Secrets of Meriton, Linfox revealed

The inner workings of the business empires of two of Australia’s richest billionaires have been revealed for the first time.

Harry Triguboff in his office at Meriton. Picture: John Appleyard

The inner workings of the business empires of two of Australia’s richest billionaires have been revealed for the first time, with property mogul Harry Triguboff and transport magnate Lindsay Fox combining for $4.5 billion revenue and almost $500 million of profits in a single year.

A rare lodging of financial accounts this week with the corporate regulator by both men show their respective businesses, Sydney apartment builder Meriton and trucking and logistics giant Linfox, recording big profits in 2018. Mr Triguboff’s Meriton, which he founded in 1963, dominates the Sydney apartments sector and made a pre-tax profit of $485m in the 2018 financial year, according to its most recent accounts lodged with the Australian Securities & Investments Commission.

Meriton’s revenue reached $1.84bn and it made a net profit of $340m after paying about $145m in company income tax.

But that profit figure, recorded in a period when the residential market was undergoing a correction as house prices fell from a July 2017 peak, was down from the previous year when Meriton made $384m net profit from $1.79bn revenue.

Neither Mr Triguboff nor Mr Fox paid themselves any dividends.

Mr Triguboff told The Australian that residential property market conditions had improved in recent months and that sales in Sydney in particular — Meriton also has projects on the Gold Coast and recently purchased a Melbourne site — were showing signs of bouncing back after the federal election.

“Prices are starting to improve too. They hit the bottom and are going up again, but still they are cheap, I think. People complained that house prices were too much, but if they were then you would see other builders selling apartments, but they are not. I’m still doing it, because I always have. But costs are higher now too, and there is no land to buy. So there will be a crunch in a couple of years when there will be no ­supply.”

The Meriton accounts note: “Although the residential selling market continues to be stagnant, both rental markets and serviced apartments continue to be in strong demand and underpin revenue increases for 2019.”

Mr Fox’s Linfox, which he started in 1956 in Melbourne with just one truck, recorded a net profit of almost $135m from revenue of $2.72bn in 2018, up from $108m and $2.5bn in the previous corresponding period.

The Linfox business spans trucking, warehouses and property, logistics operations such as the January purchase of Aurizon’s Queensland intermodal operations, airports and the Armaguard cash business.

Both companies were previously among a group of large corporations that have not lodged annual reports with the Australian Securities & Investments Commission under grandfathering provisions stretching back to the 1990s.

The lodging of the reports therefore sheds light on the sheer size of the two billionaires’ business operations and how their wealth has built up over decades in business.

Mr Triguboff was third on this year’s edition of The List — Australia’s Richest 250, published by The Australian, with a wealth of $12.31bn, while Mr Fox’s $3.52bn fortune put him in 18th position.

Meriton’s accounts show Mr Triguboff overseeing an empire he has full ownership of that owns $2.97bn worth of land and buildings and had $162m in current loans and $195m in non-current loans out to buyers of Meriton apartments in the form of vendor financing.

The accounts also show Meriton having about 12,000 apartments at various stages of development and about 8200 investment units that Mr Triguboff has maintained ownership of. He said yesterday the figure was now about 9200 and would be 9500 by the end of July.

In total, Meriton has net assets of more than $3.8bn and retained earnings of $3.6bn.

While property clearly comprises the bulk of Mr Triguboff’s wealth, the Meriton accounts also show he owns $265m worth of structured financial products and about $900,000 worth of shares.

Mr Fox’s Linfox has $225m in cash on its balance sheet and almost $500m worth of property, plant and equipment.

In total, it has net assets of just over $1bn and retained earnings of a similar figure.