Ryan Stokes steps out of Kerry Stokes’ shadow to remake SGH empire with billion-dollar deals
Far from staying in his father’s shadow, Ryan Stokes’ decade at the helm of SGH has surprised investors and seen him earn a reputation as a humble heir ‘smashing it out the park’.
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There are curses that come with the blessings of being the son of a billionaire.
Ryan Stokes, the 48-year old third child and heir apparent of Kerry Stokes, the self-made Perth-based billionaire, is a fixture of the business pages, not the social pages.
His decade running SGH, which he has been managing director of since 2015 when it was called Seven Group Holdings, is wildly different to how his father made his mark in Australian business.
The elder Stokes earned his fortune firstly in the boom-bust era of Perth real estate, then through influence-wielding opportunities such as the Seven Network and newspaper The West Australian, as well as the highly profitable WesTrac Caterpillar machinery business.
Ryan Stokes is not self-made. But the Sydney-based corporate titan has proven he deserves to be at the top of SGH, and has “smashed it out of the park,” according to investors.
“I’d give him a nine and a half out of 10,” says Ten Cap founder Jun Bei Liu, who owns SGH shares. “Initially, I thought, ‘he will just be guided by his father,’ but he has really shined in taking SGH in his own direction and … he is doing incredibly well.”
Media has become a bit-player in the conglomerate and many believe it will eventually be sold, something Stokes denied at the SGH half-year result. The WesTrac mining truck dealerships for the Caterpillar brand in Australia’s mining state remains SGH’s engine room of cash. It also owns Coates Hire and now Boral, and holds a significant shareholding in Beach Energy.
It’s hard to measure his successes against his father’s. Is it tougher to go from zero to $1bn or from the $13.56bn The Australian’s Richest 250 puts Kerry Stokes’ wealth at, and beyond?
The dividends alone paid by SGH to the family since Stokes’ time running the company are worth more than $1bn and SGH’s shares have risen more than six-fold. Not bad; the family interests currently account for just over 51 per cent of the shares on issue.
SGH’s earnings have risen four-and-a-half times over the same period, which is more than revenue has risen, and indicates an astute eye on costs.
SGH added about $10 per share in the past year, or about 28 per cent, to $46 after the company completed its acquisition of the nation’s biggest cement maker Boral.
And Stokes is not doing poorly either. He punched in as the eighth-highest earner on the ASX last year, taking home $11.69m in pay.
His four-year stalking of underperforming building giant Boral is Stokes’ most-lauded idea. SGH first snapped up Boral shares in 2020 and installed its CEO of choice, Vik Bansal, who in turn sold off foreign assets, focused on the domestic fundamentals and returned Boral to being a stellar profit maker.
Kerry Stokes, who was chairman of SGH back in 2020 (it is now Terry Davis), told The Australian Financial Review he used to buy “truckloads of cement and concrete from Boral” when he was building shopping centres in the 1980s, and said that former Boral CEO Sir Eric Neal was “an important mentor”.
As Boral’s yields rose under Bansal, SGH initially turned a profit, but then in a backflip that surprised the market, returned with a full takeover bid as the cement and asphalt maker’s forecast earnings continued to rise.
“Boral was the one that I thought was very brave,” says Liu. “It was against the odds, a lot of people thought Boral was just terrible. Ryan made it happen. His stewardship is not about taking a massive risk on one particular asset, it’s taking smaller incremental steps to guide all of the assets together.”
In fact, Stokes appears entirely risk averse. People who know him personally describe a quiet and intelligent person who is remarkably humble given his upbringing. His spouse Claire is a distant heir to the Campbells Pure Soap fortune and they share three children, living in a glamorous harbour-front home in Sydney’s exclusive Darling Point.
She does not appear interested in the fame game either, although in an interview with Vogue magazine, the then-newlywed declared herself the “luckiest girl in the world”.
“He’s very disciplined and has an intensity to him at work – he’s a Gemini, after all – but when he comes home, there’s this softness and kindness. We have our own little bubble.”
Neither Stokes would be interviewed for this article.
Schooled at the elite Christ Church Grammar in Perth, several of his fellow classmates (including one this journalist has been friends with for more than 20 years) refused to talk, even off the record, having previously described him benignly as a “really decent guy”.
One associate who would talk about Stokes was former federal Treasurer Josh Frydenberg. The two were groomsmen at each other’s respective weddings.
“I’ve known Ryan in both a personal and professional capacity and count him as a close friend,” says Frydenberg.
(A chance visit to a Melbourne nightclub with the pair, their fellow mate Georgina Downer whose father was at the time the Minister for Foreign Affairs, witnessed by this journalist, was entirely unremarkable as Stokes drank very little and kept to himself.)
Frydenberg says there is a lot more to Stokes than his emerging success in his own right as a CEO.
“He is not defined by his work. He has a great family and a particularly close relationship with his dad while at the same time he has played and is playing a leadership role across a number of community-based organisations including being chair of the National Gallery and previously having been chair of the National Library.”
Christopher Pyne, a former Minister for Defence in the Liberal Party, appointed him to his first philanthropic role as the inaugural chair of the government-funded Headspace, which provides mental health services to young people.
Pyne was looking for someone who was both young and had stature and says he was impressed with his genuine interest in trying to understand mental health problems.
They decided to venture into the emergency department of St Vincent’s hospital in Darlinghurst, Sydney in the middle of the night to witness the effect of crystal methamphetamine on addicts and the frontline workers who support them.
“It was a confronting experience,” recalls Pyne. “It wasn’t something we had been witness to before … and the late 20s son of a billionaire thought it was a good thing to have done.”
Pyne says he was studious and gave the job the time that it required. Mostly, he was struck by Stokes’ apparent genuine humility.
“Some billionaires’ children aren’t very humble,” says Pyne, who now runs lobbying firm Pyne & Partners.
Stokes graduated from Perth’s Curtin University with a Bachelor of Commerce and then worked as a financial analyst with investment bank Merrill Lynch in the US before heading home to roles within the family empire.
Timing is a rare gift in business in a market where CEOs are prone to overpaying for assets when they are over-earning. Stokes has won the confidence of investors by thinking like one.
“His timing has been really great,” Liu says. “He’s got a great track record and now he has a great portfolio of assets. Really, he has a great resume now.”
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