The making of an employee-owned company.
Employee Ownership
From the beginning of the ARA journey a major goal was to be an employee-owned company. Today, 25 years from the start of that journey, more than 600 employees, or approximately 12% of the ARA workforce, now own shares in ARA Group Limited.
In financial year 2007, ARA grew 59% from the prior year. This was due to a combination of organic growth and acquisitions. This growth strained the financial resources of the company. Some new equity was required, and it was at this time, ARA became an employee-owned company.
Senior Managers in the Group were given the opportunity to purchase shares. A number of managers did purchase shares and thus began making ARA an employee-owned company. We previously had given some managers stock options and others we loaned money to via a special purpose vehicle to own shares. All but one person either left the company or sold the shares vested in their name from the special purpose vehicle. As a result of this experience, it became clear that for share ownership to be meaningful to employees, they had to purchase the shares with their money, just as the Founders did at the start of ARA operations.
In recent years, the amount of employee shareholders has increased significantly. There is a great deal of interest by our employees to own shares in the company where they work. We have also used ARA equity to assist in providing consideration for the acquisitions we completed. The ownership of shares in ARA by our employees assists in making our culture one of inclusion and provides a basis for the consistent approach to ensuring our work and focus are done in the best interests of the Group.
Dividend Story
Another compelling reason our employee share ownership is significant is due to the consistent quarterly dividends paid at a yield that far exceeds the average ASX listed companies’ dividends. The yield on ARA dividends is approximately 7% on the current $4.75 per share value (based upon recent trades) before franking credits whilst the average ASX listed company dividend yield is approximately 3%. During the past ten years, approximately $210 million of fully franked dividends have been paid. There are $69 million of unused franking credits at 30 June 2026.
