Lindsay Fox, founder of Linfox, whose trucks we see on highways across the country, has always had an interest in cash and now has proven the old saying that “cash is king”. Fox has done that at the expense of big businesses that seldom have their arms twisted into submission — banks and our huge supermarkets.
Since early this year, Fox and the banks (along with others such as Woolworths and Coles) have been fighting over what they pay Fox’s Armaguard business for delivering cash to their businesses and ATMs. In an age when the pandemic escalated the exit of cash for many Australians, Fox’s big customers want a better deal or discount on what they’ve paid in the past.
They’ve even talked about a co-operative created rival service if they aren’t able to get Linfox to come up with a better price.
This was a potential dire situation for Fox and Armaguard.
However, instead of giving into price cutting, because Linfox has argued that it would be left with a losing business, Fox pulled out one of his great ‘weapons’ — former ACTU boss Bill Kelty, who’s nowadays a Linfox director.
Along with Lindsay’s son Peter Fox, who’s chairman of the transport company and others, a deal was struck to give Armaguard $50 million to stay in the game but it’s not ‘money for nothing and their cheques for free’, to twist an old Dire Straits song. The AFR’s James Eyers explained the deal this way: “The $50 million injection will be funded by Armaguard’s biggest customers – Commonwealth Bank, Westpac, National Australia Bank, ANZ, Coles, Woolworths, Bunnings and Australia Post. The funding will be contingent on the struggling company, a subsidiary of the trucking empire of billionaire Lindsay Fox, hitting efficiency and restructuring milestones to put it on more sustainable financial footing.”
Linfox will let Prosegur Australia (a division of a multinational security company headquartered in Madrid, Spain) to run its eye over Armaguard to ensure best practices are implemented to reduce costs, while the banks and retailers have agreed that the company should be able to make an acceptable profit.
Interestingly, Eyers added that the “Linfox family and Prosegur are understood to have agreed to put $30 million to $40 million of new funding into Armaguard”. That suggests that Fox could be angling for an eventual sale or joint venture with Prosegur, leaving the problems of delivering cash in a new world, where cash has lost its kingly rating, to a specialist overseas operator.
Either way, I expect Lindsay will use his wily foxing ways to get what he wants.
PS: A few years back, when I was hosting Switzer on the now closed Sky Business Channel, I interviewed Lindsay. In a chat at the end of the interview, he mentioned how he thought wives were often stuck in their ways. Today this kind of comment would be tagged as “politically incorrect”, but 87-year-old former truck drivers often are. I argued with him on the subject, and he bet me that Maureen my wife wouldn’t accept it if I tried to sleep on her side of the bed. I scoffed at that, knowing how outside-the-square my wife has been her entire life. We had a $100 bet and I lost! The Fox had outfoxed another rabbit. Only recently I coughed up because I hadn’t seen him in years and wasn’t going to send $100 in an envelope from Sydney to Melbourne. I should have put his winnings into an Armaguard truck!).