This is an ongoing challenge for the firm, and the outcome will often depend on the strength of the client’s vision. Usually, some diligent work early on in the briefing process will identify which parts of the design are essential and which are expendable.
“At the moment we’ve got another problem in that area,” Mr Scott adds, “which is that there’s an increasing demand on resources across the industry, both people and materials, and that’s driving up construction costs as well.”
This means the firm has to attempt to forecast potential additional costs at the beginning of a project, building them into original client discussions to make sure the expectations on budget are accurately represented.
Wide range of ongoing projects
“At any point in time, we’ve probably got about 70 projects on the go,” Mr Scott explains, “and they range from individual residences up to a project which has recently been appointed for – a large precinct development of up to about $1b worth of construction.”
The company’s most recent work includes the highly impressive TLC Clifton Hill project in the north of Melbourne, an integrated aged-care and healthcare facility, which will be completed and handed over to the client in August 2018.
“It’s a ten-level, high-end aged-care facility, and it incorporates an integrated health hub with 127 rooms, a basement car park, rest room, ancillary spaces, communal spaces. It’s got the local GP clinic in there, nurse’s treatment room, pathology, gym and physio suite.”
This project has been driven by a shift in the desired location of aged-care, which has traditionally been situated in the outer suburbs. The Clifton Hill development is designed to serve those who have been living in the area all their lives and want to stay in the community.
“Because of the density there, it drives the development upwards – hence the ten levels. Another important aspect was having the local GP’s clinic in the ground floor of the building, so that helped to serve that integration with the community that’s been there for so long.”
Another key project is the recently completed 750-seat Performing Arts Centre for Huntingtower School in Melbourne east. The centre provides excellent sightlines, with exceptional acoustics, whilst also maintaining a feeling of intimacy.
“That’s an outstanding facility,” Mr Scott says. “The quality and standard of the facility that’s been delivered to the school, I still find unbelievable. I’m really pleased with the job we’ve done there.”
Perhaps the most significant element of this project has been the feedback received from the school, which is absolutely ecstatic to be in possession of such an impressive venue. This kind of feedback only enhances Baldasso Cortese’s longstanding reputation for excellence.
Another project about to commence construction is the second tower at the Fivex building on Flinders Street, in the centre of Melbourne. Being in a city centre location has already presented significant development challenges for this project.
“It’s a very tight urban space, surrounded by towers, and we’re actually putting a tower on top of an existing podium, which will remain occupied during the construction. So that’s a particularly challenging project.”
The way the structure is being built means that the tower needs to be lightweight, and so has been made out of a mix of timber and steel. This has involved some innovative construction work and has been prefabricated offsite to be craned into position.
“I’m very focused on people in the organisation. I strongly believe that, if I do the right thing by them, they’ll do the right thing by me. We have that ethos in the practice as well, and it seems to be working for us.”
Industry trends will come and go, but one thing that keeps Baldasso Cortese’s designs fresh is their lack of desire to follow fashions. The firm’s approach is much more geared around individual needs rather than what everyone else is doing.
“We tend to design our buildings bespoke to the needs at the time. We do try to build in some longevity to them, and most of our designs are very contemporary and clean in their nature, and they will probably live past the fashions in architectural design over the years.”
A solid platform to grow from
Mr Scott joined the practice as CEO in 2017, on the back of extensive experience leading architectural practices of various sizes all over the world. The industry has taught him many lessons, most of which have revealed more about what not to do in business.
“If you watch the people around you,” he says, “you can learn a great deal. I learned a lot from a CEO that I worked for back in the UK. He was an incredible people manager, always took time out for the people around the office, even in crisis situations.”
This experience taught Mr Scott that leaders of businesses are, more than anything else, people managers. If they forget this key distinction, then they will struggle to do their job effectively, and everything else will fail.
“I’m very focused on people in the organisation. I strongly believe that, if I do the right thing by them, they’ll do the right thing by me. We have that ethos in the practice as well, and it seems to be working for us.”
Mr Scott was hired to drive the next generational change within Baldasso Cortese. There is already a huge amount of work going on to prepare for this, including moves to diversify both the portfolio and the firm’s geographical footprint.
“That’s just to build some resilience into the practice,” he says. “We’re actively looking at establishing a centre in Sydney and Brisbane, and perhaps overseas, and we’re developing healthcare and tertiary education markets and strengthening those.”
The overall plan is to give the next generation of the firm’s leaders a solid platform to grow from. In addition, the firm is actively working towards a vision of what skills the future leaders of the practice will need.
“We’re doing a lot of work to understand what our new leader needs to look like, in 20 years’ time. We’ve carried out a number of workshops, where we’ve sat down and said – what’s it going to look like in 20 years’ time when we’ve got robots building on site?”
With technological innovations such as Artificial Intelligence and Virtual Reality rapidly changing the way buildings are designed, the firm is aware of the need for a different managerial mindset in the future, and is working hard to prepare for all eventualities.
“We’ve devised a measurement framework now, so that we’re going to measure everyone in the organisation who wants to opt-in to being a future leader, and each of them will get a report from that, and that becomes a development plan for the individual.”
This approach will give potential new leaders room-to-grow and succeed existing leaders, taking ownership of the company. Equally important is encouraging existing leadership to pass the baton efficiently to the next generation.
“It’s an interesting dynamic that we’re working with, but we’ve got a good period of time to make it happen, and I’m very confident it will happen very well. We’re hoping in 100 years’ time we’ll be on the fifth generation of the practise and still going strong.”
Despite having travelled all over the world in his career, Mr Scott is extremely happy to have settled finally in Australia. In terms of Baldasso Cortese’s industry, the future for the country looks very promising indeed.
“I can see the next five to ten years being very exciting for us all,” he concludes. “I think there’s a lot of infrastructure development going in that’s driven by population growth in various parts of the country. I truly believe [Australia] will be the envy of the world.”
Find out more about Baldosse Cortese by visiting www.bcarch.net.
SendGold CEO Jodi Stanton has been through the blockchain roller coaster over the last five years, and has the scars to prove it. Today, her young company, SendGold, is live in ten countries in various forms across Asia-Pacific, delivering digital gold money to anyone with a mobile phone, and does so without relying on blockchain.
What is SendGold and how did you get started personally?
“To our customers, we are a very simple product,” Ms Stanton asserts. “We’ve turned gold back into practical money. You can buy it, send it as a payment, gift it cross-border instantly, and sell it at any time. Soon you’ll be able to spend it at merchants as well. It has many of Bitcoin’s attractive properties, but it’s fully-compliant, with an asset at its core.” Stanton stresses that if you buy gold through SendGold, you own full legal title to your gold. It is not a security like an ETF, a derivative or a blockchain security token.
