The sharemarket rose 15% in 2013, buoying many of the fortunes of Australia’s Rich Listers. But some have nailed their colours to the masts of more interesting companies or causes than most. Here are the four wealthy entrepreneurs you should keep an eye on in 2014 …
Craig Winkler
It’s been a few years since Craig Winkler left accounting software provider MYOB, the company he founded. Since then, he’s become heavily invested in Xero, MYOB’s leading competitor and the largest stock on the New Zealand Stock Exchange. Xero was founded eight years ago and is worth over $5 billion by market capitalisation.
So unusual is its position that Kiwi fund managers are asking for it to be stripped out of New Zealand’s leading stock indices — they say it distorts them too much! In the year to June, the accounting software firm tripled its market capitalisation, and since then its share price has doubled again. That made Winkler a very wealthy man, again. After dropping off the BRW Rich List a few years ago, he stormed back onto it, with a fortune of $275 million in June. Xero’s share price has gone up even further since the release of that list, and BRW thinks his stake in Xero alone is now worth $550 million.
That kind of growth has plenty of investors queasy. But the company’s executives are heavily invested themselves, so at least everyone has plenty of skin in the game. Xero CEO Rod Drury said last year that he thought his company was at “the beginning of a massive market shift as small businesses globally realise the benefits of connected cloud solutions”. If he’s right, Winkler’s fortune could rise even higher. Or the whole thing could come crashing down. After all, Xero has never made a profit. That doesn’t tell the whole story, but it sure does make you pause.
John and Robert Kirby
Unlike Xero, Village Roadshow is no spring chicken. Founded in 1954 by Roc Kirby, the entertainment company was one of the ASX’s top performers this year, rising 94.7% and greatly improving the fortunes of Kirby’s two sons, John and Robert, who today still own a majority of the listed company. Older brother John is the company’s deputy chairman, while Robert is its executive chairman. Their wallets have benefited not just from the company’s rising share price but equally from their tidy remuneration.
Robert Kirby was paid $2.4 million in 2013, just $3000 shy of the CEO’s salary, according to the company’s annual report. John Kirby was paid nearly $120,000 for his services as a non-executive director. In December, a company closely controlled by both Kirbys and Village’s managing director, Graham Burke, used what The Age dubbed a “legal loophole” to prevent minority shareholders issuing a first strike over the company’s remuneration report — generally speaking, executives and directors are prevented from voting their shares on their own pay at annual general meetings.
Village Roadshow today owns cinemas and theme parks (Wet’n’Wild, Sea World), and it has a hand in making and distributing movies. And it was involved in some of last year’s highest-grossing films, including The Great Gatsby, which it co-produced with Warner Bros, and The Hobbit: The Desolation of Smaug, which it distributed. But the company’s biggest earner is its theme parks. In 2014, it plans to expand its footprint into China. Village Roadshow also has a hand in several high-profile releases, such as Long Walk to Freedom, a Mandela biopic starring Idris Elba, and The Wolf of Wall Street, starring Leonardo DiCaprio.
The Kirby brothers are onto a good thing. In 2012, they were worth $330 million. In 2013, BRW pegged them at $460 million. Let’s watch how high they’ll go this year.
Mark Creasy
If you think the mining boom millions have come and gone, wait until Mark Creasy’s has his run. In March 2013, Creasy made $93 million in two weeks when his then 20.3% stake in small-cap nickel miner Sirius Resources skyrocketed in value. He bought that stake for a hundredth of the price, and when the company’s tests at Nova and Bollinger tenements returned results consistent with higher quantities of nickel in the ground than was initially expected, Sirius’s stock went from $2.06 to $4.40.
At the time, plenty of investors were bullish on the company, with RBC Capital Markets analyst Geoff Breen telling The Australian Financial Review he didn’t think the share price was unsustainable. Since then, the company’s share price has retreated to $2.12. But Creasy didn’t quit while he was ahead. In September, his investment company, Yandal Investments, bought another 600 million Sirius options, making it the owner of 75% of the total options on issue.
On largely the strength of his Sirius investments, The West Australian estimates Creasy is worth $539 million. BRW pegged his wealth at just $220 million in 2012 — with most of it coming from his previous prospecting and stakes in many Western Australian junior miners.
The British-born mining engineer initially made his fortune in gold prospecting when he pocketed $130 million from selling the Bronzewing and Jundee gold deposits in Western Australia in 1994. This deal earned him entry into Guinness World Records – it was the largest payout ever received by a prospector. Today, his investment company is as asset-rich as it is cash-poor. Early this month, financials lodged with ASIC showed Yandal Investments reported a net profit of just $26 million with just $1.78 million cash on hand, despite assets worth many times that.
Creasy told The West Australian he wasn’t worried: “As long as I am solvent and I have enough money to spend on exploration, I’m happy.” Still, like all those who make money on mining, he’s taken large risks. If they pay off, we’d have ourselves one more mining billionaire to show for it.
Clive Palmer
We’ll be seeing plenty more of Clive Palmer (pictured) — not surprisingly. The Queensland mining magnate’s electoral bid was far more successful than most expected, and now he controls just under half the swing votes the government needs to get legislation passed in the Senate. What he’ll do with those votes is anyone’s guess. He’s displayed some surprising priorities so far — like wanting to inject $80 billion into the healthcare system, as well as allowing asylum seekers to fly into Australia on a $800 return ticket, no visa required (hearings to be given upon landing, with unsuccessful asylum seekers flown back) .
But this correspondent expects the most interesting things he does will have little to do with voting. Palmer has parliamentary privilege now — and a long history of scores to settle with the Liberals. In the 1970s, when he was a student, Palmer was working his way up to being a lawyer in Brisbane. While working for the Supreme Court, he told biographer Sean Parnell he witnessed police coaxing self-incriminating testimony out of someone who was mentally handicapped. He told a junior state Liberal MP, and shortly thereafter saw himself demoted to delivering the mail. After receiving several threatening phone calls, he says he left the state in fear of his life.
He went to South Australia, where he became a leading figure in the breakaway Liberal movement — a sort of Democratic Labour Party of the political Right. But business beckoned, and he made his fortune, some of which he donated to the Liberal Party. But when Queensland Premier Campbell Newman sacked hundreds of public sector workers, Palmer revolted, donating $250,000 to a union fund for sacked public servants, vividly denouncing what he saw as the government’s “rape and pillage” of the state. These comments led to the suspension of Palmer’s lifetime membership of the Liberal Party. He resigned and founded Palmer’s United Party shortly afterward.
The point of the history lesson is this: Palmer has never engaged in politics quietly. Don’t be surprised if he uses his pulpit to hammer the government with more flair and passion than the opposition.
*This article was originally published at SmartCompany
Palmer’s contributions in parliament will be interesting circus, but will lack substance. Interesting times!
I’m sorry but the cynical in me says who are we trying to kid re. Mr Palmer. He might make some insighful negative comments about the current government, but I’ll bet a container full of dinosaur golf course decorations he’ll vote for every piece of legislation the LNP seek to pass (including Work Choices Mk2) because he knows which side of the gravy train he wants to sit on, and it’s not the left side.
Interesting information on Palmer never likely to make its way into the Murdoch press now giving him the Gillard treatment.