In a rare interview, Perth magnate Stan Perron spoke to Mark Beyer about his extensive business interests and future plans.
In a rare interview, Perth magnate Stan Perron spoke to Mark Beyer about his extensive business interests and future plans.
IN the lobby of Stan Perron’s East Perth office sits a lovingly restored 1964 model Toyota 700 sedan.
It was the first model Mr Perron sold after he took on the Western Australian rights to Toyota motor vehicles 40 years ago.
The lucrative Toyota distributorship has helped make Mr Perron one of Australia’s wealthiest people, but he hasn’t forgotten where he started.
In his office Mr Perron keeps the original handwritten books recording the number of cars he sold in the early days.
From 25 cars in 1964 and 53 in 1965, Toyota now sells nearly 19,000 vehicles a year in WA. And Mr Perron takes a cut from each one.
He also has a $1.2 billion property portfolio (see table) generating rental income of $80 million a year and a $150 million share portfolio.
With this kind of wealth, the quietly spoken Mr Perron could have put his feet up many years ago, but he still spends three days a week at the office.
One of the key tasks for the 81-year old has been a restructuring to ensure the longevity of the group.
To achieve that goal, Mr Perron has implemented two notable changes.
The latest was the appointment of prominent company director Trevor Eastwood to the board of Perron Group.
“I’m getting older, I’m 81, there is going to come a day when I won’t be here, so we’ve brought in Trevor [Eastwood] as a commercial person,” Mr Perron said.
He said the group would remain private but aimed to operate more like a public company.
“With the advent of Trevor on the board, we are now involving the board to a much greater extent,” said Ian Armstrong, Perron Group’s long-serving chief executive.
“We’re just starting that process now and that’s why we brought on Trevor to assist us in formalising our relationship with the board.”
Mr Eastwood joins Mr Perron, Mr Armstrong, Mr Perron’s daughter Elizabeth Perron DeMarte and two non-executive directors, Mallesons Stephen Jaques partner Larry Iffla and West Perth accountant Ross Ledger, who have had limited involvement to date.
As well as the board changes, another important move to ensure the group’s longevity was formalising its distribution agreement with Toyota.
“Until about three years ago it was only a handshake,” Mr Perron said.
“It was formalised only because I was getting older.
“Now our subsidiary, Prestige Motors, is the distributor for Toyota in WA.”
Mr Perron’s ability to lock in a formal long-term agreement with Toyota speaks volumes about his relationship with the Japanese motoring giant.
“They have been very loyal and I’ve been good to Toyota over the years,” Mr Perron said.
“I helped them get established in Australia and they’ve rewarded me by giving me the franchise.”
Mr Perron adds that his WA operation consistently outperforms Toyota in the rest of the country.
For instance, Toyota has been the number one brand in WA for 11 of the past 13 years, while nationally it has been number one only three times.
Mark Lauren, formerly general manager, was recently elected to the board and appointed managing director of Prestige Motors.
Mr Perron’s early business career was in his home town of Kalgoorlie.
Croesus Mining chairman Ron Manners, who also grew up in Kalgoorlie, tells of Mr Perron’s business acumen in his book Never A Dull Moment.
In 1958, Mr Perron purchased the largest and most powerful ‘scraper’ in the world at the time.
“Contrary to the beliefs of others in WA that it could not be employed successfully, his foresight paid immense dividends,” Mr Manners writes.
Mr Perron’s business extended to Perth, where it completed the earthworks for the 1962 Empire Games stadium.
He subsequently sold the earth-moving business to Thiess, which among other things held the rights to distribute Toyota vehicles in WA.
Mr Perron remained as a manager and was given the task of finding a buyer.
“They said: ‘Before you leave us, you need to appoint a Toyota distributor’. But nobody was interested,” Mr Perron said.
“Les Thiess said to me: ‘You better keep it yourself, you might get a dollar out of it one day’.”
Mr Perron’s first serious move into property, in the early 1960s, was along Great Eastern Highway.
“At one stage I bought every vacant block between the Causeway and the airport along Great Eastern Highway,” he said.
Mr Perron also invested in a number of ill-fated mining ventures with the late Lang Hancock.
However one investment has paid off handsomely.
In return for lending £500 to a cash-strapped Mr Hancock in 1959, Mr Perron secured a 15 per cent share of royalties from the Mt Tom Price iron ore mine.
Mr Perron could have had a 30 per cent share if he advanced £1,000, but was wary of sending good money after bad, as there was no guarantee the royalties would flow.
But they have, in abundance, and Mr Perron has been receiving about $2 million each year for nearly 30 years.
The group’s property arm is run by Mr Armstrong, who was manager of Phoenix Park shopping centre when it was bought by Perron Group in 1973.
The group’s investment philosophy is based on some very simple principles.
It seeks a mix of capital growth and income, and diversifies both geographically and sectorally.
“We have primarily office buildings and shopping centres. They are the areas where you can invest large sums of money,” Mr Armstrong said.
“We only ever look with a 10-year horizon, so we certainly don’t look at the short term.
“We don’t just buy and sell for trading purposes.”
Mr Armstrong said the group also sought to hold a small number of large properties.
“We try to keep the operation of our business as simple as possible, he said.
“With large multi-million dollar assets, you can employ a few high-calibre people to look after them.”
The group directly employs only 11 people.
It deliberately “sticks to its knitting”, a theme reinforced by some unsuccessful investments.
For instance, Mr Perron said he “dabbled a bit in venture capital but didn’t do very well”.
He started investing in equities about five years ago, outsourcing the funds to professional managers, but has been hit by the weak market during 2001 and 2002.
“We’ve got an equities portfolio of about $150 million but we don’t attach much importance to that,” Mr Perron said.
The group also steers clear of the inner-city apartment market.
“It’s a market that we’re not familiar with, it’s more of a trading market,” Mr Armstrong said.
Its latest investment was a 50 per cent stake in Central Park office tower, bought from the Government Employees’ Superannuation Board.
Looking ahead, the group has no immediate plans for further purchases.
“We will continue doing what we have always done. We’ve got a premium quality property portfolio and we will continue to be very selective,” Mr Armstrong told WA Business News.
