Grant Ellis is the 2019 Chief Financial Officer of the year.
Grant Ellis, CFO of Restaurant Brands, says being a good chief financial officer means having a lot of passion — not just for the business you work in but also for the community around it.
It is that passion and commitment which has helped Ellis — the chief financial officer of Restaurant Brands — take out the award for the University of Auckland Business School Chief Financial Officer of the Year.
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Ellis has been CFO of Restaurant Brands since the company listed in 1997. Over that two-decade timeframe he has overseen the evolution of the company from a local franchise operator into a business with global operations.
Restaurant Brands now operates the KFC, Pizza Hut, Taco Bell and Carl’s Jr franchises in New Zealand, KFC franchises in New South Wales, Australia and Taco Bell and Pizza Hut franchises in Hawaii.
This year it expanded the Taco Bell franchise into New Zealand and Australia, opening its first stores with plans to spend at least $65 million expanding it to 50 to 60 across Australasia over the next five years.
On top of that it was partially taken over by Mexican Company Finaccess.
Finaccess now owns 75 per cent of Restaurant Brands which remains listed on the New Zealand stock exchange.
Ellis says the biggest challenges for the business in the last 12 months have been getting through the partial takeover of the business and building its offshore acquisitions.
“We have been getting through a takeover bid, which was a pretty substantial amount of work, of course as the CFO you are right at the centre of that activity.
“We also of course have been building our offshore acquisitions and bringing them into the Restaurant Brands stable and that has also involved quite a bit of work to go through the process of making the company bigger and better,” he says.
Ellis is no stranger to hard work and challenges.
Starting with the company at the time of its initial public offer, Ellis had to set up all the accounting systems from scratch, an entire department, establishing funding lines, and all other financial and administrative aspects of a public company’s operation within a three month time frame.
Since then he has been actively involved in overseeing the financial aspects of the business including the acquisition and building of the Starbucks Coffee and Carl’s Jr franchises, the acquisition and conversion of the Eagle Boys pizza chain, the entry (and exit) from the Australian Pizza Hut business, the resurgence of the KFC brand and the expansion into the Australian (KFC) and Hawaiian (Taco Bell and Pizza Hut) markets.
Judge Jonathan Mason said not only had Ellis run the financials of Restaurant Brands ably for over 20 years, he had been a key part of the management team that had driven its growth strategy and is well-respected by the markets and his peers.
“The success of that has resulted in Restaurant Brands delivering top decile shareholder returns of over 30 per cent per annum for the past 10 years.
“Grant helped lead the significant and transformational off-shore acquisitions in Australia and the USA that have all been backed by well thought through integration plans, exceeded objectives, and have generated additional shareholder returns of over 40 per cent in the last year for Restaurant Brands.”
Mason said of all the capable finalists, Ellis has had the most sustained contribution to the strong shareholder returns at the company he worked for. Restaurant Brands has been one of the leaders in the New Zealand share market.
“Grant is an example of a highly experienced strategic CFO that has been integral to superior performance for the Restaurant Brand shareholders.”
Ellis has a Bachelor of Commerce and an MBA from the University of Auckland and is a chartered accountant. He was a finalist for the Deloitte Top 200 CFO of the year awards in 2017.
He says good leadership is a combination of factors.
“First, I think you have got to have an ability to delegate and ensure you trust and allow your team to do what they need to do without you hanging over their shoulders.”
Ellis believes the key is also keeping things simple.
“The term I use is: can a simple country boy understand what is going on — and certainly some of the challenges we have had with accounting standards in recent times have sort of validated that approach.”
And being clear about expectations. “I think a long with the ability to have people come with you is the expectation around deliverables and making sure everybody is very clear about what I want and when I want it.”
Restaurant Brands is already forecasting its profit growth to be up 10 per cent in the 2020 financial year as it continues to roll out new stores and look at buying others.
The fast-food operator has seen margins improve at its local KFC stores, which account for half of New Zealand revenues, but shrink at its Pizza Hut chain.
Its net profit after tax for the 28 weeks to September 9 was $20 million, down $0.4m or 2 per cent on the first half of last year.
The fast food operator’s earnings before interest, tax, depreciation and amortisation were $72.6m — up $3.4 million or 5 per cent up on the same period a year earlier.
