The Total Shareholder Return survey highlights not just the star performers but also the listed companies that have been consistent poor performers.
Among Western Australia’s 50 largest listed companies, automated ticketing company ERG stands out once again for its poor performance.
The company rose to dizzy heights during the tech boom but over the past one, three and five years, it is showing large negative returns.
The only good news for ERG shareholders is that the company has been through a massive restructuring over the past six months, with a new board and management, major capital raisings and a refocused business strategy, so hope remains that ERG will prosper.
Gold and tantalum miner Sons of Gwalia has a very patchy record.
It also has had a changing of the guard, with company founders Peter and Chris Lalor stepping aside in favour of a new board and management team.
Managing director John Leevers will be releasing the results of a strategic review at the end of August and is widely expected to announce the closure of some mining operations and big financial write-offs.
In anticipation of bad news, the company’s share price has tumbled from $2.76 at the end of June to about $1.40 presently.
Another prominent Western Australian company with a poor track record is engineering group Clough, which historically has failed to convert large order books into consistent profits.
The company last year recruited highly regarded chief executive David Singleton, who has proceeded to extensively restructure the business.
However, Clough’s order book remains at a low level and, as a result, the share price has also declined.
Futuris owns a diverse mix of companies, including rural services business Elders, timber company Integrated Tree Cropping and auto parts maker Air International.
It has troubled the market in the past by failing to deliver predictable, transparent results, pursuing opportunistic strategies and announcing unexpected write-offs.
However, its latest results for the year to June 2004, featuring a 31 per cent jump in underlying earnings to $62.8 million, have been well received.
Independent market analyst Peter Strachan, principal of StockAnalysis, takes a positive view.
He believes Elders, which was the group’s earnings powerhouse last year, and ITC are poised to deliver better results in future and expects Air International, which has struggled recently, can turn around its performance.
Mr Strachan also believes current chief executive Les Wozniczka has refined the company’s strategy.
“It has suffered from a label of being a speculative investor with so much of its earnings coming from one-off transactions and entrepreneurial activities,” he said.
“I think the business model is now much clearer for people to understand.”
- ERG: -65.8%
- Sons of Gwalia: -31.3%
- Clough: -19.4%
- Futuris: -11.2%
- Amity Oil: -7.7%