Burswood-based automotive supplies cooperative Capricorn Society has continued its rapid growth with sales revenue jumping 16 per cent to $537.6 million in the year to June 2005.
Burswood-based automotive supplies cooperative Capricorn Society has continued its rapid growth with sales revenue jumping 16 per cent to $537.6 million in the year to June 2005.
Capricorn was founded in Perth in the 1970s and has grown to become the largest independent automotive parts-buying cooperative in the Southern Hemisphere.
It has achieved non-stop growth every year since the mid 1980s and doubled sales since 2001, to the point where it would rank as one of Western Australia’s 10 biggest private companies, according to the 2005 WA Business News Book of Lists.
Despite the big increase in sales, Capricorn recorded a sharp fall in net profit last year.
However this was largely by choice, as it reflected a near doubling in rebates paid to members to $8.6 million, as well as higher operating costs.
The net profit after tax was $1.1 million, down from $2.8 million in the previous year.
The entire net profit in each year has been paid out to shareholders in the form of dividends.
Chief executive Trent Bartlett said growth had been evident “across the board” last year.
“This result shows that the cooperative has been successful in providing its owner members with added value for their investment and commitment to the cooperative,” he said.
To support its growth, Capricorn boosted its capital base last year by issuing new shares worth $6.4 million.
This was partly offset by the buyback of shares worth $2.2 million.
“The strong end-of-year financial position that Capricorn Society finds itself in is truly an example of the cooperative model working at its optimum,” Mr Bartlett said.
Capricorn was formed by a group of Golden Fleece service station proprietors in Perth and still generates nearly one quarter of its sales in its home state.
Its first interstate expansion was to NSW in 1987 but that state contributes only 12 per cent of sales despite its large population.
Capricorn has a stronger (per capita) market position in South Australia, Victoria and Queensland.
Capricorn went international in 1997 when it expanded to New Zealand, which now accounts for 11 per cent of sales.
Capricorn expanded again in 2000 when it moved into the South African market. The African operation contributes only 2.5 per cent of sales and still trades at a loss.
In total, Capricorn employs 120 staff across the three countries and services more than 10,000 members and 1,200 suppliers.
Its membership comprises automotive repairers, panel beaters, auto electricians, service station and general workshop proprietors.
Members make a one-off investment in Capricorn ($500 in Australia) and then receive instant credit with its registered suppliers.
They also benefit from the better prices Capricorn is able to negotiate with suppliers.
For suppliers, the benefits offered by Capricorn include guaranteed 30-day payment to cover all members’ purchases.
As well as diversifying geographically, Capricon has moved into new lines of business.
A major initiative in 2003 was the establishment of Capricorn Mutual, a not-for-profit organisation that offers a full range of business and personal insurance products to Capricorn members.
During the year, the cooperative provided further financial support for the mutual fund via a $1.1 million subordinated loan, taking its total support to $4.2 million.
Investing in information technology has been another major focus for Capricorn.
Last year it rolled out its proprietary Caplink software to its supplier base as a platform for future business productivity.