Australian business figures to watch in 2022
Who will be making their mark on business in the year ahead? If the past 12 months have taught business one thing, it is to expect the unexpected. See the seven top picks and one roughie.
If the past 12 months have taught business one thing, it is to expect the unexpected. The shape of Australia’s business landscape was redrawn with fintech powerhouse Afterpay becoming the target of the biggest takeover through a $39bn deal with Jack Dorsey’s Square (now Block), BHP finally dropped its dual listing and iron ore peaked at $US233/tonne. There are few signs of this year slowing down. These are the seven people in business to keep a close eye on this year and of course, there’s one roughie.
Philip Lowe
For the economy there is no more powerful driver than interest rates. We’ve seen this through the pandemic, when the Reserve Bank governor slashed the cash rate to an emergency low and hundreds of billions of dollars was pumped into the economy through a massive bond buying program. As well as keeping the economy firing this has helped push the sharemarket to record levels while seeing the housing market turn red hot. At some point this free money is going to run out and inflationary pressures are set to break away. Some turning off the tap will start next month where the central bank will consider bringing to an end its $4bn bond buying program, although this might be tapered if Omicron looks more disruptive than anticipated. Lowe has shown through the pandemic he is prepared to act big to prop up the economy and he will change tack when the facts do. So while he has insisted the conditions for a rate rise won’t be met until 2023 he has acknowledged he will start hiking if inflation gets away. “We are still a fair way from that point,” Lowe said just two weeks out from Christmas. But it looks like the market might be calling his bluff. Currently the bond market is betting the RBA will move sooner, and is now pricing in at least two rate hikes in 2022, with the first in July and a further one in October.
Gina Cass-Gottlieb
Ahead of formal approval from the state governments, leading competition lawyer Gina Cass-Gottlieb is set to take on the chairman role of the Australian Competition and Consumer Commission in March for a five-year term. The appointment marks the first female leader of the influential competition agency, but it also signifies a tilt back towards having a lawyer in the top job, compared to the economics background of the previous two appointments – including current outgoing chair Rod Sims. This is an acknowledgment that the critical competition battles are set to be determined in the courtroom. Cass-Gottlieb founded law firm Gilbert + Tobin’s competition practice in the early 1990s, building up a one of the biggest competition practices and a formidable reputation as the “go-to person” for complex matters. For most of this time Cass-Gottlieb has been on the other side of the courtroom against the ACCC representing some of the biggest companies in Australia, so her approach to litigation will be a test for the agency. The ACCC has some big battles on its plate including a push to overhauling merger laws, a battle with the big tech through the digital platform services inquiry and continued monitoring of the nation’s electricity market which is being up-ended as more renewables enter the system.
Andrew Forrest
There’s little chance that a list like this fails to mention multi-billionaire Andrew Forrest. Towards the end of the year Forrest was everywhere. Popping up onstage with US President Joe Biden at Glasgow’s COP26 to publicly duelling with Brazilian processing giant JBS over a tilt for Tasmanian salmon farmer Huon. Then just days ago he emerged as a major shareholder in Bega Cheese. But it is his core empire Fortescue that is now facing a test. Forrest’s ambition of turning Fortescue into a global green energy powerhouse, by signing of string of MOU’s around the world without proven technology is starting to put iron ore-focused investors off-side. In mid-December Fortescue’s well-regarded chief executive Elizabeth Gaines flagged her resignation, although she will remain on the board. Forrest has said the yet-to-be-named incoming CEO is expected to put Fortescue’s green energy subsidiary Fortescue Future Industries front and centre of the company’s decision-making even as a $4.8bn Iron Bridge mine development is underway. While iron ore is funding a green shift, this may be forced to change if the Chinese economy comes under further pressure.
Hamish Douglass
There is little doubt Magellan executive chair Hamish Douglass had a terrible finish to the end of the year. Amid scrutiny about the separation with his wife, the Magellan co-founder and executive chairman faced the loss of one of his most valued and long-term clients: the UK funds house London-based St James’s Place Wealth Management, which pulled a $23bn mandate – or 20 per cent of Magellan’s funds under management. Compounding this was the very sudden exit of long-time Magellan chief executive and Douglass supporter Brett Cairns, while the flagship Magellan fund has suffered a period of underperformance since November last year after Douglass missed the extent of the Covid economic recovery and China’s crackdown on tech stocks. In coming months Douglass is likely to face pressure to cut fees for his institutional clients while rebuilding confidence in the brand. The first test will be as early as this week when investors see if there were any more major fund outflows during December.
