In financial services, many firms are focused on providing bottom-line value to their clients. What most of them forget is how to properly communicate that value.
A good PR strategy has a greater impact on the bottom line than most firms realise. This book shows how to put in place an effective PR program in the financial services industry, and how great communications can add significant value to a firm.
Between them, Claudia Pritchitt and Leeanne Bland have over 50 years’ experience in public relations, communications, and marketing. Here, they explain the key tools needed in an effective communications strategy as well as why plain English is imperative in the jargon-heavy world of financial services.
The higher gold price has boosted margins for gold miners who likely have further to run, while cost-of-living pressures make retailers more risky investments, according to Phillip Hudak and Matt Griffin, co-portfolio managers of the Maple-Brown Abbott Australian Small Companies fund.
Following the recent earnings season, Mr Hudak says there are good opportunities in select gold companies.
“The gold price has done very well over the past two years, despite rising real bond yields which are normally not good for gold. However the impact of bond yields has been offset by high levels of central bank buying and we see value emerging for gold producers,” he said.
“Those companies that are producing gold right now, such as Perseus and Genesis Minerals, and can take advantage of the “scarcity value”, have outperformed the gold price. Combined with easing cost inflation, profits have been boosted.
“This contrasts to gold developers, which have underperformed the gold price, as they are seeing higher funding costs, project cost blowouts and delays,” said Mr Hudak.
The US dollar gold price is currently trading near all-time levels at US$2,500/oz, having risen over 20 per cent year-to-date.
“We believe there is still significant upside in select gold companies, especially those companies that are increasing their resource base and have low-cost options to bring gold production on, including Spartan Resources, as well as those developers that have high-quality well-funded projects, such as De Grey Mining,” said Mr Hudak.
Greater merger and acquisition (M&A) activity is likely to continue in the gold sector into 2025, with higher gold prices triggering greater activity. With exploration activity still limited, this has led to a depletion of gold reserve, helping to boost margins for producers. Coupled with a lengthening and less certain permitting process for new mines, this is causing producers to pursue a ‘buy over build’ strategy to growth.
“Gold sector M&A activity is heating up, for both global and local small cap gold miners,” Mr Hudak said.
“It is now becoming cheaper to buy gold miners rather than build gold mines. We’ve seen Newmont and Newcrest get together, Goldfields has been active and that has flowed through to Australian small cap gold companies, including Ramelius taking a stake in Spartan, Perseus taking a stake in Predictive Discoveries, and Red 5 and Silverlake Resources merging.
“We believe this M&A activity will continue, particularly at the smaller end of the market.
“We also liked the aged-care sector, which has benefited from increased government funding in areas like wages. On top of that, the government is supplementing growth of labour,” Mr Hudak said.
Matt Griffin, co-portfolio manager of the Australian Small Companies fund, said other companies they like includes storage real estate investment trusts (REITs), with the ageing population and housing turnover driving demand for greater storage.
In contrast, other REITs such as industrial and office have seen valuations decline and are trading at significant discounts to Net Tangible Assets (NTA), especially office and industrial REITs, while gearing levels are rising.
According to Mr Griffin, the market is implying valuations are not at the bottom yet, and earnings growth will be very hard to come by for the majority of small cap REITs in FY25.
“The one bright spot we see is storage, with structural factors driving a more favourable outlook than other REITs, with downsizing, an ageing population and housing turnover driving demand for storage space, and storage REITs have a strong pipeline of growth,” said Mr Griffin.
