ANNIVERSARY SPECIAL: The ranks of WA’s largest public companies have changed dramatically over the past two decades, but Wesfarmers has been a constant near the top. This article is part of a special series to mark Business News' 25-year anniversary.
ANNIVERSARY SPECIAL: The ranks of WA’s largest public companies have changed dramatically over the past two decades, but Wesfarmers has been a constant near the top. This article is part of a special series to mark Business News' 25-year anniversary.
Long-term continuity is a rare thing at public companies.
While the tenure of chief executives has been getting shorter over the years, in many cases even the companies they work for don’t survive for very long.
This is apparent from a look back at the largest ASX-listed companies in Western Australia, using data from the BNiQ Search Engine.
Of the top 30 in 1999, only nine continue to operate as Perth-based ASX-listed companies.
The largest of these is Wesfarmers, which evolved from a farmers’ cooperative to a highly successful conglomerate with turnover last year of $67 billion.
The diversity of Wesfarmers’ conglomerate structure has been one of its strengths, allowing the group to buy and sell multiple businesses over the years in pursuit of its overarching goal of delivering good returns to shareholders.
The group will shrink in size after its demerger of Coles Group is completed, but is still likely to rank as WA’s largest company.
Another notable feature of Wesfarmers is the consistently long tenure of its chief executives.
Incumbent Rob Scott is only the eighth chief executive in the group’s 104-year history, with all those people having come from within the organisation.
Engineering contractor Monadelphous has an even more impressive record of continuity.
John Rubino has led the company since 1991, initially as chairman and managing director before taking a non-executive role in 2003.
Rob Velletri succeeded Mr Rubino, having already been with the group for 13 years when he was promoted to managing director.
The group’s stable leadership has been matched by its consistent performance, with its revenue growing from just $135 million in 1999 to $1.74 billion currently.
Other companies that have consistently ranked among the state’s largest are Woodside Petroleum, shipbuilder Austal and mining services contractor Ausdrill (see table).
It’s instructive to see that the state’s largest companies have extraordinarily diverse origins, which shows there is no one path to commercial success
Mining group South32 was created as a spin-out from BHP Billiton in 2015.
It was given most of BHP’s small, unwanted assets, but with a sharp focus on its diverse operations and a lean cost structure, it has been a success.
South32 is now WA’s second largest company by revenue and third largest by market value, after Wesfarmers and Woodside.
Fortescue Metals Group was effectively a startup when Andrew Forrest took control in 2003, but is now the ‘third force’ in iron ore with annual sales of $9.4 billion.
Automotive Holdings Group was a successful family business for many years but has grown rapidly since listing on the ASX in 2005.
With operations across Australia, it has annual revenue of $6.4 billion.
Looking back to 1999, when Business News started tracking the state’s largest public companies, a lot of the big names have disappeared.
Grocery wholesaler Foodland Associated was ranked number one in 1999, with annual revenue of $4 billion.
Led by chief executive and dealmaker David Fawcett, Foodland led a consolidation among the independent grocery wholesalers operating in each state at the time.
The big winner from that process was ASX-listed Metcash, which evolved from NSW-based wholesaler Davids.
Metcash bought Foodland in 2005, giving it a national presence from which it has not looked back.
Another big wholesaler was IAMA, which served the rural market.
It was bought by Wesfarmers subsidiary Dalgetys in 2001, after the Australian Competition and Consumer Commission approved the deal, despite the two companies being among the largest rural merchandise wholesalers and retailers in Australia.
A list of WA’s largest public companies in 1999 includes several businesses that are still operating, but under different ownership.
Engineering firm Clough operated for many years as a family business before listing on the ASX.
It is now a subsidiary of South Africa’s Murray & Roberts and continues to be one of Perth’s major engineering groups, with 787 staff.
Bankwest has been through multiple ownership changes since it was privatised in 1994.
Now a wholly owned subsidiary of Commonwealth Bank, it remains the state’s largest banking group.
SGIO Insurance and West Australian Newspapers are other businesses that are no longer publicly listed but continue to trade under new ownership.