Ms Stanton began her career in risk management in insurance and on Wall Street, helping investment banks both construct and unravel complex derivative trades. But she also bicycled around the globe carrying her own gear, pedalling over 40,000 kilometres across 25 countries including some of the most remote regions on the planet. She’s been communicating and transacting with both the top and bottom ends of town for decades.
“This broad experience is how I really learned about money, its buying power (or lack thereof), and the importance of owning an asset. The gap between the extremely wealthy and everyone else is the widest in history and it’s getting wider, in part because of the way our money systems are designed”, she says.
She adds that even in the age of the mobile internet, cross-border transactions are expensive and slow, relying on complex legacy banking systems and bank currencies that lose buying their power through inflation. And according to Ms Stanton, in many countries these declines in bank currency values have been dramatic. In the Asian Financial Crisis, for example, the South Korean, Thailand, Indonesia, Singapore, and Philippines currencies lost more than 50% of their value in the space of less than one week. According to the Australian Bureau of Statistics, the Australian dollar buys 20% less than it did 10 years ago and 40% less than it did 20 years ago.
“Money is broken, and has been for a long time”, she says.
Ms. Stanton set out to address this growing wealth gap, and put a simple asset into the hands of those who are concerned by money printing, planned inflation, expensive cross-border transactions and the potential for another global crisis.
“Our early customers are sophisticated,” Ms Stanton notes. “Many of them work in the consulting and finance sectors and read a lot of news. They tend to be health conscious and seek to live life to the fullest. Many are well-travelled, politically aware and know that the buying power of their bank money is eroded each year.”
As a money platform, people use SendGold for many purposes. Some send money each month overseas. Some use it as a savings account. Some send gold as a gift. Some social groups have adopted SendGold as a way to routinely split restaurant bills or holiday expenses.
According to the Australian Bureau of Statistics, the Australian dollar buys 20% less than it did 10 years ago and 40% less than it did 20 years ago, creating a resurgent interest in gold
How is SendGold unique in the market?
Ms Stanton states, “I start each and every day with a clear focus on how we can solve problems for our customers and how we can differentiate ourselves in the market for our shareholders. To me these are the same thing.”
According to Ms Stanton, blockchain was designed for digital assets, and any tangible asset-based currency, whether a hybrid cryptocurrency or simply digital like SendGold, are unavoidably more centralised than purely digital alternatives because of the centralised management of the underlying assets.
“All asset-based digital currencies need to address things like regulation, banking integration, liquidity and management, so unlike many others in the market, we started there. And now we have a strong foundation to work from,” she says.
Ms Stanton says they will be able to offer valuable products and services to customers that only a mobile-only company can offer.
She adds that SendGold’s innovation in the gold sector is unparalleled, with its growing Gold-as-a-Service business offer (GaaS). “We have signed on our first few major GaaS partners and are talking to several others including neobanks, global e-wallets, social gaming platforms, reward programs and universities”, she says.
They have also innovated with gamified customer acquisition through its second mobile app “Gold Rush”. It’s like Pokémon Go but with real gold. According to Ms Stanton SendGold can drop real gold in any country to drive awareness.
What have been your key milestones?
Ms. Stanton emphasises that SendGold today maintains the powerful crypto benefits of instant peer-to-peer cross-border exchange, transparency and low cost, but does so in a way that complies with global regulation. The company spent two years making sure SendGold’s infrastructure was globally compliant, secure and low cost.
“Full compliance was non-negotiable for us, not just for legal reasons but because we feel user adoption requires full integration to the world’s existing banking system. Putting gold at the heart of the system also addresses the complexity and price volatility issues of crypto, which are hindrances to large scale adoption”, Ms Stanton asserts. “And we’ve done this with proven, enterprise-scale, bank-grade technologies so SendGold stays in control of the operating infrastructure.”
“Digital asset risk mitigation was like moving air around in a balloon animal. We were excited when we cleverly solved one risk, deflating the arm of the animal, only to see the air expand in the other arm. With distributed ledgers as infrastructure, you have to be careful you’re not simply moving the risk around.”
SendGold spent significant resources to ensure that SendGold is fully-regulated under Australian law. Agencies and laws included in the scope of SendGold’s Compliance Policy include AUSTRAC, RBA, APRA, ASIC, ACCC, AFSA, FIRB, OAIC, privacy laws and the ATO and Australia tax law. Planting SendGold in Australia made sense not only for compliance reasons but because Australia has a long historical association with the precious metal and is the world’s second-largest producer. She said they chose gold as it’s one of the largest markets in the world, it’s well understood, and has delivered impressive returns to investors over the long run.
To underscore SendGold’s commitment to the highest levels of security, Ms Stanton explains that, early on, the company employed Steve Wilson. A global expert in cybersecurity in financial services, Mr Wilson sits on a number of committees and programs including the U.S. National Strategy for Trusted Identities in Cyberspace, and the U.S. Department of Homeland Security Science and Technology program.
SendGold’s innovation in the gold sector is unparalleled maintaining the powerful crypto benefits of instant peer-to-peer cross-border exchange, transparency and low cost, but does so in a way that complies with global regulation
“We began with a threat risk assessment (TRA) for both the company and its customers across confidentiality, integrity, and availability,” Ms Stanton explains. “We have maintained a live TRA, a live security policy and quarterly risk reviews with our (financial and cybersecurity) risk committee. We’re not afraid to say we’re obsessed by managing risk and security.”
And while SendGold is low cost, Ms Stanton hinted that the company is busy lowering costs even further and will make an announcement on this subject before the end of the year.
You began with blockchain, but given you are not reliant on blockchain now, is blockchain in your future?
“We started out looking for a solution that satisfied our security, liquidity and compliance requirements to solve real business problems beyond storage and speculation. After 24 months full-time investigation, several in-house trials and an end-to-end prototype on a distributed ledger, we were convinced that blockchain ledgers did not yet present a compelling solution to that brief.” She adds that putting gold on current blockchain platforms presents more effort than it’s worth, adding an unnecessary layer of complexity and cost.
“After almost ten years, very few are using Bitcoin as money, in large part because of these ongoing security challenges”, she says. According to Ms Stanton, user-level security, in particular, has a long way to go, and crypto theft has already topped $1B this year. “The irony of a trustless system.”
But she is keen to point out that the company is immersed in the cryptocurrency sector and ready to move their dedicated tokenised product when decentralised ledger technology is proven, scalable and compliant.
“Blockchain innovation is a long-term fundamental paradigm shift versus a short-term disruptor. We believe it will take years to evolve into practicality. On the other hand, gold has been a store of value for thousands of years. Gold is the only investment asset that has survived every war, calamity, and economic recession in history, and it solves the volatility issue of cryptocurrencies.”
Ms Stanton believes this provides a significant opportunity for SendGold to combine history’s most reliable asset with fintech’s most innovative paradigm shift, as digital money matures.
She claims SendGold’s early work was invaluable and ongoing, and led the team to their unique business model of today.
What is your next goal?
