Here are 4 family owned ASX companies to watch eagerly

Family owned ASX companies are a rare breed. We’re not talking about companies that are still founder-led, we’re talking about companies that have been in the same family for some decades, often multiple generation.

Such companies offer the advantage of long-term stability in leadership, something that can easily be taken for granted but can be vital for companies to operate. The families that own the companies often have a large stake, thus aligning their interests with those of fellow shareholders. And these companies have tended to perform well through several economic cycles – otherwise they wouldn’t still be around. Here’s a list of a handful of such ASX companies.

Here are 4 family owned ASX companies

Redox (ASX:RDX)

Redox is one of the newer ASX companies, listing mid-2023 with a $1.3bn valuation. It was founded nearly 6 decades prior, by Roland Coneliano, and it has stayed in family since.

This company sells chemicals, ingredients and other raw materials to over 6,000 manufacturers. These include food ingredients, pharmaceuticals, flavours, specialty chemicals, fertilisers, pigments, plastic polymers and many more, totalling over 500,000Mt sold per annum.

The company is not a manufacturer, but a distributor, so it is essentially a middle-man, although in the era of supply chain issues, this isn’t the worst space to be in. But it does not just transport and deliver the goods, but also performs any necessary mixing and blending as well as technical support, so it can create value beyond the original manufacturers.

Beacon Lighting (ASX:BLX)

Beacon has been listed since 2014 and was founded in 1967 by Ian Robinson. Ian Robinson who remains Executive Chairman and his son Glen is now the CEO, having worked for the group since 1994 and having been in the top job since 2013. The company’s mission is ‘to brighten our customers’ lives with exciting products that are environmentally friendly and fashionable through expertise and unparalleled service’.

It sells lights and fans to retail and trade consumers and is the largest company in its industry. Since listing, Beacon has not raised a cent in capital and is still 55% owned by the Robinson family. At the time it listed it had $11.5m in net profit and $17.2m EBITDA on sales of $150m. It had consistent 15-20% annual profit growth since 1995. Since listing there has been further expansion. Nearly a decade on, it delivered $312m in sales during FY23 and a $33.6m NPAT. It has grown its sales 34% and its profit by 107% in just the last 4 years.

ARB Corporation (ASX:ARB)

ARB was named after the initials of Anthony Ronald Brown, who founded the company in 1975 after he was inspired by a 4WD trip through the top end of Australia. The family owns just over 5% of the business, which makes aftermarket gear for 4WDs. Initially, it just sold bars and racks, but has not looked back since it bought the rights to the Roberts Diff Lock and the Old Man Emu Suspension in the late 1980s.

ARB sells to more than 100 countries. It has delivered 8.7% CAGR sales growth in the 10 years to FY23 and a 7.6% profit growth. Pleasingly, it has managed to invest $358.2m in the last decade, without being in a net debt position.

Reece (ASX:REH)

Reece has been owned by the Wilson family since 1967, but its history dates back to the early 1920s. It services plumbing, bathroom, building, civil, pools and irrigation, heating, ventilation, air conditioning, fire protection and refrigeration industries.

It has been the number 1 player in Australia for some time, yet only entered New Zealand in 2006 and the USA in 2018. It entered America through purchasing 171-showroom residential plumbing company MORSCO for $1.9bn, only to retire that brand less than 4 years later and launch Reece USA.

In FY18, the last year before it entered the USA, Reece recorded $2.7bn in revenue and a $225m profit. By FY23, it had recorded $8.8bn in revenue and a $388m profit. Its revenue was up 16% in 12 months and its NPAT was flat – not bad considering high inflation. More than half of its revenue came from the US and sales growth was twice as fast (21%). It paid a 25c per share dividend and recorded a ROCE of 15.3%.

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