The $6 billion rich losers club

The $6 billion rich losers clubIt’s been a rough year for Gerry Harvey.

First he was ridiculed for lashing out at online retail and calling for the Government to cut the GST exemption on imports under $1,000.

Then he had to go to the market to report less than impressive results, with Harvey Norman belted by the continuing consumer spending drought.

And last week he had to watch as the value of Harvey Norman shares hit a two-year low of $1.94. Since the start of 2011, the stock has tumbled 29% as the torrent of bad data has flowed.

The value of Gerry’s stake has dropped from $915.8 million to $602.8 million. Ouch.

Gerry might be the most prominent member of the billionaire loser club, but he’s not the only one.

In total, the 20 wealthiest Australians whose fortunes are based mainly on shares in publicly listed companies have seen their fortunes fall by an ugly $6 billion, or about 18.1%.

Given the broader Australian market is down 13.5%, these wealthy entrepreneurs have had a pretty rough year.

Here are some of the biggest losers – and a couple of surprising winners. (All share prices were taken at 12pm on August 5).

Gordon Merchant

Billabong International founder Gordon Merchant no longer has a day-to-day role in his company, but as a board member he has been part of a team that has presided over a worrying slump in profit. You name it, Billabong has suffered from it – poor retail sales around the world, disruptions from earthquakes in New Zealand and Japan, and rising costs. As a result, Billabong shares are down a whopping 40% and the value of Merchant’s stake has dropped from $276.8 million to $165.5 million.

Ian Norman

The little-sighted Ian Norman is the co-founder of Harvey Norman has seen the value of his stake drop 29%, from $515.2 million to $368 million. A quick note about Gerry Harvey – despite the fall in the value of his Harvey Norman stake his other interests would ensure he remains a member of the billionaire club.

Chris Morris

Computershare founder Chris Morris has stepped away from the day-to-day operations of his company, but remains a board member. It’s been a tough year for Computershare, due mainly to reduced corporate activity around the world. The value of the company’s shares has fallen 31%, pushing Morris’ stake down from just under $600 million to $415 million.

Tony Poli

Aquila Resources chief Tony Poli started the year with a stake in his company worth $1.1 billion. But a series of problems – including poor weather, which has cut coal production, and a dispute with joint venture partner Vale – has seen the company’s share price tumble 41% this year. Poli’s stake is now worth $625.8 million.

James Packer

James Packer’s losses have been minimised by the relatively strong performance of Crown Limited shares, which are flat over 2011. But it is worth looking at the performance of a few of his other investments. Shares in Consolidated Media have fallen 31% since the start of the year and shares in Ten Network are down 34% since the end of the year. The fresh excitement Packer showed about the media industry late last year may be waning.

Kerr Neilson

The wider woes of the market have weighed heavily on South African-born money manager Kerr Neilson, who has seen the value of his stake in Platinum Asset Management fall 27% since the start of 2011 to $1.2 billion.

Ivan Glasenberg and Steve Kalmin

Glencore chief executive Ivan Glasenberg and chief financial officer Steve Kalmin roared onto the rich list earlier this year when the trading giant floated in London and Hong Kong in early May. But the post-IPO high didn’t last long – Glencore’s shares are down 21% since listing. That’s wiped $1.9 billion off the value of Glasenberg’s stake (it’s now worth $7.1 billion) and reduced Kalmin’s stake from $583 million to $462 million. However, the pair won’t crystallise their losses any time soon – under the terms of the IPO they cannot sell for about five years.

And the winners…

As any sharemarket investor will tell you, it’s been a tough year to find a winner. But there are a few entrepreneurs that have done okay.

Mining entrepreneur Frank Timis is a winner thanks to the strong performance of his company African Minerals, which is listed in London and has risen 35% this year.

The biggest local winner remarkably comes from the retail sector. Reg Rowe is the founder of the Super Retail Group, owner of the Super Cheap Auto and BCF retail chains, which have performed strongly despite the consumer slowdown. As a result, the company’s shares are up 3% since the start of the year, taking the value of Rowe’s stake to $328.6 million.

I am also counting Kerry Stokes as a winner, although the value of his stakes in Seven Group Holdings and Seven West Media has fallen 3% to $1.7 billion. In a market where media stocks have been on the nose that is a very credible result. Stokes’ decision to bring the Westrac heavy equipment business into his publicly-listed holding company has been a very smart one – he’s unlocked value in the Westrac business and shielded his fortune from the media sell off.

 

NAME PORTFOLIO VALUE AT AUG 4 ($m) VALUE AT JAN 1 ($m) CHANGE ($m) CHANGE (%)
Ivan Glasenberg Glencore 6,605 9,003 -2,398 -26.6
Andrew Forrest Fortescue Metals Group 5,574 6,362 -788 -12.4
James Packer Crown, Consolidate Media, Ten Network 3,401 3,718 -317 -8.5
Frank Lowy Westfield, Westfield Retail Trust 1,895 2,273 -378 -16.6
Kerry Stokes Seven Group, Seven West 1,736 1,799 -63 -3.5
Paul Ramsay Ramsay Health, Prime Media 1,280 1,343 -63 5.0
Kerr Neilson Platinum Asset Management 1,176 1,607 -432 -26.9
John Grill WorleyParsons 790 804 -15 -1.8
Nathan Tinkler Aston Resources 645 691 -47 -6.7
Tony Poli Aquila Resources 626 1,067 -441 -41.3
Gerry Harvey Harvey Norman 603 916 -313 -34.2
Peter Bond Linc Energy 440 532 -92 -17.4
Steve Kalmin Glencore 428 584 -156 -26.6
Chris Morris Computershare 415 600 -185 -30.8
Frank Timis African Minerals 354 263 91 34.6
Len Ainsworth Aristocrat, Ainsworth Gaming 353 434 -81 -18.7
Ian Norman Harvey Norman 339 515 -176 -34.2
Reg Rowe Super Cheap Auto 329 319 9 3.0
Gordon Merchant Billabong 165 277 -111 -40.2
Paul Little Toll 155 215 -60 -27.9

 

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