From late 2017 SendGold has been able to accept a customer from any non-sanctioned country (from a compliance standpoint) and is currently live in various forms in India, Australian, New Zealand, China, Vietnam, Indonesia, Hong Kong, Singapore and the Philippines.
Given its compliance mandate, the company rollout makes SendGold a regional, rather than global play, requiring regional expertise across a number of domains including payments, regulatory and anti-money laundering laws.
The company is busy rolling out its peer-to-peer cross-border application with 350 global ways for ‘money-in’ and redemption in 140 currencies in 160 countries at wholesale exchange rates.
Ms Stanton concluded, “We are an iceberg, with very simple customer-facing products, and a robust framework below the surface. We are now ready to scale.”
The National Jockeys Trust is a public charitable trust which provides funds and other benefits for the relief of financial difficulties for jockeys who have suffered from career-threatening illness or injury.
Since its establishment nearly fifteen years ago, the trust has helped over three hundred jockeys with equipment and resources to assist them during and after their recovery.Chairman Paul Innes discusses the formation of the trust in response to a growing need for national jockey support, the dangers prevalent in the horse-riding industry, and the trust’s plans to provide an even greater level of support for ill and injured jockeys in the future.
Benefitting Australian jockeys
The National Jockeys Trust was established by the Australian Jockeys Association (AJA) in 2004 to provide support services to jockeys who have been permanently injured, disabled, or are suffering from illness, and the families of those who have lost their lives.
Paul Innes’ connection with the AJA began in 1998, when he was appointed Secretary of the New South Wales Jockeys Association, in charge of improving welfare and conditions, maintaining the books of account and conducting regular meetings of the Executive.
The AJA was established in 2002, as it became clear that state associations were unable to provide the level of services needed for jockeys across the country. It was decided that a national body should be set up to provide adequate benefits for riders.
“One of the catalysts for the establishment of a national body was the significant increase in the cost of insurance for jockeys,” Mr Innes explains. “Around about 2001, the cost of Public Liability Insurance increased significantly for jockeys.”
This increase was enough to force many jockeys who couldn’t afford the cost out of the industry. This loss of talent was particularly high in rural areas, with a large amount of riders unable to meet the increased demands.
One of the key drivers of the formation of the AJA was the desire to put together a national policy on insurance, a goal which was quickly achieved in conjunction with one of Australia’s biggest insurance brokers.
“We established a national policy whereby jockeys were covered, not just for Public Liability Insurance, but also Personal Accident, and subsequent to that we now have in place such policies that jockeys don’t even need to pay directly for those costs.”
These policies see claims paid for through an agreement within the industry that 1% of all prize money is used to fund insurance costs on behalf of the riders. Without this agreement, the industry would continue to lose riders who cannot afford to continue.
“When we established the [AJA],” Mr Innes says, “we realised that there weren’t proper support services, particularly financial services, for jockeys who might have been seriously injured, in the industry.”
The general feeling was that the industry did not provide enough support to members of the AJA and jockeys in general, and that the body should take on the responsibility of establishing a trust that would rectify this problem.
“In certain circumstances, prior to the trust being established, high-profile riders might have been provided with significant assistance through large fundraising functions, whereas a country jockey, a little known jockey, there might have been a raffle at the local pub.”
The consensus within the AJA was that this level of disparity within the industry was unsustainable. The only way to balance the scales was to establish a national trust that would make sure all jockeys were treated equally. The answer was the National Jockeys Trust.
Mr Innes holds the position of Chief Executive at the AJA. Hewas instrumental in helping found the National Jockeys Trust in 2004, and was appointed inaugural Chairman of the trust. He has held both these roles ever since.
Invaluable support to ill and injured jockeys
“Being a jockey is the most dangerous occupation in this country, according to the Menzies Institute. There are approximately 830 professional jockeys in Australia, and somewhere between 30-35% will have at least one injury each year that will stop them from riding.”
The range of injuries suffered by riders every year is wide, with this 30-35% being unable to ride for anywhere between a few days and several months. One or two of these riders will suffer permanent disabilities each year.
“Tragically, we will also on a yearly basis probably average at least one death. So it’s a very dangerous industry. We have built memorials at Randwick in Sydney and Caulfield in Melbourne to those riders who have lost their lives.”
These memorials consist of the bronze figure of an anonymous jockey, and contain the names of more than 880 riders who have lost their lives over the years. The statue is based on famous Australian jockey Hughie Cairns, who was killed at Moonee Valley in 1929.
Though not particularly common, many of the more significant injuries are suffered when a rider is thrown off the horse during a race, which can result in spinal damage, quadriplegia, paraplegia, or in the very worst cases, death.
“Fortunately,” Mr Innes says, “even with falls, on most occasions jockeys are able to get up and walk away. But the dangers are there on a daily basis for jockeys, and both they and their families are more than conscious of that.”
A key part of the trust’s responsibilities is to create awareness amongst the public of the dangers of being a jockey. Mr Innes admits that even those who attend races regularly will have little idea about the risks inherent in riding.
“An average jockey is about 53kg, they ride a thoroughbred racehorse of some 500-550kg in weight, at approximately 45km/hr in a field of 12-16 horse on average. So there’s not much margin for error when it comes to incidents or accidents.”
Whilst most people may not take a particular interest in gambling, the trust hopes to educate the public about the courage of the young men and women who take the risk of getting on a horse every day in order to keep the industry ticking over.
“Without jockeys, there’s no industry,” Mr Innes explains, “and [there are] only 830 licensed riders across the country to keep this mammoth industry ticking over on a daily basis.”
Covering the cost of injury
Even though jockeys working in Australia are considered contractors under common law, they are deemed employees of the clubs they ride for on the day of a race, and are therefore eligible for benefits through worker’s compensation.
“It’s the more significant injuries, and those injuries that bring about the end of a career, where we see the support services working particularly well now through the National Jockeys Trust to provide support and assistance with rehabilitation.”
The support the trust is able to provide in terms of rehabilitation is fairly limited in Australia, but ongoing assistance with advice and support to families, and in particular the finances required to recover from a long-term injury, is invaluable.
“The trust is there not just for current riders,” Mr Innes explains, “but we assist former riders who might have fallen on hard times as a result of injury or illness, and we’ve assisted many former riders in that way.”
With such a saturation of sports in the country, any organisation with ties to a sport must work particularly hard to make itself seen and stand out from the crowd. The National Jockeys Trust is no different.
“We are sports mad [in Australia], and there are so many ways that people can participate in sports. Of course this is a sport that involves gambling, and gambling these days has taken on a multi-faceted aspect, in regards to online and many other forms of gambling.”
One of the ways the trust has raised its profile is via a sponsorship arrangement with LUCRF Super, a leading Australian superannuation firm, which has provided ongoing financial support for the trust.
