Veil lifted on wealth

There may be a host of rags-to-riches tales among the executives enjoying the share price spoils of their publicly listed entities, but it’s a storyline that also extends to the private sector.

The WA Business News Wealth Creators list includes many individuals – Peet Ltd’s Tony Lennon, Automotive Holding Group’s Vern Wheatley, and Emeco Holding’s Laurie Freedman among them – whose wealth was hidden from view prior to the public listing of their business.

By listing their business, not only has their wealth become public knowledge, they have provided a reference point for valuing privately owned competitors.

For instance, Vern Wheatley’s 37 per cent stake in his automotive business is valued at $187 million.

AHG is by far the biggest car retailer in Western Australia with annual sales of about $1.5 billion.

But other big players in the industry – John Hughes, Alf Barbagallo and Brian Gardiner – are also enjoying WA’s boom times.

John Hughes Group generates annual sales of just over $300 million from his Mitsubishi, Hyundai and Volkswagen dealerships in Victoria Park.
Meanwhile, Brian Gardner Motors Pty Ltd, run by the founder’s son John Gardner, generated annual sales of $144 million and a net profit of $2.3 million in the year to June 2005, according to the most recent accounts lodged with the Australian Securities and Investments Commission.

And according to the website of Alf Barbagallo’s Barbagallo Group, his company has annual sales over $350 million, which includes sales from his Sunseeker motor yacht business.

Last month, Mr Barbagallo told WA Business News the marine market was more buoyant than he’d ever previously experienced.

“Our sales within WA have more than doubled within the past two years and we believe our market share will continue to grow,” Mr Barbagallo said.

The stock market’s bull run has been a source of wealth for many in recent years, particularly for those in the thick of it – the stockbroking firms.

Euroz Ltd has a market value of $175 million with directors Peter Diamond, Andrew McKenzie and Jay Hughes each laying claim to a stake worth $16.7 million.

The firm last year played a lead role in raising $903 million for its clients while its St George’s Terrace competitor, Patersons Securities, raised $827 million.

Patersons’ three largest shareholders – Aaron Constantine, Michael Manford and Murray McGill – all enjoyed the spoils of a $1.5 million in dividends after the firm’s net profit surged 42 per cent in the 12 months to June 30 to $5.1 million.

Patersons’ revenue for 2005-06 jumped 15.5 per cent to $77.1 million.

Meanwhile, Euroz’s net profit in the same period climbed 45 per cent to $45.2 million, and revenue climbed 25 per cent to $56 million.

The public gained great insight into the value of Gordon Martin’s Coogee Resources after it planned a $380 million initial public offering in November.

The IPO valued the Coogee Chemicals’ subsidiary at $798 million and, had it gone ahead, Mr Martin would have emerged with a 31 per cent stake in the business valued at $250 million.

However, the float failed largely because institutional investors thought it was overvalued but, even when taking a conservative view, Mr Martin has amassed sizeable worth at Coogee Chemicals.

Mr Martin remains the majority shareholder in Coogee Chemicals, which generated annual sales of nearly $200 million last financial year and is planning to spend $48 million buying Nufarm Ltd’s 80 per cent interest in the Nufarm Coogee joint venture, which operates two chemical plants.

In 2005-06 the joint venture generated an operating profit contribution to Nufarm of $9.1 million.