Richard Smith, the delivery driver who became a billionaire

PFD Foods boss Richard Smith moved to Australia when he was 19, drove delivery trucks and eventually bought the company before selling a majority stake to Woolworths.

PFD Foods founder Richard Smith and his CEO daughter Kerry have built a $2bn business.

Richard Smith is the ultimate example of an ordinary employee who bought the company and turned it into a huge success.

Smith is one of the nation’s quiet success stories, which started with him taking a driver’s job at 19 just after emigrating to Australia from Scotland. He worked his way up the ranks to eventually own the company that became PFD Foods, and then built it into a $2bn giant.

PFD is a big player in the food services industry, delivering food to thousands of pubs, restaurants, bakery chains, fast food outlets, hotels, hospitals, retirement homes, prisons, airports and cruise liners around Australia.

It has been so successful, it attracted the attention of Woolworths, which in June received the green light for a $552m deal to buy a majority stake in PFD. Woolies also acquired the company’s freehold distribution centre properties that are being leased back to PFD.

PFD management will remain in place, led by Smith’s daughter and chief executive Kerry, and the Smith family can sell the remaining 35 per cent to Woolworths in three years under a put-and-call agreement.

While PFD has been built ­quietly over several decades, fin­ancial accounts lodged with the corporate regulator last weekend show just how successful Smith and his family have been.

PFD made a $36m net profit from revenue of $2.28bn for the year to June 26, the company’s annual report reveals, compared to a $29m profit and $2.09bn revenue in the previous year.

Earnings before interest, tax, depreciation and amortisation reached $112m in 2021, up from about $104m the previous year.

The result could have been even better though, given operations were disrupted by Covid restrictions that resulted in rest­aurants and other venues being closed during lockdown across several states during the year.

“Victoria’s … extended lockdown …[caused] a significant impact on profitability for that state,” a note in the accounts said. “As Covid restrictions eased … customers were able to reopen for business and more normal trading patterns began to emerge. However, intermittent lockdowns during the second half of the year created further challenges.”

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Richard Smith

• Age: 80
• Lives: Melbourne
• Estimated wealth: $852m
• Industry: Food services
• Secrets of success: Starting out as a delivery driver and then buying the company with $20,000 from super and long-service leave, turning PFD Foods into a $2bn powerhouse

Source: The List – Australia’s Richest 250

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PFD’s accounts also reveal the Smith family received an $88m dividend, following a $12m payment last year, as the Woolworths deal was done. PFD also repaid $10.06m it had received from the federal government in JobKeeper subsidies during the year.

It is all a far cry from when, aged 19, Smith emigrated in 1959 from Dundee in Scotland, where he had left school at 14 with the words his rector said – “Maybe it is a good idea, Smith, if you left” – ringing in his ears.

Smith worked as a van boy helping sell soft drinks in his home country, then later as a salesman and driver. He would later in his teenage years follow his fiancee’s family to Australia, move to rural Victoria and start working for a food delivery business in Morwell: Processed Food Distributions.

It was a stroke of fortune given the original plan was for the family to move to Dalby in Queensland. But finding it too hot, they moved to the Latrobe Valley in Victoria instead. Smith worked his way up to manager of the branch and later moved as sales manager to its Melbourne headquarters.

In 1975, with the help of the billionaire Liberman family, Smith engineered a management buyout by using his $20,000 long-service leave and superannuation payment.

Thirteen years later, the Libermans sold their share to Smith, who assumed full control and set about building a national network of warehouses and trucks, making a series of bolt-on acquisitions across the nation.

The group now has 2700 employees. Kerry Smith is the CEO, Smith’s son Lindsay heads other joint ventures and businesses the family owns, and another daughter, Sharon Landy, looks after their philanthropic pursuits.

While Smith has horse racing interests and PFD has sponsored his beloved Collingwood AFL team, he revealed to The Australian earlier this year the simple business mantra he had always kept in mind: “When you look at food service, it is a simple business: you buy it, you sell it, you make a profit.”

It has proved to be a simple yet effective recipe for success.

Originally published as Richard Smith, the delivery driver who became a billionaire