“The way that is elevated is that jockeys ride with a pair of breeches that have on them the LUCRF Super logo, and we explain to people that as part of the sponsorship deal, all the funds go to the trust to support seriously injured or ill jockeys.”
Traditionally, younger people have come into the sport through a love of horses, particularly those from more provincial areas. Many of them find their way into the industry through pony clubs and similar organisations.
“The industry is big and far and wide. We’re a horse loving country, and we have been since the first fleet arrived here, and the number of horses across the country has generated a significant interest for young people to become involved.”
The problem in recent years has been the increase in average weight of the population, making it more difficult for young people wanting to ride to stay under the minimum weight requirements to become a professional rider.
“That is one of the reasons why we’re seeing more female riders come into the industry over the last ten years,” Mr Innes explains. “Ten years ago there would have been a handful of female riders probably across the country, now about 27% of jockeys are female.”
Increasing services to jockeys in the future
“Up to date we’ve concentrated on providing immediate and meaningful assistance for jockeys in need as a result of injury or illness. That’s been our mission. But in the future, we would like the trust to concentrate on establishing relationships with rehabilitation centres.”
This desire is driven by a growing trend in the UK, where the national body for jockeys, the Injured Jockeys Fund, has formed relationships with two rehabilitation centres, one in Yorkshire and one in Berkshire, to increase the level of support for jockeys in need.
“They are providing support services for physiotherapy, hydro-pool treatments of jockeys who have spinal injuries, maybe brain injuries, or even not so significant injuries, but injuries that are keeping the rider out.”
The trust believes that such a direction would be extremely beneficial to riders in Australia, and has become one of the major goals for its future plans. The size of the country in comparison to the UK, however, makes it much harder to form such relationships.
“We would probably like to partner with various rehab centres around the country, whereby we’re able to perhaps inject funds to work in partnership with those rehab places to provide services to our members who are suffering certain injuries.”
A further area the trust is keen to explore is a system of outreach, another key component of the UK model. The Injured Jockey Fund has a group of almoners who contact and visit injured jockeys to assess their needs and offer ongoing assistance.
“The trustees believe that would be something we would like to introduce. We’d like to have half a dozen or so people who can make contact, see how they’re handling their illness or injury, and provide whatever support can be provided, until they recover.”
After almost fifteen years of providing invaluable assistance to ill or injured jockeys and their families, it is clear that the National Jockeys Trust is not going to slow down. Such an organisation is invaluable to the continued wellbeing of riders across the country.
Find out more about the National Jockeys Trust by visiting www.njt.org.au.
Specialising in the professional management of residential, commercial and industrial Owners Corporations, MBCM Strata Specialists has become the name to trust in Australian strata. With over forty-five franchises across Victoria, MBCM is a Strata Management firm with a global conscience practiced at a local level.
Anton Silove knows all about the benefits of franchise strata. He is both a director and the chairman of MBCM Strata Specialists. Mr Silove spoke with The Australian Business Executive, sharing his thoughts on how MBCM Strata Specialists has developed such an imperious reputation in the Australian strata industry.
Franchisee to Director
Mr Silove’s career began with manufacturer Cussons International, giving him the opportunity to work in both England and Australia, before he made the decision to independently migrate to Melbourne in 1994.
He joined Orica (known as ICI Australia at the time), and over the next fourteen years took on a number of roles across different businesses in organisational management and leadership.
The move into strata was prompted by a friend who was an existing franchisee of the group. Mr Silove began his journey into the strata business by acquiring and operating a Melbourne Body Corporate Management franchise area.
“The corporate experience gave me a broad range of management and leadership skills,” Mr Silove says, “which lend themselves well to strata. In 2009, I was looking for a business to buy. The industry economics looked very sound. I was impressed with the franchise system.”
The strata industry has been a good fit for Mr Silove, who now owns three franchise areas with MBCM, and joined the company’s franchisor Board of Directors in 2015. He currently chairs the board, and has a clear vision of how his own business should run.
“I left corporate, in part, because of one of the big issues of management that always troubled me,” he says, “and this is that top-down, pyramid approach to management. I’ve totally flipped that on [its] head.”
Mr Silove’s team of twelve staff is perfectly equipped to deliver great services to customers every day, and he believes the manager’s role is not to simply tell them how to do their job, as they have been well trained in doing what they are paid for.
“My role is to provide a service to them, to help them be the best that they can, to help mould the business around their individual needs. I seriously believe that business has got this wrong—we really should be in service to each other, not directing from the top down.
Franchising strata
“[The company] was founded twenty-nine years ago,” Mr Silove explains. “From there, Melbourne Body Corporate Management grew into forty-nine franchise areas across Victoria. We’re looking forward to our thirtieth celebration next year.”
This history of exceptional growth is indicative of the company’s impressive service offering and ambition. The company’s longevity has been further assisted by a robust re-branding two years ago, changing its name to MBCM Strata Specialists.
Positioning itself for a move across Australia for several years, the company decided a name change would be essential to meeting this goal. It retains the option of creating new brands in other territories in the future, but for now MBCM can trade in all states.
“We’re now in the position to take the franchise across the nation,” Mr Silove says. “We’re respected as a high quality company, and we operate with the highest level of integrity, which is part of our trademark.”
The company’s core values reflect a passion for being the best at what it does, employing people who set the standard for service and professionalism in the strata industry. The company is guided in all its dealings by an ethical vision and the interests of its clients.
With so many years of exceptional service behind it, the company consistently learns through its experience, forever on the lookout for ways to improve and innovate its service offering.
The strata industry is fragmented, with high levels of competition. MBCM Strata Specialists must work hard to differentiate itself as a service provider, leveraging its unique position as a franchisor.
“As a franchisor, we have an exceptionally high level of service,” Mr Silove explains, “but also provide great systems and training to our franchisees. A level of integrity in the industry is a very important thing.”
With such a low barrier of entry into the industry, it is often the case that inexperienced and untrained managers are taking on a business, attempting to provide efficient services in a particularly complex framework.
“The franchisor ensures that high levels of aptitude are there, but also a very high level of support in the training and getting people up to speed. We’re implementing an internal audit system, which ensures that very high standards are met through out franchise network.”
Across the franchise network, MBCM Strata Specialists manages just over 40,000 units, putting it in the top five strata companies in Australia
Support for franchisees is second to none, and a key driverof the company’s sustained success. With over 500 years of collective experience across all offices, there is always someone with the necessary knowledge available to offer insight and find the right outcome.
Across the franchise network, MBCM Strata Specialists manages just over 40,000 units, putting it in the top five strata companies in Australia, an incredible feat for a business currently based exclusively in one state.
As it moves closer to rolling out its franchise network across the country, the company must remain aware of the differences that come from moving a business with state-based regulations into other areas.
“The platform that we operate under in terms of financial reporting, systems and processes, is very consistent,” Mr Silove explains. “That can operate across all states. However, ensuring that it’s done in a way that reflects the local legislation is critical.”