Meanwhile, sales from its Pizza Hut business in New Zealand were down 7.1 per cent, attributed to competitive pressure and new food delivery companies entering the market.
Finalist: Philippa Harford, Infratil
Philippa Harford’s deep expertise on complex accounting and tax issues came to the fore when she took up the finance reins at infrastructure investor Infratil in 2015.
Infratil is a complex company with major investments in renewable energy, airport, transport, data and connectivity and social infrastructure and in the past year acquired a major stake in Vodafone New Zealand.
The $3.4 billion deal saw Infratil partner up in a joint venture with Canadian infrastructure and property investor Brookfield Asset Management.
Already, Infratil has begun repeating benefits from the investment with the company reporting last month that its first half operating earnings were up 1.7 per cent with a two-month contribution from Vodafone New Zealand offsetting weaker returns from Trustpower and its Longroad Energy interests in the US.
Excluding businesses sold in the past year, underlying earnings before interest, tax, depreciation and changes in financial instruments rose to $289.4 million in the six months ended September 30, from $284.6 million a year earlier.
The company reported a net profit attributable to shareholders of $56.4 million from $58.5 million a year earlier.
The firm raised $400 million during the half-year for its $1.03 billion share of the Vodafone acquisition.
It’s been a busy two years for Infratil with the business refocusing its portfolio to put more emphasis on renewable energy and digital connectivity, while also exiting investments that had not worked strategically or which didn’t offer sufficient growth potential.
In May, it sold its 50 per cent stake in its student accommodation concession at the Australian National University, and its Snapper bus card business.
In September, it completed the sale of NZ Bus and its 80 per cent stake in Perth Energy.
Judge Jonathan Mason said that Harford had been integral to Infratil’s acquisition and divestiture strategy over the past 10 years including the large partial purchase of Vodafone this year.
“These efforts have been rewarded in the market with the Infratil share price rising over 40 per cent in the 12 months ending in September.”
Mason said Harford was a highly respected CFO in the view of the market, her colleagues and the board.
“Philippa runs the finance function with a high level of competency handling complex tax issues that arise in both New Zealand and foreign jurisdictions with skill.”
Prior to the CFO role she was deputy CFO of Infratil and head of tax for Morrison & Co.
She joined Morrison & Co in 2009 from Vector where she was head of tax.
Harford also worked for several years providing tax advisory services at PricewaterhouseCoopers, in New Zealand and offshore.
Finalist: Rob Hamilton SkyCity Entertainment Group
Rob Hamilton is not only a dab hand when it comes to the numbers but has had an increasing impact on improving the fortunes of SkyCity through working with the chief executive on strategy.
Hamilton joined SkyCity Entertainment Group in October 2014 after more than two decades at broking and investment firm First New Zealand Capital, recently renamed Jarden.
He led the investment banking team for First NZ for 12 years and had advised SkyCity as part of that role.
Since joining the casino operator, he has helped improved its capital structure, execute non-strategic assets in Darwin and Auckland and raise $450 million for improved cash flow to fund reinvestment in the Adelaide casino, and the New Zealand International Convention Centre.
In April it reached a long-term concession to operate its Auckland carparks until 2048 to Macquarie Principal Finance for $220m — a price higher than analysts were expecting.
It also settled the sale of its Darwin property which raised $201.6m in a deal first announced last year.
Judge Jonathan Mason said Hamilton was a leading example of a strategic CFO who not only leads a capable finance function but also works alongside the CEO on key strategic initiatives.
“Rob is especially strong at supporting the CEO in executing key decisions to improve the value levers at SkyCity on capital structure and capital allocation.”
Mason said SkyCity had made significant progress in the last year at selling assets that were underperforming or non-strategic and redeploying the proceeds into assets that are at the centre of SkyCity’s expansion strategy.
“Rob also has faced important challenges as CFO on shareholder activism, CEO succession, and leading operational improvement initiatives.”
Mason said Hamilton was highly respected by the market, the board, and other SkyCity stakeholders.
SkyCity is now facing challenges ahead as it looks to re-build the new international convention centre after the major fire which damaged it in October.
Uncertainty remains over when the convention centre will now open for business and what the flow-on effects of those delays will be.
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