New Zealand’s high-tech sector looks to be holding its own in spite of the prevailing tough global market conditions, if the results from the latest TIN100 report are anything to go by. The eighth annual TIN100 Report, which analyses the performance of the top 100 New Zealand-founded high-tech companies, shows that in the 2011-12 year TIN100 companies increased their combined revenue by 2.2 per cent to $7.28b. The next 100 companies ranked by revenue (TIN100+) grew by 4 per cent to $679m.
TIN100 Report publisher, Greg Shanahan, says that despite a combination of exchange rate headwinds and tough international markets, TIN100 export sales increased by 2.3 per cent to $5.18b over the same period.
“As the revenue profile of these companies gets larger they are showing increasing maturity and a preparedness to invest in their own futures,” he says. “There are larger companies in record numbers. An all-time high of 34 with revenues over $50 million and a record number of 18 with revenues over $100 million, up by four and two respectively.”
The changing global economic environment has resulted in a shift in high-tech export markets. Sales by TIN100 companies into North America and Europe fell while sales into Australia grew by 7 per cent to 30 per cent of total TIN100 revenue.
Shanahan says a rebalancing of markets towards Australia made sense in the current climate, while TIN100 companies remain well positioned for any recovery in the US economy.
Elsewhere, R&D spend increased by 8 per cent, while sales and marketing spend notched up a 5 per cent increase.
Many successful companies are playing to New Zealand’s traditional advantage of innovating early in commercial solutions that help offset the poor economies of scale in nation of our size. These include computer outsourcing, primary sector technologies, payments/financial service solutions and production and material handling equipment.
The report yielded positive results for New Zealand’s agritech sector. This year all of the top eight companies in the primary industry technology sector reported revenue growth. In part this reflects the global focus on efficient food production and New Zealand’s success, through its strong agricultural base and heritage, of creating such efficiencies through technology.
New Zealand Trade and Enterprise has been sponsoring the report since 2005 and Customer Director Matt Ritchie says the report offers an excellent snapshot of some New Zealand’s leading technology businesses.
“The global economy remains a tough contender, but these New Zealand companies, defined by their entrepreneurial spirit and characteristics of adaptability and flexibility, continue to rise to the challenge,” he says. “From high-tech manufacturing to healthcare software, our most successful technology companies are providing customer-centric products and services that are having a fundamental impact on day-to-day business in New Zealand and around the world. The results of the 2012 report demonstrate why innovation is so deeply embedded in New Zealand’s DNA.”
Other notable findings include:
• The revenue threshold for inclusion in the TIN100 increased by $500,000 – from $12.95m in 2011 to $13.68m in 2012.
• Two companies (Skope Industries and Orion Health) achieved revenue of $100m or above for the first time.
• Revenue for the three $500m+ revenue companies in the survey (F&P Appliances, Datacom & F&P Healthcare) was flat – down 0.4 per cent.
• Companies headquartered outside Auckland showed revenue growth whilst Auckland-based businesses (the majority) showed a decline in total revenue
• Staff numbers of the TIN100 companies increasing by 5.2 per cent across the year, to reach over 28,800 staff. But recruitment hasn’t been without its challenges with many companies highlighting their struggle to recruit people with specialist IT skills and retain skilled staff.