This means ensuring appropriate training and support is in place for franchisees to be prepared for significant changes in legislation across different areas of the country. This takes a lot of work, breaking down individual legislations to ensure thorough compliance.
Navigating the industry
The Australian strata industry is still finding its feet, making it of particular importance for companies to engage well enough with the public to relay important information on industry practices and issues.
One of the main areas of confusion for strata owners is in understanding the particular issues strata faces. Strata managers such as MBCM Strata Specialists have a responsibility to keep the public informed of any significant concerns they have.
“There are so many industry issues,” Mr Silove says. “The legislative framework is not exceptionally community friendly, which means that supporting great communities and great places to live can be difficult and costly.”
Equally frustrating is the way the law is applied by VCAT (Victorian Civil and Administrative Tribunal), which is inconsistent. This causes uncertainty when moving into a new legal framework, and can create expense and difficulties for people.
Mr Silove’s team of twelve staff is perfectly equipped to deliver great services to customers every day
“Another significant issue is the way builders engage in building. So, they actually engage their own surveyors in Victoria. The question is, who would you engage? Someone who’s more or less likely to pass your building?”
This cutting of corners has brought to light significant industry concerns, including leaking buildings and the use of flammable cladding, an issue high on the agenda in the wake of Melbourne’s Docklands fire in 2014 and the recent Grenfell Tower tragedy in London.
“There’s now a cladding taskforce,” Mr Silove says, “which is looking very closely at the number of buildings that do have flammable cladding. It’s a big industry issue, and one that’s going to be costing people a lot of money.”
Part of MBCM’s commitment to keeping the public up to date on industry issues and trends comes in the form of the ‘Big B’ initiative. This initiative was designed in response to what Mr Silove describes as “a real decline in neighbourliness” in the last 30 years.
“I’ve talked to a lot of people about this,” he says, “and I think there’s a fairly strong consensus around that. People more and more, they look to others to solve their problems, whether its council, governments, Owners Corporations managers, mediators or lawyers.”
This trend of people looking outside their own community for help is growing. Mr Silove believes it’s time for a return to the wholesome community values of the past, to harness a rising tide of people who want to be involved in community building.
“The SCA [Strata Community Australia] is backing a community project to create a national working ‘B’. It’s a real vehicle for our industry to seriously engage in community building and to make a real difference to neighbourhoods.”
With the SCA as its leading body, the strata industry is on the right track towards improvement. One thing it does particularly well is engage in the forming of legislation and the informing of legislators about issues faced regularly by strata managers.
“That’s the key thing that is happening now,” Mr Silove says, “and we’re hoping for new legislation. It’s possibly looking unlikely to come out later this year, but certainly next year we would be hopeful that comes through.”
It is absolutely critical that the industry has a strong educational framework, which it now has in the form of a Cert IV Strata Community Management program. It is vital that engagement in strata education is increased.
MBCM Strata Specialists have won numerous industry awards including Franchisee of the Year award
“There’s going to be a shortage of managers in the future, unless we start developing an educational pathway and a career pathway. Companies like MBCM Strata Specialists do have the reach and the ability to form internships and take people through its organisation.”
Given the fragmentation of the industry, there is still a significant number of strata management companies which are unable to offer these kinds of educational advancements, meaning there remain significant problems ahead.
Why we come to work
While being heavily invested in the success of the company as a whole, Mr Silove continues to work hard on his own franchise areas, striving to run each business in the best possible way to maximise revenue and employee engagement.
“I’ve always taken the position that regardless of what the franchisor is doing, I want to try and be at the leading edge,” he says. “Five years ago, we asked ourselves a very critical question: why do we come to work every day?”
With the embracing of this question, the level of thought process at an MBCM franchise becomes clear. The support and freedom provided to franchisees to be able to ask these kinds of question is key to the company’s wider ethos.
“It took about six months to move from the obvious, which is we come to earn an income, provide for our families—to really wanting to all make a real difference to people, and to create better places for people to live and work.”
The realisation that business is more than just a money-making exercise has had a real impact on the way the franchise interacts with its clients, the team, contractors and all other parties involved in making it tick, elevating the business to a new level.
“We get most of our business through referrals, so I think that’s an indication that people do enjoy our service. Interestingly, through our contracting network we get a lot of really positive feedback—contractors say that they prefer to deal with us.”
It’s almost as an afterthought that Mr Silove mentions the numerous industry awards the franchise has won, so focussed is he on the glowing testimonials from those directly involved in the business, from staff to contractors to customers.
Among these awards is MBCM’s Franchisee of the Year award, which coupled with a high Net Promoter Score (NPS) highlights exactly how Mr Silove’s targeted approach to running a business is a testament to the company’s wider success.
The future looks bright for each of the company’s franchisees, with a continuing commitment to providing value through education and keeping owners informed of industry-wide issues distinguishing them from competitors.
In addition, technological advancements are changing lives, with the newest innovations moving across the globe now finding their way into the strata business, helping companies like MBCM Strata Specialists deliver the very best service available.
“[We are] a company that has the reach and the ability to create technology and leverage off that. People are going to start getting way more engaged in community, their properties, building their wealth, and better places to live through this engagement.”
Find out more about MBCM Strata Specialists by visiting www.mbcm.com.au.
Global medical device company PolyNovo (ASX:PNV) is focused on delivering improved patient outcomes through the use of innovative polymer technology. Paul Brennan was appointed as CEO in 2015, and brings extensive knowledge and experience to the role.
“I’ve always had a curiosity in manufacturing and project development,” Mr Brennan says, “at ConvaTec, Ansell and Smith & Nephew, so I’ve always been curious as to how each part of the business works.”
When the opportunity arose to apply for the position at PolyNovo, Mr Brennan felt it represented a good mix of everything he’d been previously involved with, all concentrated into one
“It’s ever-changing, very dynamic. We’re fast growing and it’s very challenging. But a lot of those core strengths on marketing, corporate structures, quality management systems and manufacturing, are things that I’ve been able to draw on in this role.”
PolyNovo’s work is based around the unique polymer NovoSorb™, and focuses on the development and commercialisation of innovative medical devices in the treatment of burns, surgical wounds and Negative Pressure Wound Therapy.
“[The polymer] is biodegradable and very cell-friendly, meaning it’s non-toxic to new cells. So we help reconstruct damaged tissue in a variety of fields with a novel polymer that you then excrete through your urine or breath out through your lungs.”
Biodegradable Polymer
The company’s first product to go to market utilising the NovoSorb™ polymer is a wound dressing product for full-thickness wounds and burns known as a Biodegradable Temporising Matrix (BTM).
“Whenever you lose the underlying structure of your skin, which is call the dermis, we can actually regenerate that dermal layer by putting in a unique polymer, and the cells of your dermis grab back into that layer and re-vascularise.”
