12/10/2021 - 13:11

Wright Prospecting's profit jumps to $273m

12/10/2021 - 13:11

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Privately-owned Perth company Wright Prospecting has posted yet another extraordinarily large annual profit as it reaped the benefits of the booming iron ore market.

Wright's main source of income is iron ore royalties.

Privately-owned Perth company Wright Prospecting has posted yet another extraordinarily large annual profit as it reaped the benefits of the booming iron ore market.

Its net profit after tax increased by 45 per cent to a record $297 million for the year to June 2021, according to financial statements lodged this week with ASIC.

This reflected a 44 per cent lift in revenue to $435 million, with virtually all revenue coming from iron ore royalties and its share of income from the Hancock & Wright partnership.

As the company does not have any operations and has minimal expenses, the profits flow straight through to its low-profile shareholders.

It paid $274 million in dividends during the financial year, up from $199 million in the prior year.

The company had $67 million in retained profits as at June 30 but has since paid a further $52 million in dividends.

Wright Prospecting was established by the late Peter Wright, who is best known as the business partner of the late Lang Hancock.

As a result of agreements they struck in the 1960s, their families have benefited ever since from lucrative iron ore royalties paid by Rio Tinto.

Wright’s two shareholders are AMB Holdings, representing the interests of Mr Wright’s daughter Angela Bennett, and VOC Group, established by his late son Peter Wright.

VOC is now owned by Peter Wright’s daughters, Leonie Baldock and Alexandra Burt.

Wright Prospecting’s largest operating expense is legal fees, which increased slightly to $4 million.

Its biggest ongoing legal dispute concerns ownership of the Hope Downs tenements in the Pilbara and the entitlement to associated royalties.

This litigation has 18 parties, including private companies Hancock Prospecting and DFD Rhodes, which also receive multi-million dollar royalty payments each year.

Wright Prospecting was also involved in Supreme Court litigation initiated by Peter Wright’s third child, Julian Wright, who had claimed a larger share of the family fortune.

Julian was bought out by his siblings in 1987 for $6.8 million.

In a ruling handed down in July, Supreme Court Justice Rene Le Miere accepted Julian’s claim that his siblings had engaged in fraud and deceit and had breached their fiduciary duties as executors of Peter’s estate.

However, Julian’s claim failed because of the terms of a $70 million settlement his two children subsequently negotiated with their grandfather’s estate.

He is believed to be appealing the ruling.

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