Jayne Hrdlicka
Virgin Australia boss Jayne Hrdlicka is facing the biggest test this year as arch rival Qantas gets its mojo back from the trauma of being grounded for much of the past 20 months. Under new owners, Virgin is being rebuilt after its collapse of 2020. The question is: into what sort of airline? Virgin is tilting away from the corporate dollar, targeting leisure travellers and small and medium-sized business customers. As the economy returns, Hrdlicka is not one to leave cash on the table and it remains to be seen whether it can build out its 33 per cent market share for Virgin’s private equity owners Bain Capital. It is currently in the process of moving the fleet size back to 84 from 54 and is restarting Pacific-based international destinations. Airlines are massively cash hungry and even small decisions from scheduling to route decisions can have big implications for cashflow. Hrdlicka, who previously worked for Qantas boss Alan Joyce knows how aggressive that airline will respond to competitive threats. Meanwhile smaller airline Rex could prove problematic on some routes. There is still a sector risk, with borders potentially closing and a distinct lack of confidence in the travel market. A year of certainty for Virgin and Hrdlicka will give Bain a better road map of how long it will need to start seeing a return to its investment and whether it would move sooner than later for a selldown. Hrdlicka recently told staff Bain will be a major shareholder for “years to come”.
Alexis George
In terms of challenges Alexis George has her work cut out turning around the most tarnished of Australia’s blue chips. George, the former deputy CEO of ANZ, took charge of AMP in August, just as Sydney was entering its lockdown and has been faced with a mammoth task. The wealth manager has been in a strategic funk since nearly imploding at the 2018 Hayne financial services royal commission and suffering a string of body blows since. AMP’s George will need to show consistency as she undertakes a massive rebuilding strategy while overhauling the problematic corporate culture across the 172 year old wealth group. She also has challenge stemming the cash outflows in AMP’s funds and undertaking a recruitment drive for AMP’s depleted executive ranks. In December AMP shares touched record lows of just 91c each but ticked up it outlined the $428m sale of its infrastructure debt platform. George has said she plans to resist asset sales, but could this be the year AMP exits its banking business.
Richard Murray
It’s rare for a CEO to jump from one listed company to the other in the same industry, yet that is what former JB Hi-Fi boss Richard Murray has done in the dramatic switch to Solomon Lew’s Premier Investments. Granted the move by Murray is in a different segment – moving from selling electrical goods to fashion — but Murray is going to need every bit of his retailing instinct to keep the momentum going. Premier is a house of brands which includes Peter Alexander, Just Jeans, Smiggle and Portmans. While over 90 per cent of Premier’s sales are from Australia, the focus is in Asia and Europe where sales are growing at a fast pace. Murray will need to refine Premier’s online proposition, balance out the store network and negotiate fast-changing fashion trends. Murray turned JB Hi-Fi into a retailing powerhouse, steering it through multiple lockdowns and overseeing a record high share price. Premier and JB Hi-Fi are roughly the same size in terms of market cap. The key being Premier comes with Solomon Lew, a very hands on chairman.
Roughie pick: Shayne Elliott
The thing about running a big four bank is the longer you are there, the closer your retirement day is. ANZ chief executive Shayne Elliott is now the longest-serving of the big four bank bosses, having taken the top job on New Year’s Day of 2016. Elliott’s mandate was to primarily de-risk ANZ following its breakneck Asian expansion, sell problematic assets and bring the lender back home. This has largely been done and in addition Elliott was able to steer the lender through a royal commission and then the Covid pandemic. All of Elliott’s contemporary banking rivals have been pushed out before their expiry date. This includes Ian Narev at CBA after an Austrac legal action; Andrew Thorburn at NAB following the Hayne Royal Commission and Brian Hartzer at Westpac – also after an Austrac tangle. With newish ANZ chairman Paul O’Sullivan now comfortably installed and well-regarded retail banking boss Mark Hand seemingly waiting in the wings; there’s also lending losses tracking at low levels and there has been a recovery in the share price. But there have been headaches in the bank’s underperforming mortgage business which is still in need of repair. Given all that, could this be the year that Elliott prepares to sail off into the sunset?
johnstone@theaustralian.com.au
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