The dermis is the layer of skin that contains all the blood vessels, fat, elastin and cellular structures, and can be lost through the excision of a melanoma, burns, trauma, reconstructive surgery or infection.
“[The polymer] remains inside you for up to twelve months, and dissolves away over that period, and you excrete it through your urine predominantly as lactic acid, and you’re left with a very supple and mobile skin, and a very good cosmetic and functional outcome.”
PolyNovo’s BTM is currently on sale in Australia, New Zealand, South Africa and the United States, with other markets poised to come on board very shortly, most notably Israel and Saudi Arabia.
“The technology was invented by the CSRIO [Commonwealth Scientific and Industrial Research Organisation],” Mr Brennan explains, “and spun out into a listed company to fund its development pathway in 2004.”
The path to this point has not been easy, and has taken in various corporate ownerships, but a company restructure and new board in 2014 steadied the ship, with a fresh injection of investment going into commercialising and developing the product.
PolyNovo has recently filed its regulatory dossier with the TGA, and is expecting to achieve a listing on the Australian Register of Therapeutic Goods (ARTG)
“Since 2014 we’ve built a clean room manufacturing facility, enhanced our quality management system, built our regulatory team, our R&D science team as well, and we’ve done all of the animal studies that were required, and all the laboratory works.”
The result of this hard work is a product fit for human use, and one that has proved to be exceptionally good. The product has produced excellent aesthetic and functional outcomes for patients treated with it.
“In this space, the products that are used today are animal-derived. By having a purely synthetic product that is bio-reabsorbed by your body and replaced with your own tissue, you have no foreign proteins or foreign body risk.”
The pathways to application for the product are broad, although Mr Brennan admits that the stark reality of the business is that there is a clear limit to how much can be done at any one time.
“At the moment, it’s about the BTM, having that established commercially within the market, bringing on our hernia range of products and a range of breast products. We’re partnering with another company, Establishment Labs, to bring Breast products to market.”
On top of these main products, the company is in second tier development on a range of others, such as a drug-alerting palette, a product which releases a measured dose of a drug per day as the polymer dissolves.
“We’re also growing within implanted NovSorb BTM—with another company in Adelaide, Beta Cell Technologies—islet cells, which are from the pancreas, that produce insulin, and they can successfully be grown in pig studies within the BTM and produce insulin for type one diabetes management.”
In order to find market opportunities across so many different applications, PolyNovo identifies clinical needs in the market, clinicians who express concerns in treatment modalities, and apply the polymer to address a clinical outcome.
Commercialisation Process
The company’s commercialisation process takes in the different regulatory conditions across the world. In the US the company is already FDA approved, registered and on commercial sale, but the Australian market works differently.
“For Australia, the current use is under the TGA Prescribers Exemption Scheme, and that’s a pre-registration scheme, so it allows individual surgeons to request the use of the product for an individual patient. It’s not a blanket acceptance.”
In addition, the company has recently filed its regulatory dossier with the TGA, and is expecting to achieve a listing on the Australian Register of Therapeutic Goods (ARTG) in the second quarter of 2018.
“[ARTG] is the TGA regulatory approval, and that would allow any hospital and any surgeon to purchase the product for its appropriate use, without having to go through an exemption application.”
As the company’s home market, Australia will always be important for PolyNovo, despite being a relatively small global market. The TGA approval will help the company achieve good margin and be profitable.
“Our commercial future looks very strong. The main focus of the commercial opportunity remains the US, followed by Europe, which we’ll enter at the end of 2018, then the other countries around the world, as we can address the regulatory entry points for each.”
The sale of the product in the US should provide sufficient funds for PolyNovo to launch its expansion into other world markets. The strategy of entry will be country-dependent, focusing on the particular areas where these products are to be used.
“In the American market and the Australian market, it’s large surgical wounds, the area of most opportunity, so our focus there is to identify plastic and general surgeons who have advanced skills within this space and target them for the entry into that segment.”
When surgeons are looking for new products, they look for three things: the efficacy of the product in terms of outcome, the cost impact of the product to the health system and the long term outcome for patients using the product.
“We’ve got a very good clinical understanding of the application of the product,” Mr Brennan says, “and the types of surgeons that would be adopting the use of this product in a hospital.”
The company has seen significant recent growth, resulting in a huge rise in staff numbers, an outcome that has stemmed from a multitude of factors, predominantly PolyNovo’s entry into the US market.
“We’ve had a very supportive board. Our chairman is very committed to investing in the company, to make sure that it can succeed. Having a very active, engaged and supportive board is essential for our future growth and development.”
The acceleration in the company’s R&D in new product pipelines has also been vital, with work still going on behind the scenes to bring its hernia, breast and tier two products to market following the success of BTM
People are a positive resource for any company, and its success relies on its staff and the output that they produce. As PolyNovo expands into other markets, staff numbers are growing because of a need for the product to be successful.
“Our staff are very focused on their particular areas, but in all of those what is central is: how does our product enter the market and improve the life of a person who actually has a terrible need because of their illness or condition to be treated?”
The acceleration in the company’s R&D in new product pipelines has also been vital, with work still going on behind the scenes to bring its hernia, breast and tier two products to market following the success of BTM.
The company’s R&D investment is not just focused on growing its product line, but also on new innovations. The BTM product itself was subject to changes which improved its overall
“It’s getting close to our customers, looking at what’s their experience, what’s their need? And then incorporating those back into the design of a product improvement and then bringing that through the regulatory and quality processes so that we can market it.”
All of this ensures that PolyNovo has a bright future. Mr Brennan is proud that the company makes its product at home in Australia, employing Australians and manufacturing in its Port Melbourne plant.
“This is a unique market space in the world, true innovation out of CSIRO, and very proudly employing Australians and showing that we can, as a country, deliver innovative technologies to the world. It’s a very progressive and exciting phase that we’re in.”
Sirtex Medical (ASX:SRX) is an Australian global life-sciences company that develops and delivers effective oncology treatments by utilising innovative small particle technology.
The company is considered a global leader within the rapidly growing market of Interventional Oncology, a field of interventional radiology dealing with the diagnosis and treatment of cancer using targeted and minimally-invasive procedures. On the back of a particularly challenging 2017, the company has worked hard to restore shareholder value and grow earnings, and announced in late January 2018 a proposed acquisition by Varian Medical Systems (NYSE:VAR) for the company valued at A$1.6 billion or $28 per share in cash, as CEO Andrew McLean explained recently to The Australian Business Executive.
CEO Andrew McLean
“I’ve been in medical devices almost all of my career,” Mr McLean says. “I spent over a decade at Becton Dickinson, starting out in the Australia and New Zealand business, primarily in marketing roles.”
After working his way up to marketing manager in one of Becton Dickinson’s business units, he left to work for Pfizer in a higher level sales and marketing leadership role, in a small business unit for Australia and New Zealand.
