Hamilton Island profit a winning result for billionaire Oatley family

Hamilton Island has delivered for the billionaire Oatley family, with the luxury resort showing a big profit this year.

Daniel Oatley, the late Bob Oatley’s grandson, in Hobart after steering Wild Oats across the line, pictured with his uncle owner Sandy Oatley. Picture: Richard Jupe.

Hamilton Island has proved to be a winner for the billionaire Oatley family, with the luxury resort delivering a big profit this year.

The late family patriarch Bob Oatley paid $200m for the island in 2003, and his family have since reportedly spent about $500m doing up the resort and rejuvenating the Hamilton Island Race Week yachting event held each August.

According to documents lodged this week with the corporate regulator, Hamilton Island (via the 21st Century Resorts Holdings entity) recorded a profit before depreciation, interest, tax and significant items of $55.9m in the 2019 financial year from revenue of about $256m.

Those results were up almost 9 per cent and 5 per cent respectively, and were helped by a double-digit increase in sales growth at the holiday homes the Oatleys manage on the island that sits off the Queensland coast.

Hamilton Island comprises resorts such as the six-star adults only Qualia, which features a private beach and upscale restaurants and views of the Whitsundays, hotels and other accommodation. The family also operates a marina and boat harbour, golf course and airport and is also developing land on the island.

While the family was pleased with the financial result of the island, in a review of operations for the year they did warn that they “are experiencing a slight contraction in hotel occupancy as overseas visitors, particularly from China, are affected by their slowing domestic economies”.

A $13m increase in revenue for the year was mainly as a result of a $7m uptick in sales of food and beverage, and merchandise, while the island’s land is valued at about $137m on the family’s books and building and infrastructure works another $234m.

The Oatleys have a $100m loan with Westpac on Hamilton Island’s books and have borrowed another $55m from one of their related companies Balmoral Investments.

Their island’s financial accounts also said the group was spending $16.8m on two new staff accommodation blocks, $11m of which was incurred during the 2019 financial year. The outlay would “enhance the island’s ability to attract and retain staff”.

The Oatleys had to oversee expensive and costly repairs to the island after a 2017 cyclone, Tropical Cyclone Debbie, caused extensive damage, though the family has received $30m in insurance payouts.

Sandy Oatley and his siblings inherited their wealth from their late father Bob, whose name once again adorns the family’s Robert Oatley Vineyards business that they also own.

But the family’s wealth originates in the Rosemount Estate winery Bob founded in 1969 and sold to Treasury Wine Estates for $1.4bn in 2001. By then he had spent plenty of money on his sailing pursuits, including winning several Sydney to Hobart yacht races, and Hamilton Island — which was developed by Australian entrepreneur Keith Williams in the 1980s — as well.

Robert Oatley Vineyards made a small $820,000 loss from $97m revenue in 2018, according to the company’s latest accounts that were lodged earlier this year. The business operates vineyards and a winery near Mudgee in NSW.

Otherwise, the Oatleys have joined with other members of The List — Australia’s Richest 250 as shareholders of the ASX-listed Future Generation Investment Company, an investment firm that gives shareholders exposure to top local and international fund managers who donate some assets to charitable causes.

Notable investors in FGIC include billionaires Andrew Forrest, Solomon Lew, Alex Waislitz and the Smorgon Family.

The Oatleys also are shareholders in the recently listed private debt fund, the Partners Group Global Income Fund. Global investment manager Partners Group raised $500m for the fund from investors ahead of its September float.

Another holding is the MCP Income Opportunities Trust, which has exposure to private credit investments such as loans, notes and bonds and is managed by alternative assets manager Metric Credit Partners. The trust targets a cash return of 7 per cent quarterly net of fees for its investors.