Welcome to the big bounce back. The SmartCompany-Dun & Bradstreet Fastest Growing Private Companies List underlines Australia’s resurgent economy, with companies from a wide range of industries – lead by wholesaling and manufacturing – shrugging off the tail end of the downturn and hurtling towards 2011.
The companies range from gaming machine makers and distributors, to retail giants like Tiffany’s, but it is no surprise the mining and engineering industries feature heavily, with gold exploration corporate Minjar Gold leading the pack.
The list, which includes some the country’s most popular best-known companies, such as Google and McDonald’s Restaurants, is based on data from D&B’s extensive database. Where possible figures for the 2009-10 year have been used, except for companies whose financial year ends on September 30. Here is the top 10 – you can click here to see the full list.
The average growth on the list is 90.2%, with average revenue of $148 million. Total revenue came to $4.7 billion.
But according to Dun & Bradstreet chief executive Christine Christian, it’s the wholesalers and manufacturers that are enjoying the most solid growth.
“A lot of these companies are wholesalers. When you go back to the business expectations survey, you see that wholesalers are doing very well, relative to many of the other segments of the market. What is also really positive and interesting is that these are manufacturers, and we haven’t seen growth in that area for many years.”
In fact, wholesalers make up 21 companies of the top 100, with names including motor vehicle manufacturer Nissan, along with IT companies such as Dell. But other industries are also performing well in the wholesale market, with art supplies firm Artwrap counting revenue of $34 million in 83rd place.
But Christian also points to manufacturing as another surprising force on the list. Gaming groups Konami and Ainsworth, along with firms such as Aussie Signs, AutoFab and Ecolab, indicate manufacturing is back on the agenda.
“Perhaps Australia is being seen as a manufacturing base again, and a solid one at that, after many years of recording a decline in the segment.”
The manufacturing industry has performed fairly strongly this year. The AIG-PricewaterhouseCoopers performance of manufacturing index recorded in April activity grew by 9.3 points to 59.8 – the highest level since May 2002.
The trend is one that has surprised Christian, who says the re-emergence of manufacturers could be the start of a trend towards establishing the country as a new manufacturing base.
“What surprises me in the list is the re-emergence of manufacturers. The manufacturing sector has been very sluggish in the last couple of decades, we weren’t as productive as we needed to be. Margins were being squeezed, but now perhaps Australia is being seen as a stable manufacturing base.”
“In some cases the efficiencies could be derived in offshoring. And many customers are looking for quality products, so manufacturers are now comfortable in making their products here.”
“Many of the financial indices have been very good. Consumer demand is still very strong, and so as a result, it means that wholesalers are feeling confident enough to increase their volumes. This also means that manufacturers have been increasing inventories.”
That growth is set to increase, Christian says. The latest D&B expectations survey reveals executives are bullish about the Christmas quarter, with sales expectations high and profits expectations at a six-year peak.
“We’re looking at things for the quarter ahead, and it would suggest that the Christmas trading period will provide the stimulus that Australian businesses need to generate strong growth. Executives are very confident about the quarter ahead.”
“I think while the unemployment rate is low, and that while people have jobs, they probably will be allowed to absorb another interest rate hike.”
The automotive industry was one of the worst hit by the global financial crisis – and Isuzu Australia readily admits late 2008 was a particularly bad time to start operating. Marketing manager Richard Power says the company had just established its own brand, and it couldn’t have picked a worse time.
“It was very tough at the start. A couple of months after that, we had dealerships unable to get credit, people packing up and leaving – it was very tough in the first six months.”
“But we were helped by the fact we didn’t overextend our dealer spread. We gave them good coverage, the Isuzu name is extremely strong and has no peer for reliability in the truck market, and by extension, the ute market, despite some of our competitors’ claims.”
While Isuzu Motors formally produced trucks rebranded under the Holden name, Isuzu Ute Australia was formed by the company to offer its own brand of heavy duty vehicles.
The company turned over $34 million during 2009, and recorded average growth of 298% during 2008-10 to reach revenue of $136 million. Power says the company has managed to escape the downturn by pursuing an aggressive growth strategy and emphasising the company’s model line-up as a powerful vehicle suited to working in tough, rural areas.
“This past year has been quite strong. We have increased our sales figures up 70% on the first year’s operations, and that’s come off a fairly low base. So we started selling vehicles in October of 2008, so we’ve really only operated for the past two years. Volume has increased strongly.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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