“I then did two stints in China with Pfizer, then came back to Australia and actually re-joined Becton Dickinson as director of the medical business. I did that for roughly three and a half years, and then Becton Dickinson asked me to relocate to their US headquarters.”
Mr McLean spent the next three years in the company’s head office in New Jersey, filling a variety of different roles in medical devices. After this he was approached by a small British company called Synergy Health.
“I was with that organisation as CEO of Applied Sterilization Technologies and Laboratories, for around about three years, before we were acquired by STERIS Corporation in the United States.”
The merger turned out to be a particularly difficult one for Synergy Health, going up against the US Federal Trade Commission, which believed the merging of the companies was of an anti-competitive nature.
“We believed otherwise,” Mr McLean explains, “so we challenged the FTC on that. We ended up going to court and prevailed, and as a result the combination went ahead.”
Mr McLean spent almost a year with STERIS, helping it to integrate and leading a major business unit called Hospital Sterilization Services, before being offered the chance to return home to Sydney and lead Sirtex Medical.
SIR-Spheres® Y-90 Resin
“Sirtex Medical is an Australian listed organisation,” Mr McLean says, “and our key product consists of millions of tiny resin microspheres that are coupled with a radioactive isotope called Yttrium-90 (Y-90), and those tiny, radioactive microspheres are used for what’s called Selective Internal Radiation Therapy [SIRT].”
These microspheres, which are regulated as a Class III medical device, are delivered using a doctor administered catheter that is placed within the liver and targets inoperable liver tumours directly where they occur. To date, the device has been used for treatment over 80,000 times in more than 1,090 treatment centres worldwide.
“SIR-Spheres Y-90 resin microspheres comprise tiny radioactive microspheres that become lodged in the capillaries supplying liver tumours, providing high doses of radiation directly to the tumour and minimising damage to normal liver cells.”
Sirtex Medical was started in 2001 by Dr Bruce Gray, a surgeon from Perth who came up with the idea of the SIR-Spheres microspheres. The company is now well into its commercialisation process, gaining US Food and Drug administration (FDA) approval in 2002.
“The mission was to treat liver tumours that had not been successfully treated with other forms of therapy,” Mr McLean says, “such as chemotherapy. The other key point is that liver tumours cannot be effectively treated via external beam radiation.”
Because of the sensitivity of the human liver, the amount of external beam radiation needed to properly treat such a tumour would be extremely harmful to surrounding healthy liver tissues. This is one of the reasons why SIRT is such an important treatment modality.
“The main categories of treatment that are available for cancer include surgery, and that’s possible in around about 15% of cases, where you resect the liver and take out the cancerous part, and leave the healthy tissue there.”
Another key treatment for liver cancer sufferers is a transplant. This particular treatment is subject to the limited availability of organs for transplant, making it a far less reliable route to go down.
There is also the process of ablation, where a probe or probes are put directly into the tumours and some form of energy kills the cancer. This kind of treatment is limited to three or less tumours, no more than three centimetres in size.
“Then you’ve got different forms of chemotherapy, and then you’ve got the new biologics and immunotherapies that are coming onto the market, and then you’ve got SIRT, which is primarily used in what’s called the salvage setting.”
“our key product consists of millions of tiny resin microspheres that are coupled with a radioactive isotope called Yttrium-90 (Y-90), and those tiny, radioactive microspheres are used for what’s called Selective Internal Radiation Therapy [SIRT].”Salvage therapy is used on patients who are not suitable for surgery or transplant, or there is no transplant available, who can’t be treated with ablation or chemotherapy, and for whom all other forms of medication have previously failed.
“Therefore, there’s no other choice available, so you go for SIRT,” Mr McLean explains. “There are some instances where physicians will choose to use SIRT somewhere earlier in the regime, but primarily it is what’s called a salvage therapy. It’s the last line.”
The therapy is therefore seen as a life-extension modality. Some patients have found it to be curative and have added a decade to their life, but Mr McLean explains that based on the more than fifteen years in the market, the scientific literature supports that, on average, a patient may see a benefit of 3-6 months in life extension within the salvage setting using the product.
“The product has a shelf life of roughly 64 hours, after which it loses its potency. Anything that’s radioactive has what’s called a half-life, where essentially the radiation is diminishing over time. Some forms of radiation, say Cobalt-60, will last decades.”
Yttrium-90 has a very rapid depletion-of-energy schedule, meaning the whole treatment needs to be administered over a very short space of time. For SIR-Spheres microspheres, 90% of the radiation is delivered over just 11 days.
“That’s very important, because you don’t want the radiation ongoing for a long time in the body. What you want is to hit that sweet spot between enough time to have a therapeutic effect on the cancer tumours, but not so long as to damage the healthy liver tissue.”
Sirtex’s SIR-Spheres microspheres are agnostic to the particular type of cancer, meaning any cancer that spreads eventually to the liver, even if it has originated in another area of the body, can be treated by the product.
Major Markets
The company now has regulatory approvals in most of the major markets around the world, and has conducted an enormous amount of clinical research in the space, more so than any other Interventional Oncology company.
“Some of our clinical studies have shown good results in terms of quality of life for patients, less toxicity, less side-effects versus other systemic chemotherapeutic agents.”
When these results are analysed further, it is clear for healthcare professionals to recognise substantial differences between Sirtex Medical’s SIRT treatment and the major chemotherapeutic treatments.
With its global business continuing to expand, Sirtex deals with a string of different regulatory conditions across the countries it works in, many of them offering reimbursement approvals, these being national coverage by a healthcare provider.
“We’re in over 40 countries now with regulatory approvals, and also reimbursement approvals across private and public payers. In some markets we have a bit of reimbursement, in others we have full coverage and reimbursement, but that’s country specific.”
In France and Spain, for example, the company receives reimbursement by the government for metastatic colorectal cancer that has spread to the liver. Similarly, in the US, there is coverage available, as is the case in several other countries.
The business is certainly performing well worldwide. Introducing the product onto the market back in 2002, the company has generated $234m in 2017 alone, coming out with an underlying net profit of $42.4m.
The company now has regulatory approvals in most of the major markets around the world, and has conducted an enormous amount of clinical research in the space, more so than any other Interventional Oncology company
Sirtex will look to expand its market in 2018 by growing in the area of Interventional Oncology. This is an area that includes any form where the physician needs to intervene to eradicate a tumour, and can come in different modalities.
“As we branch out and consider mergers and acquisitions, the particular market segments we’re going to focus on are areas where we have core competencies and capabilities, and the resources that have those skills in those market segments.”
This means that, if the company were to look at mergers and acquisitions in the coming year, it is likely that it would be targeting the segments of Interventional Radiology and Interventional Oncology. Now with the proposed acquisition of Sirtex by Varian, there is even greater scope to accomplish these goals under a combined structure.
