WRC's 'blue chip' Australian

investments range through wine, clothing

By Ken Mcgregor

With no direct retail fronts as in its Islands operations, W. R. Car penter in Australia is perhaps not as widely known to the public as are other Australian companies of smaller size. But the group is already well diversified in Australia through asso ciate companies of different names and through numerous large invest ments, and it’s considered a “blue chip” investment stock by security analysts and stock brokers.

The group ranks as Australia's 42nd biggest company, and it is capitalised at over $95 million on Australian stock exchanges.

Basically, WRC’s operating activi ties in Australia comprise illuminated signs, clothing, winegrowing, financ ing, insurance, liquor sales and building developments. The group’s major investments are in retailing, construction, financing and flour mill ing. Less known is the group’s interest in commodity marketing, in denting, group buying and manage ment services.

Undoubtedly the best-known operat ing activity of WRC in Australia is the wholly-owned Claude Neon com panies, which produce illuminated signs.

With branches of this group in every state of Australia, the two key companies are Claude Neon In dustries and Consolidated Neon. This group regularly produces a profit ex ceeding $1 million for WRC—a sig nificant slice of WRC’s Australian profit of $2.8 million.

In the 1971-72 financial year, Claude Neon’s unmatured rentals of lease contracts increased from $21.9 million to $23.3 million. . Marvelcraft Pty Ltd is an interest ing specialist member of the Neon group. This company started as a maker of costume jewellery, but today jt specialises in moulded plastics and lights.

Based at Rosebery, NSW, Marvel craft makes roof lighting, expanded polystrene foam mouldings (“Fomite”), telephone booths and protective plastic shields for bank tellers.

Claude Neon Ltd was the vehicle through which WRC also recently set up a strong interest in spinning,

weaving and knitting with the acquisition—for $6.5 million cash— of Yarra Falls Ltd. A 55-year-old company, highly regarded in the woollen textile industry, Yarra is based in Victoria and has divisions for spinning and weaving, and a sub sidiary, John Brown Industries, pro duces knitwear, hosiery, evening wear and casual clothing.

Sales offices of Yarra are main tained in the Australian Capital Territory, New South Wales and South Australia and export sales are made to several overseas countries.

WRC has recently begun a rationalis ing programme of this company’s manufacturing and real estate activi ties. Re-development of surplus sites is currently under review by WRC directors.

The Carpenter interest in wine growing comes through a holding of two-thirds of Arrowfield Vineyard Pty Ltd in NSW’s famous Hunter Valley.

Over 800 acres of grapes of dif ferent varieties have so far been planted by Arrowfield, and dripfeed

irrigation has been installed through out the whole of the planted area.

While a big surplus of grapes is pre dicted for Australia over the next five years, no price drop for wine is expected and suitable profits should accrue.

An associated beef cattle venture— French Charolais—is proceeding satisfactorily on the same property.

W. R. Carpenter Finance Corpora tion (formerly Austral Pacific Finance) is a jewel in the group’s crown. This company’s financings have increased nearly nine-fold in 12 months and it has become a key partner in two NSW office block in vestments.

At the start of 1971 the company had a modest $200,000 on loan—at June 1971, it had $929,000 and at June 1972, it had $8,773,000 on loan with further substantial loans taking place.

Much of the Finance Corporation’s increase in loan funds came from receipts WRC collected on the sale of its significant holding in Ansett Transport Holdings during 1971-72.

The corporation specialises in the short-term money markets of mort gage, bridging and development finance, and is headed by Mr Jack Sullivan.

Its two equity holdings in office block developments are at Armidale, northern NSW, and in a $3 million 11-storey complex at North Sydney (with partners, Mainline Corporation and Partnership Pacific).

The Carpenter insurance interests are represented by Southern Pacific Insurance Company, a publicly-listed Australian company of which WRC has a 60.7 per cent holding.

With branches throughout Australia and in Fiji and New Guinea, Southern Pacific is headquartered in new offices at North Sydney. Managing director is Mr J. B. Bailey and spheres of business include fire, accident, marine and general risk insurance.

Southern Pacific produced a record profit of $333,219 in the 1971-72 financial year and gross premiums in-

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Mr C. H. V. Carpenter, chairman and managing director W. R. Carpenter Hold ings Ltd.

creased to nearly $5 million, a valuable cash flow.

In association with the construction group, Mainline Corporation, WRC has set up a new company called Strata Drive-in Liquor Stores at Bankstown, an outer Sydney suburb, near a huge shopping complex. This operation showed a small loss for 1971-72, but new premises and strong advertising are expected to see it become profitable early this year. ... , „ .

AH the Carpenter operating companics, whether wholly-owned or partly-owned, are associated with the group’s Australian “treasury” or broker-clearing house—W. R. Carpenter and Company of Sydney.

The group “bank” is a direct sub sidiary of the group holding and non °Pe,ratinB company-W. R. Carpenter Holdlngs Ltd ’ of Canberra, Of current importance to the group’s profit figure are its invest ments in public and private companies in Australia, plus smaller holdings in government securities.

These investments—with a current market value of over $3O million, bring in about $1.5 million in invest ment i ncome a year, The ma J or Carpenter investments are: • Woolworths, Australia - wide supermarket and retail chain, nine

million shares, equal to nearly 10 pe cent of Woolworths capital. • Commercial and General Ac ceptance Ltd, major finance house 1.4 million shares, worth 7 per cei of CAGA’s capital. • Associated Securities Limited major Australian lender, 3.2 millio shares, equal to 7i per cent of ASL capital. • Dalton Bros, major flour miller; 2.65 million shares, equal to 28 pe cent of this company’s capital. • Mainline Corporation, one c Australia’s fastest-growing and mo; successful construction groups 468,000 shares, worth nearly 10 p« cent of Mainlines’ capital.

Carpenter has adopted firm localisj tion schemes to employ and uj grade local employees into execute positions. A cadet training scherr for executives began in Papua Ne Guinea as long ago as 1965 and a staff training facilities have been e:

panded everywhere.

Another kind of localisation goir on is offers of shareholdings. I Papua New Guinea the PNG Goven ment has been offered by Carpente a shareholding in a tuna fishin venture, and Bougainville people share in the Arawa-based automoth business. In Fiji, parcels of shan in the company’s brewing and propen interests have been or will be offere to the public. Fifteen per cent of tW capital of the company to be forme to acquire Carlton Brewery Fi Limited is planned to be made avai able to residents of Fiji and 10 p< cent of the capital of Dominic Property Trusts Limited has been s; aside for eventual local participation

Mr W. R. Carpenter, managing direct[?] W. R. Carpenter Holdings Ltd.