All eyes on Carroll
Next nine months seen crucial for new CEO
THE NEXT NINE MONTHS may be crucial for Canadian Cynthia Carroll, who is officially now the hands-on CEO at Anglo American. “I think she has to be fairly active to prove that she’s not just the caretaker manager,” says Peter Major, a hedge fund manager at Cadiz.
There’s remnant chitchat in Johannesburg that Anglo may fall to a hostile takeover and much may depend on Carroll’s ability to impose her will and direction, the chitchatterers say. Broadly speaking, she needs to finish off predecessor Tony Tra- har’s restructuring work and pare away any management layers that might prevent her excelling operationally.
Simon Thompson, the Anglo executive believed to have been a candidate for Trahar’s job, announced his resignation effective from 13 April. The commonsense view is that he quit rather than being pushed. But there may be some truth to a London Sunday Telegraph report on 25 March that Carroll may well take the axe to Anglo’s bureaucracy. Some Anglo shareholders would welcome that.
“I’d like to see a cleaner
structure, more control of cash flow and a more agile, leaner organisation,” says Henk Groenewald, a fund manager at Coronation Fund Managers.
“Getting to know the business would be key,” says Matt Brenzel, a fund manager at African Harvest. “But I think the listing of Mondi would be the number one priority on her list.”
A more distant third on the “to do” list is to oversee the successful empowerment of Anglo Platinum, Anglo’s 75% subsidiary company. Major reckons a little less hostility could go a long way. “Barry Davison (former Anglo Platinum chairman) was fairly aggressive,” says Major. He believes Carroll could “change it down a gear”. By giving a little, Anglo Platinum could empower itself quicker.
“She may get what she wants,” says Major of Carroll. “Remember, Government is also under pressure having to deal with foreign perceptions.”
And were 2007 to be a stellar year for Carroll she could perhaps flex Anglo’s underused muscles by dabbling where Trahar was loathe to go: in the merger and acquisition industry.
“Anglo seems to have been in a down- sizing mode when most of the comparables have been doing the opposite,” says Brenzel. “By contrast, Anglo has tended to look for organic growth and most of its capex
“I think the listing of Mondi would be the number one
priority on her list.”
has been in Anglo Platinum.” He wonders whether Anglo will spread its wings.
Groenewald says he’d prefer Anglo to focus on organic growth. “Merger and acquisitions for their own sake don’t necessarily provide value,” he says.
“Anglo has a good long-term pipeline of projects but short term the production growth isn’t great.”
Both African Harvest and Coronation are underweight Anglo, preferring BHP Billiton, which it believes is a cheaper option on the resources cycle. “Anglo has run a bit,” says Brenzel.
Could flex underused muscles. Cynthia Carroll