Mike Anghie on Europe trip as bloodbath brews for APM company that boasts Mark McGowan, Nev Power & Ben Wyatt

IN ANOTHER WORLD AS STORM BREWS His company’s share price might have been tanking but that wasn’t enough to ruin a magical European Christmas adventure for APM chief executive Michael Anghie and his family. According to social media posts by his wife Sandy Anghie, the well-heeled family spent several weeks over the festive period exploring the museums, markets, public art and grand architecture of some of the great imperial capitals. In Vienna, they described visiting five of the city’s 100 museums during a visit which confirmed it was “easy to see why it’s ranked the most liveable city in the world year after year”. “And it’s even more magical at Christmas with beautiful light and Christmas markets at squares throughout the city,” according to one of the posts. The family spent New Year’s Eve roaming the streets of Prague — “considered the most beautiful city in Europe” — exploring the Charles Bridge, the Prague Castle and the National Gallery at Schwarzenberg Palace. In one picture, Mr Anghie could be seen wearing a stylish Gucci beanie and matching scarf while he and his wife posed with the historic Tyn Church visible in the background. Then it was on to London, where they covered 98km on foot over seven days through the historic and diverse neighbourhoods of the British capital. “From the colour and creativity of Carnaby Street in Soho and central markets in Covent Garden, to regal Regent and Bond streets in Mayfair and the history of Fleet Street and the Tower of London,” one post said. Another highlight was the Balloon Museum at Old Billingsgate which has already more than three million visitors. Mr Anghie said he was still doing work while he was away on holiday. Ms Anghie is a former Perth councillor who failed in a recent bid to unseat popular Lord Mayor Basil Zempilas. JUST CAN’T WYNNE WHEN SHARES NOSEDIVE The alarming fall in APM’s share price has savaged Rich Lister Megan Wynne’s holding in the company she founded and floated on to the stock market. While she is believed to have pocketed a substantial sum on the sale of a big piece of her business to a private equity firm in 2007, most of Ms Wynne’s wealth is derived from the 34.5 per cent APM stake she retains with her husband, IVF pioneer Bruce Bellinge. The holding was briefly worth $1.1 billion when APM listed in 2021, but it has since shrunk in value to about $245 million. APM chief executive Michael Anghie is down about $60m on his holding of 21.7m shares. Mr Anghie, who has been with the company since leaving accounting and consulting firm EY in 2018, was a big winner from the November 2021 initial public offer, selling about $40m of shares into the float. Madison Dearborn, the US private equity group, however, was the biggest beneficiary of the sale, banking more than $500m as it reduced its holding to about 30 per cent. The company behind WA’s biggest share market float barely two years ago is in meltdown, giving up 41 per cent of its value in one day in an extraordinary rout that has stripped millions off the fortunes of its high-profile backers. APM, which makes most of its money by providing employment, aged care and disability services under government contracts, lost nearly $500 million in value on Thursday after management warned investors of a bigger-than-expected slump in profit. The company’s shares ended the day’s trading at a record low of 78.5¢, off 54¢, and have now lost nearly 80 per cent of their value since they were sold in a highly promoted record WA public offer at $3.55 a share in November 2021. The profit fall, together with APM’s woeful share market performance, have raised doubts over its management and leadership, with one of the investment banks that floated the Perth-based group warning of “more headwinds than positives”. APM is headed by chair and major shareholder Megan Wynne, an occupational therapist who founded the company in Applecross in 1994, and connected Perth insider and former consulting firm boss Michael Anghie its chief executive. However, it also has high-powered support from former Fortescue Metals Group boss Nev Power and one-time WA treasurer Ben Wyatt, who are directors. Former premier Mark McGowan is also a member of APM’s advisory board. Wednesday’s investor update revealed an expected 35 per cent fall in first-half profit, quantifying a shock profit warning issued at November’s annual general meeting that sent the stock tumbling under $2. The shares had seemingly bottomed at $1.115 in mid-December and were staging a recovery before being sent into freefall by Wednesday’s update. The forecast profit slump is far worse than expected by investors and prompted some stock analysts to pull their buying support for the shares. Investment bank UBS, which helped bring APM to the stock market in November 2021, downgraded its recommendation on the the stock from a buy to neutral, saying the company was facing a challenging operating environment. Another firm, Jefferies, knocked it down from a buy to a hold, while Perth-based Euroz Hartleys downgraded it to a speculative buy from a buy. The update showed a sharp deterioration in margins during the six months to December 31, with the profit fall coming despite APM lifting revenues for the period by $300m. APM has expanded quickly since Ms Wynne and her husband Dr Bruce Bellinge sold 60 per cent of their business to a private equity firm seven years ago, buying more than 20 businesses around the world to give the group an international footprint. It now helps more than two million people a year from 1600 sites in 11 countries with a 14,500-strong workforce. However, some of its more recent purchases have yet to fire up and the company says low unemployment has reduced the uptake of its crucial job assistance programs and made it harder to fill roles in its health business. There is also investor concern that it will lose contracts under a review of the Workforce Australia employment system. Wednesday’s updated commentary mirrored that delivered to the AGM, with APM saying earnings had been hurt by lower job placements into flagship Australian and British employment contracts with the government, tightness in the allied health employment market and higher interest costs. As a result, while revenue was seen jumping to $1.14b from $854m for the same half-year in 2022, underlying net profit was forecast to fall from $85.4m to $55m, 33 per cent below analyst expectations. Underlying earnings before interest, tax, depreciation, and amortisation are predicted to fall from $167.4m to about $148m, 21 per cent below consensus forecasts. APM insists profit will pick up before June as its allied health business grows, it secures more contracts in the US and integrates the big Equus Workforce Solutions it bought in 2022. The West emailed questions to Ms Wynne about the share price fall, the profit warning and Mr Anghie’s management of APM, but it received no response. Mr Power, Mr Wyatt and Mr McGowan also failed to respond to telephone queries. US private equity firm Madison Dearborn, which holds about 30 per cent of APM, declined to comment. Mr Anghie rejected suggestions that APM’s dividend was at risk or that the company would have to cut back job numbers because of the weaker profit to save money. “There are no changes planned in relation to the business, its strategy or areas of focus,” he said. “The company has a stated dividend policy which has not been altered.” During November’s AGM, directors were forced to come to Ms Wynne’s support after a shareholder questioned whether she should stand down in favour of an independent chair in light of the company’s poor share performance. Director Robert Melia suggested a change would be a mistake, citing Ms Wynne’s “unrivalled knowledge and unrivalled commitment to the programs that we deliver”. Mr McGowan joined the advisory board in October last year. He was sighted in Canberra within weeks of that appointment, where he was keeping a low profile in his post-politics role as a business adviser and lobbyist. APM is a service provider under the Federal Government’s National Disability Insurance Scheme. Mr McGowan’s appearance coincided with the meeting of a Senate estimates committee that was about to quiz top NDIS bureaucrat Rebecca Falkingham and her team. A parliamentary review of Workforce Australia has recommended that the Government take back a more direct role in providing services. Though the Government is still reviewing what changes it will make, observers expect it to create a new body that will disrupt the businesses of private operators such as APM. Despite saying when he resigned from politics that he was exhausted, Mr McGowan has quickly amassed a lucrative roster of advisory roles with BHP, Chris Ellison’s Mineral Resources and Bondi Partners, in addition to his APM job. Mr Anghie, a former WA head of accounting and consulting firm EY, sold 11.53 million shares in the float, allowing him to pocket almost $41 million. He still retains just over 21 million shares — placing him among the company’s biggest investors — currently valued at $17 million.