Vitamins up, hotels down for billionaires in time of COVID-19
Some billionaires on The List have suffered big cuts to their wealth as profits fall. Others have thrived during the pandemic.
If you’re looking for a sector that has been able to ride out COVID-19, it could be vitamins. The pandemic, according to one big vitamins manufacturer, caused a big increase in “immunity-focused products”.
Or you could try construction, where it has been a case of Queensland being perfect one day, and just about the only place to keep doing business the next.
Many of Australia’s wealthiest and most successful entrepreneurs and business owners have taken a big dent to their fortune during COVID-19, which hit a diverse range of businesses, from coal miners to hotel owners and education firms.
Financial accounts lodged with the corporate regulator by members of The List — Australia’s Richest 250 and obtained by The Australian provide a snapshot of which industries managed to thrive during the pandemic, and also the sectors where companies took big hits to their profits, putting their balance sheets under pressure for the first time in a decade.
It shows vitamins and fast food as the big winners, while document-searching services and construction also proved resilient.
Toby Browne is one of the least-known members of The List, but his Pharmacare business has racked up years and years of big profits selling nutrients, vitamins and healthcare products around the world. Pharmacare brands include Nature’s Way, Fat Blaster, Sambucol and Bioglan.
Sambucol, used to treat cold and flu symptoms, and Bioglan vitamin supplement were particularly big sellers and helped Pharmacare lift profits by about 25 per cent in 2020.
“Net sales (were) aided by the unfortunate coronavirus (COVID-19) pandemic which saw increased demand for immunity-focused products in the second half of the year,” commentary in the financial accounts lodged by Pharmacare’s British subsidiary said.
Meanwhile, Mick Power’s civil construction and development giant BMD had a big turnaround in its financial results and more than trebled its pre-tax profits.
While BMD operates around Australia and has a profitable joint venture in The Philippines, Power’s home state of Queensland was the best performer.
“The construction division in Queensland continued to deliver outstanding results in 2020 despite COVID-19,” BMD said in its annual report. “Revenue from property sales increased by 42 per cent on the prior year’s result due to the strength of the land subdivision market in Queensland.”
Meanwhile, it was a bumper year for Christian Beck’s LEAP Legal Software and InfoTrack, a global provider of information search systems for the legal profession covering people, property and corporations.
The parent company, ATI Holdings Co, doubled its net profit for the year despite search and transaction business taking a hit from March onwards.
“Subscription-based businesses together with the group’s commercial credit reporting business were resilient during the period,” ATI said in a description of the last three months of the 2020 financial year when COVID hit.
Elsewhere though, it was more a case of fortunes lost than gained, especially in the hotel and tourism sector.
Billionaires Ervin and Charlotte Vidor oversee a Toga Hotels empire spanning 11,000 rooms in Australia, New Zealand and Europe under brands such as Adina and Medina Apartment Hotels, Vibe and Travelodge, and have a joint venture with Singapore company Far East Hospitality.
Accounts for their Toga Hotel Management Holdings show an $80m fall in revenue to $284m for the year as the business slid to a loss while hotels shut down around the world.
“While the group commenced 2020 with solid momentum, the group’s performance for the financial year was significantly impacted by the COVID-19 pandemic and the resulting government actions,” Toga wrote in a review of its operations.
Tasmania’s biggest tourism business, Greg Farrell and his family’s Federal Hotels group, also suffered a big drop in its performance. Net profit fell by two-thirds and revenue by 15 per cent.
“A significant portion of the group’s businesses were closed from late March to late June, resulting in a material decrease in the operating turnover of the group,” Federal’s parent company Mulawa Holdings said in its annual report.
Another Tasmanian business, Dale Elphinstone’s Caterpillar mining equipment dealership William Adams, suffered a 20 per cent profit fall, though it said its services continued with “minimal disruption”.
Lower coal prices and falling exports hit billionaire Chris Wallin’s QCoal. While its revenue rose $10m to $429m in 2020, net profit fell from $120m in 2019 to $86m.
Thomas Foods International, the large meat processor owned by Chris Thomas, had to deal with higher cattle prices and drought-breaking rain before COVID hit in March.
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