Private business has changed

Another year has ticked over, and Business News has published its latest Book of Lists, a hard-copy snapshot from our Data & Insights section of the website.

I always appreciate looking at which companies make up the top 20 or so leaders in the various fields we follow.

Even better is the opportunity to compare 2022 with 2002, as I have kept a full set of these books from my time with Business News. Every list has its nuances.

The professions, especially markets such as law, have changed significantly as the globalisation of that sector has made it harder, with rare exceptions, for geographically isolated firms to thrive.

Our exporters list now has far greater weighting to iron ore, including locally founded groups such as Fortescue Metals Group and its like.

But few sectors have changed to the extent the list of Western Australia’s private companies has. In part, that is because we are focused on the structure of the businesses – being in private hands – rather than what they are doing.

But there are other reasons.

Generational change is a factor when you look back 20 years and, given the broad concept of private ownership, the makeup of our economy also dictates some element of private success or failure.

Back in 2002, the top private companies based in WA were dominated by civil and residential construction and motor vehicle sales.

The outliers in that group were media magnate Kerry Stokes’ holding company, Australian Capital Equity, food group Peters & Brownes and the Stowe family’s former South West coalminer Griffin Group.

Not an iron ore miner among them, although much of what these businesses did was driven by the profits and salaries earned by locals employed or associated with the iron ore business.

Then, as now, the Perron Group sold plenty of Toyota Land Cruisers to miners in the north.

For the record, we don’t get Australian Capital Equity data any more, but its biggest public holding is Seven Group Holdings, from which it earned about $90 million last financial year, suggesting it would not be in the top 10 (from a revenue perspective).

Fast forward two decades and spot the difference.

Notably, the car industry has almost disappeared from the top of this league table except for Perron, which still controls the WA Toyota franchise but has an ever-growing portfolio of shopping centres around the country.

Given the time periods we are talking about, perhaps it is not surprising that the top five has completely changed, with three of these entities either directly involved in iron ore mining or a significant beneficiary of that sector, thanks to the considerable royalties generated.

Despite the slight double up, given Hancock Prospecting is the biggest owner of Roy Hill Holdings, they are separate businesses and would dominate the top two positions, even if none of Roy Hill’s revenue was double counted in the pockets of Gina Rinehart’s private vehicle.

Tattarang, the family company of the Forrest family, invests in a wide range of areas, but the dividend flow from Fortescue makes it closely aligned to the fortunes of iron ore.

Mining services business Byrnecut is another resources-focused player, although its Kalgoorlie origins mean its core areas of expertise have traditionally been in gold and base metals (mainly underground).

It is worth noting that the Multiplex name has been restored to the Perth construction skyline by its Canadian owner, Brookfield, which acquired the business after the Roberts family’s decision to partially list the business led to them losing control.

The biggest outlier in current top five is VGW Holdings, formerly Virtual Gaming World, a technology business that offers online gambling-style products around the globe.

I always hope that having a tech stock in this field is a sign of things to come, not an aberration.

After that, we see residential housing maintaining a strong foothold at the top of the private ownership ladder.

This is unique to WA, where big unlisted companies dominate home building.

The other odd ones out are interesting. Wilson Parking is a major regional business loosely based in Perth due to its origins here as the parking business started by failed 1980s entrepreneur Laurie Wilson.

Finally, there is Navitas, a global education business that was a much smaller private company in 2002 (then IBT Education, listed in 2004 and was, unusually, privatised by founder Rod Jones in 2019).

I like the make-up of the top 10 in 2022 more than the 2002 version.

It seems to me that we have capitalised on our success more.