James Thomson Editor

James Thomson is the editor of BRW. Previously he was editor and publisher of SmartCompany and a senior editor at Business Spectator. He writes regularly on Australia's wealthiest entrepreneurs and has deep expertise in small business and the mid market.

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How the rich invest: A closer look at the private players

Published 21 August 2013 21:58, Updated 23 August 2013 14:25

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How the rich invest: A closer look at the private players

Visy Industries, owned by Anthony Pratt and the wider Pratt family, is easily the biggest business on the Top 500 Private companies list.

The Top 500 private companies list lets you look behind some of the biggest closed doors in the Australian business community.

While we can follow the business exploits of James Packer and Frank Lowy through their Australian Stock Exchange-listed companies, it is harder to track the performance of the business empires run by the likes of Anthony Pratt, Lindsay Fox and Harry Triguboff.

While BRW’s Rich 200 lets us see how these private company owners are tracking compared with their wealthy peers, the data from the Top 500, collated by IBISWorld, lets us see how they are performing against the wider economy. And this year’s results are a little underwhelming.

Rank Company Rich Lister Revenue $m Change %
8 Visy Industries Anthony Pratt 4,100.00 5.1
15 Linfox Lindsay Fox 2,500.00 6.8
16 Hancock Prospecting Gina Rinehart 2,382.32 -1.1
21 The Good Guys Andrew Muir 2,052.00 2.6
27 PFD Food Services Richard Smith 1,350.00 2.9
29 Meriton Apartments  Harry Triguboff 1,305.00 7
37 Manildra Group  Dick Honan 1,150.00 9.5
47 Competitive Foods  Jack Cowin 1,059.72 11
49 BB Retail Capital  Brett Blundy 1,051.00 2.5
53 Spotlight Morry Fraid & Zac Fried 985 4.7

The 10 largest Rich 200-associated businesses on the Top 500 list – a group that includes firms owned by Gina Rinehart, Jack Cowin and Anthony Pratt – have produced average revenue growth, of around 5 per cent, with only Gina Rinehart’s Hancock Prospecting seeing revenue fall, by just 1.1 per cent.

But the wider Top 500 list produced total revenue growth of 8 per cent, although that is skewed by the dominance on the list of Australia’s big super funds, which receive a government-mandated revenue boost each year.

Nonetheless, the IBISWorld figures suggest the private businesses of the Rich 200 have been treading water.

Visy Industries, owned by Anthony Pratt and the wider Pratt family, is easily the biggest business on the list, with revenue of $4.1 billion, up 5.1 per cent on the previous corresponding period. The company would have been affected by the slowdown in the Australian manufacturing sector and will hope the recent drop in the Australian dollar will boost growth this year.

Some customers of Linfox, the transport giant owned by Lindsay Fox, would also have felt some $A pain and given the sluggish conditions in the wider economy, Linfox’s result – revenue up 6.8 per cent to $2.5 billion – is relatively impressive.

The same can be said for Harry Triguboff’s apartment empire Meriton (revenue climbed 7 per cent to $1.3 billion) and Dick Honan’s Manildra Group (sales growth of 9.5 per cent to $1.15 billion.)

But the most impressive growth numbers were posted by Jack Cowin’s Competitive Foods, which is best known as the name behind the Hungry Jack’s fast-food franchise. Revenue there rose 11 per cent to $1.06 billion, says the IBISWorld estimate.

This sales increase will be welcome news for Cowin, who recorded flat sales and falling profit last year, as rising wage, utilities and franchise royalty costs ate into Competitive Food’s margins.

The tiny fall in revenue at Gina Rinehart’s Hancock Prospecting won’t worry her too much; the $2.4 billion in revenue the company is generating, without even operating its own mine, shows the incredible value of the royalties generated by her first-class iron ore tenements in the Pilbara.