Corporate and finance PR group Cannings saw three of its most senior executives leave en masse last week following a clash with major shareholder and co-founder Graham Canning about the future direction of the company. Aspiring communications holding company Issues & Images paid Cannings partners about $6m for 49% of the company last year. Partner Ross Thornton, CEO Mark Gold and finance director Jim Kelly have started their own shop, Kelly Gold Partners, with Thornton expected to join the company later next year after serving out his competition clause. At least two of the departed executives are believed to be working for NSW Opposition leader John Brogden in the lead-up to the NSW State election. Thornton and Kelly created some friction in the company last March following their involvement with BrogdenÕs usurping of then NSW Opposition leader Kerry Chikarovski. Canning and Thornton were at odds on this sort of work with Canning steadfast that the company should not take on political briefs, particularly when it is heavily skewed to corporate and finance work. ÒItÕs a matter of looking at the direction you want your firm to go and Ross and I had differing views,Ó he says. ÒMine was that we should remain apolitical. The strength of our agency is in corporate finance. WeÕve got a good little public affairs unit but itÕs really corporate finance. There was a parting of the ways caused by differing views as to the direction of the firm and RossÕs ongoing role in the firm.Ó Industry speculation had the company facing a 50% crash in revenues this year although Canning told Reputation revenues were about lineball over 2001 and were now starting to lift. ÒA lot of transaction work really fell away immediately after September 11 and itÕs taken a long time to come back. WeÕre seeing in the last three months itÕs coming back. There are a few things in the pipeline. So our numbers are pretty stable for the year. 2002 over 2001 is tracking about the same.Ó Canning and Martin Dubell were forced to buy up ThorntonÕs 12.5% stake in the business following his departure but Canning says there has been no client fallout resulting from the exodus. ÒIt really hasnÕt impacted much because there werenÕt a lot of clients that had to be handed over,Ó he says. ÒWe havenÕt lost any clients as a result. We didnÕt have any of that because they werenÕt working on anything major. Certainly our growth has come off but margins in the past couple of months have improved and will improve further now they have gone.Ó Fee income for the business is believed to be around $4.5m although Canning would not confirm the figure. He says consultant numbers have dropped from 17 to 12 currently but new hirings will be made in the new year. ÒWe probably wonÕt replace all three in one go but weÕll be making some new appointments in the new year,Ó he says. Paul McIntyre
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