Business Strategy
Sirtex has recently introduced a new mission statement and group corporate strategy, designed to improve the quality and longevity of patients’ lives by providing innovative interventional oncology solutions.
“What we are trying to do is to have a multi-faceted strategy,” Mr McLean explains, “which we’re now implementing, and that strategy has several operational components, and four primary areas of organic expansion.”
These four areas are concerned with geographical expansion, new segments within existing geographies, reimbursement and broadening indications. There is also a marketing element, which looks at improving Sirtex’s differentiation from its competitors.
“Finally, we’ll also look to target new revenue streams through targeted Research & Development and acquisitions. We’re positioning ourselves for the future with a new focus on becoming a more efficient business, with better business processes.”
By lowering staff numbers and opening a new manufacturing facility in Germany, the company has increased efficiency, as well as moving closer to the customer in Europe, the Middle East and Africa, ensuring quicker delivery of the product.
“One part of our organic growth strategy that we’re excited about is developing new business segments within existing geographies, and one example of this is that we’re leveraging the trend of healthcare moving outside of the hospital in the United States.”
This change has seen Sirtex build up several partnerships in what is known as the Office Based Laboratory (OBL) segment. The company has assisted in getting licences for several OBLs where patients have already been treated, and more are scheduled.
“This therapy does have a lot of long term growth potential,” Mr McLean says. “Today we estimate that out of the total available market, the countries which we currently have regulatory approval in, we’re only accessing roughly 5% of the available product.”
This means that, as Sirtex moves closer towards market saturation, the potential for long term growth is significant. The company estimates that the market itself is growing somewhere between 8-12%, presenting a real opportunity for growth.
“So not only do you have an under-penetrated market,” Mr McLean explains, “but you have a growing market, so we find those two factors very advantageous for the outlook of the business.”
The growth of the market also offers further global opportunities. So far the company is present in countries across Europe such as Germany, Italy, Belgium and the UK, as well as in Canada, the United States, Singapore and Australia, amongst others.
“We really are all across the world, and all across those markets there’s still a long way to go to bring the referring medical physicians an increased awareness that this therapy exists and have a higher level of patient referrals to this therapy.”
Part of the company’s success in these countries has come from the reimbursement it has gained from private and government healthcare providers, an arrangement which significantly boosts the uptake of the therapy.
“Like all innovative therapies, SIR-Spheres microspheres is not cheap. So getting reimbursement—whether that be public or private—is essential to our business growth and success.”
Another element of the company’s business strategy relies upon the high margins on the product, which are at about 85%, providing the company with the opportunity to invest in more R&D, along with promotion, education and raising awareness of the product.
“Over the years, many medical products have come under significant pricing pressure,” Mr Mclean adds. “Our pricing has been relatively stable. If we were to look back to 2008, in the United States, reimbursement has increased from $12,600 per dose up to $16,716.”
Year-by-year pricing has remained stable, and even in some cases grown a little. The same trend can be seen across Europe and Asia, meaning the product has fared significantly better than many other medical products and devices, where price pressure still exists.
“Overall, every year the volume’s going up and the pricing is remaining stable. In the vast majority of cases, you compare SIRT and the costs of that, versus being on a programme of chemotherapy, there’s less side-effects and it’s cheaper.”
The business remains a highly profitable one, and is actively seeking to become more so. At the end of the last fiscal year, the company had $118m in cash and no debt, and it continues to generate extremely strong levels of cash.
“We’ve cut back on some non-core R&D initiatives,” Mr McLean explains, “and now that the major clinical studies have reported out over the last twelve months, we are also spending less cash, so that cash generation should actually be enhanced moving forward as well.”
In addition, Sirtex has made two significant moves over the last twelve months to reward its shareholders. The first was a share buyback for $30m, and the second was a significant dividend payment.
“We’ve rewarded shareholders and given back to them. We don’t have a dividend policy or a buyback policy, but we’ll review what we do in the future against the backdrop of our strategy and how we want to use our cash.”
Going forward, acquisitions will form an important part of the company’s overall strategy, but there will also be several other areas of the business that will receive increased focus, giving a rounded approach to the coming year’s activities.
Rebuilding Confidence
Despite the ongoing success and growth of Sirtex Medical, Mr McLean is the first to admit that the company experienced a tough time in 2017, finding itself up against several significant challenges.
“We’ve had multiple leadership changes in our US market,” he explains. “We’ve had leadership changes across our European and Asia-Pacific markets, and a number of our major clinical studies failed to reach their primary end points.”
In addition to these concerns, the company has recently appointed a new Chief Medical Officer and has had to deal with an investigation by ASIC for alleged breaches in continuous disclosure obligations—an investigation which is now finalised and in the past.
“In addition, we experienced a decline in our growth, missed our guidance and had class action lawsuits against us. So all of that has led to a marked deterioration in the share price and a significant loss of investor confidence.”
Despite these trying events, Mr McLean is happy to say that the company is rebuilding the trust and confidence lost over this period, with staff rallying around Sirtex and its important product to help it out of these difficult times. This turnaround culminated in late January, when the Board of Directors of Sirtex unanimously recommended the company be acquired by a large, US medical device company specialising in oncology called Varian Medical Systems, Inc.
Proposed Acquisition by Varian
The proposed acquisition by Varian via a Scheme of Arrangement values Sirtex at A$1.6b and the all-cash offer of $28 per share represents a 49% premium to the closing share price of Sirtex prior to the announcement. The transaction, if approved, is expected to complete in late May.
Mr McLean was excited by the potential of the combined businesses moving forward. “Varian employs approximately 6,500 staff globally, had 2017 sales of US$2.7b and has a market value of approximately US$12b. It is a leader in developing and delivering cancer solutions. Sirtex has a significant focus on the medical oncology and interventional radiology market, so the ability to leverage those additional relationships means the business synergies are potentially quite significant.”
When asked about the financial markets response to the deal, Mr McLean commented “It’s fair to say the investor and analyst response to the proposed acquisition has been overwhelmingly positive. The price Varian are prepared to pay to acquire Sirtex is greater than 50% above the consensus analyst 12 month price target for the stock, and is very attractive based on commonly used transaction multiples, such as price to earnings, and enterprise value to sales and EBITDA. We remain hopeful that once the Scheme Booklet is available to all our shareholders for review, they will see the merits of the deal proceeding as much as we do.”
Dow Wilson, the Chief Executive Officer of Varian, said “Sirtex is a highly complementary strategic fit with our existing solutions for the treatment of cancer. We are excited by the opportunity to expand Sirtex’s business and continue to provide physicians and patients around the world with smart, efficient, and high-quality care.”
Mr McLean concluded “I really want to thank all the staff of Sirtex for their contributions and for their faith in the business,” he adds, “because we are rebuilding the business, which has been absolutely recognised by Varian and together we are obviously going to do well in the future.”
