Wright pays $172m dividend

Perth-based Wright Prospecting has confirmed its status as one of the country’s most profitable companies, lifting its annual earnings on the back of higher iron ore prices and paying a whopping $172 million dividend to its private owners.

The company is owned by the descendants of the late Peter Wright, who was Lang Hancock’s business partner.

Its main source of income is iron ore royalties, including from a deal negotiated with Rio Tinto in the 1960s that continues paying to the present day.

Its share of income from the Hancock & Wright partnership increased to $125 million for the year to June 2019, according to its annual report lodged with the Australian Securities and Investments Commission.

The report also disclosed that mining royalty income increased to $110 million.

Wright's directors attributed this to higher average commodity prices despite a fall in shipment volumes during the year.

The company’s biggest expense is legal fees, as it continues to fight a series of disputes with Mr Hancock’s daughter Gina Rinehart. It has also had legal disputes with Rio Tinto over its rights to various tenements.

Its legal expenses dropped last year to $3.1 million, from $5.6 million in the prior year.

The net result, after paying a big tax bill, was a profit of $160 million, up from $127 million previously.

The dividend of $172 million was almost exactly in line with the dividend paid in the previous year.

It indicates the company is prepared to eat into its retained profits to maintain the high dividend payments. Its retained profits at the end of June 2019 were $37.9 million.

The company paid $173 million in dividends in FY18, $106 million in FY17 and a massive $423 million in FY16.

Wright Prospecting is jointly owned by AMB Holdings and VOC Group.

AMB is owned by Peter Wright’s daughter Angela Bennett, while VOC is owned by Leonie Baldock and Alexandra Burt, the daughters of the late Michael Wright.

Its directors include chairman Ian Cochrane (who is also a director of VOC) and Michael Ashforth (who is a director of AMB).