Forrest’s rich Fortescue returns

SPECIAL REPORT: When Fortescue Metals Group chairman Andrew Forrest received his most recent dividend cheque from the company, it brought the total paid out to entities he controls during the past five years to nearly $600 million.

Since June 2011, Mr Forrest has lifted his shareholding in the company by almost 75 million shares, according to the BNiQ Search Engine list of directors’ interest, at a price of around $340 million.

The latest purchase of 1.3 million shares in early November cost $6.9 million and put just more than a third of the company under Mr Forrest’s control.

In total, Mr Forrest made 20 Fortescue share purchases during the past five years, with the most significant parcel of 12.8 million shares in June 2012 costing $62 million.

That was when the company’s share price was $4.85.

This year, a dramatic rise in the price of Fortescue shares has more than doubled his total wealth, or at least the portion that is held in public companies.

Fortescue shares were traded at around $2.10 in late November 2015, and are worth $6.22 at the time of writing.

That put Mr Forrest’s estimated wealth at $6.5 billion, according to the BNiQ Search Engine.

Investors

However it is the income stream from dividend distributions that puts cash in the hands of investors.

The latest dividend payment, which was dated at September 5, was 12 cents per share.

With entities related to Mr Forrest controlling slightly more than 1 billion Fortescue shares, that payment was worth $124 million.

The latest final dividend followed an interim payment of 3 cents per share, bringing the company’s total payout to 15 cents per share for the 2016 financial year.

That number was much lower in 2015, however, at just 5 cents, while 2014 was the best year for distributions at 20 cents.

Across period since 2011 when Fortescue began paying dividends, an investor with one share in Fortescue would’ve been returned 60 cents in dividends.

Structure

Mr Forrest’s one-third slice of Fortescue is held through a range of vehicles.

That includes Forrest Family Investments (Peepingee Trust), Tattarang Investment Trusts, and Vertical Nominees (which has previously lent funds to Fortescue executives to buy shares).

Perhaps the best known is Minderoo Group, which is associated with philanthropic venture Minderoo Foundation.

The foundation makes its financial details public in its annual report, which for 2016 registered $24.5 million of revenue, including $1.7 million of dividends.

Minderoo does have investment interests in a range of businesses.

In agriculture, Minderoo controls Harvey Beef and Minderoo Beef, with cattle for the latter reared on Mr Forrest’s Minderoo station.

Other commercial entities within the group are the Australian Alpaca Centre, Harvest Road Group and the Australia Sino One Hundred Year Agricultural and Food Safety Partnership.

The Alpaca Centre sells clothing and homewares made from alpaca wool, with three brick and mortar shops in Australia.

Harvest Road is associated with Harvey Beef and additionally sells dairy products, while the Food Safety Partnership is a public company that runs a program called ASA100.

Its focus is on promoting trade in agricultural and food products, mostly with China.

Minderoo has shares in Poseidon Nickel, where Mr Forrest previously served as chairman.

Minderoo holds nearly 130 million Poseidon shares, about 16 per cent of the company and worth around $6.4 million.

Another entity is Squadron Resources, which in October was issued nearly 48 million shares in Impact Minerals in return for a $1 million capital commitment.

Squadron has a 7.3 per cent stake in A1 Consolidated Gold, a parcel of 19 million shares worth around $500,000.

Mr Forrest also has a stake in local uranium hopeful Vimy Resources (through Peepingee and Squadron), with 57.1 million shares giving his entities 22.5 per cent of the company.

That was diluted from 25.1 per cent in September when Vimy undertook a new share issue.

Mr Forrest also has a 6.5 per cent stake in biotech company Admedus, and no doubt holds a number of assets outside the public eye, including a property in Dalkeith.