Best and worst Australian companies named

By JIM EAGLES

New Zealand consumers have again contributed mightily to the creation of wealth on the Australian sharemarket last year.

Most of the biggest moneymakers in the Australian Wealth Creators Report for 2003, produced by international consultancy Stern Stewart, have significant interests on this side of the Tasman.

The rating of the top 150 Australian companies is based on Stern Stewart's analysis of the growth in their market-value-added plus their net operating profit after tax during the 12 months to June 30, 2003.

Top of the list was Rupert Murdoch's News Corporation, which at that stage still controlled about half New Zealand's newspapers, via its controlling stake in INL, and still owns most of Sky Network TV.

Stern Stewart reckons Murdoch created an extra A$11.7 billion ($13 billion) in wealth for his shareholders during the year.

That basically involved a partial recovery in the share price after News had destroyed a massive A$35.8 billion in the previous year.

But the company still fell A$7 billion short of covering its cost of capital during the year and, according to Stern Stewart, has destroyed a grand total of A$47 billion in shareholder wealth over the past three years.

Murdoch's coffers will since have been boosted by the sale of INL's publications to Australian media rival Fairfax for A$1.2 billion.

Fairfax, as it happens, did not fare so well in the wealth-creation stakes last year, destroying A$145 million, on top of the A$198 million lost the year before.

Two successful de-mergers, BHP's spin-off of its steel arm, and the separation of sugar producer CSR and US-focused building products company Rinker, took third and fourth places in the wealth-creation stakes.

BHP and its renamed spin-off BlueScope Steel, of which the Glenbrook steel mill is a part, between them created an extra A$2.9 billion for their shareholders last year, on top of the A$5.3 billion created the previous year.

The split of Rinker and CSR, which owns New Zealand Sugar, boosted shareholder values by A$2.8 billion, a big improvement on the A$226 million decline the previous year.

The Australian banks, almost all of which have arms in New Zealand, mostly continue to create vast amounts of wealth.

Westpac was fourth on the latest list, creating an extra A$1.9 billion, on top of A$4.7 billion created in 2002.

Right behind was St George, which has set up New Zealand outlets in partnership with Foodstuffs supermarkets, having created A$1.5 billion last year to go with the A$3.5 billion created the year before.

ANZ Bank, which now owns New Zealand's National Bank, was 36th on the list, with a more modest gain of A$219 million, but that follows the impressive A$5 billion generated the year before.

Kerry Packer's Publishing & Broadcasting, which has been expanding its television and publishing interests in New Zealand, was another top wealth creator with A$844 million.

Graeme Hart's Burns Philp, which has since taken over its much bigger rival Goodman Fielder, also rated highly, creating A$478 million.

Transtasman liquor giant Lion Nathan cleaned up its more Australian rival Foster's in the wealth-creation stakes.

Lion created A$473 million, having produced A$346 the previous year, while Foster's flushed away A$643, to go with the A$467 it destroyed the previous year.

As might be expected, the New Zealand connection is also very strong among Australia's top wealth destroyers.

The title of wrecker of the year for 2003 goes to global support services company Brambles.

Brambles, which operates its CHEP, Recall and Cleanaway subsidiaries in New Zealand, destroyed a massive A$7.8 billion last year, on top of a A$2.1 billion drop the year before.

Second place in the table of shame went to Rio Tinto, which owns 79 per cent of the Tiwai Pt aluminium smelter near Bluff, assessed as destroying A$3.8 billion.

The banks also feature prominently in the list of wealth destroyers, proving that running a bank is not necessarily a licence to print money.

Commonwealth Bank of Australia, owner of ASB Bank, took third place on Stern Stewart's list of wealth destroyers, having cost shareholders A$3.3 billion during the year.

National Australia Bank, owner of the hugely profitable Bank of New Zealand, was 10th, having destroyed just under A$1 billion.

Qantas has had a dramatic fall from grace. It took fifth spot on the 2002 wealth creators' list, having generated A$2.3 billion for its shareholders. This time it is fifth on the wealth destroyers' list, having cost its shareholders A$1.9 billion.

By another measure, the smallest companies on the list gave the most bang for the buck.

Top of that list was drug and biotech company Chemeq, which as at June 30 had created an amazing A$18.91 of wealth for every A$1 invested in it.

By contrast, Stern Stewart calculates that APN News & Media, owner of the New Zealand Herald, was the worst performer, having lost 3Ac for every A$1 invested by shareholders, ahead of giant Telstra (minus 2Ac).

Top wealth creators

12 months to 30 June 2003 (all figures in A$million)

* News Corp 11,656

* BHP & BlueScope 5292

* CSR & Rinker 2761

* Westpac 1886

* St George 1446

* Coles Myer 1336

* Boral 923

* PBL 844

* AGL 813

* Amcor 652

Top wealth destroyers

12 months to 30 June 2003 (all figures in A$million)

* Brambles 7797

* Rio Tinto 3825

* CBA 3271

* CSL 3108

* Qantas 1948

* Aristocrat 1824

* Southcorp 1759

* Patrick 1071

* Mayne 983

* NAB 974

Monday: The top wealth creators and destroyers in New Zealand