BRISBANE CORPORATE LEADERS POWER AHEAD

Written on the 10 April 2012

BRISBANE CORPORATE LEADERS POWER AHEAD

THE city’s top publicly listed companies made a positive start to the first half of fiscal 2012, according to Deloitte Queensland corporate finance leader Robin Polson (pictured).

Brisbane’s corporate leaders have shown vigour in the 12 months to January 31, 2012. The Deloitte Queensland Index increased 16.1 per cent in the period compared to a decrease of 10.8 per cent in the benchmark ASX All Ordinaries.

There are 211 companies on the January 2012 Deloitte Queensland Index, from which 118 increased market capitalisation, 55 decreased and the remainder were steady.

QR National experienced the largest market cap increase of 8.5 per cent to $708 million during the month. The company’s proposed rail project in the Galilee Basin was granted significant project status, allowing centralised control of its approval process through the Queensland Coordinator-General Graeme Newton.

Flight Centre’s market cap rose 19.7 per cent to $318 million during the same period despite making no major announcements. This is a reflection of the strong Australian dollar’s effect in boosting outbound international flight bookings.

Campbell Brothers also jumped 6.1 per cent to $203 million without announcing any real news. Super Retail Group is bucking the retail trend with a 40 per cent increase in net profit after tax for the first half of fiscal 2012 and strong acquisition activity.

Domino’s Pizza has also done well since fastfood tends to perform better in a tighter market. Echo Entertainment, which owns Jupiter’s Treasury Casino and Hotel, is one of many new additions to the ASX as a result of the 2011 demerger from Tabcorp.

Brisbane’s resources sector is experiencing paramount growth without a hint of an imminent slowdown. So far this year, the top three resources companies are New Hope, PanAust and Aston Resources. One would expect to see more, but after reaching a certain size they are usually acquired by multinational peers.

Macarthur Coal, Lihir Gold, Bow Energy, Arrow Energy, Northern Energy and Felix Resources have delisted after being acquired but are still active.

A November 2011 Deloitte study commissioned by the Queensland Resource Council predicted there would be 66 major projects worth a combined $142 billion by 2020.

Businesses must fix their eyes on the mining boom or ensure they are at least close to it and think about where growth opportunities lie. They should develop strategies, finance and due diligence to achieve greater flow-on effects and benefits while minimising exposure.

Airlines should work with the resources industry to meet its fly-in and fly-out travel demands, while retailers can find ways to target cashed-up mine workers.

Property, tourism and retail are in a tight market, but there is still plenty of resilience left in the Queensland economy.

Tourism operators lamenting about the strong dollar will not bring about positive change. They need to deal with the strong dollar and make the most of opportunities that lie ahead.

Investors will return, and when they do, they will need to be top performers in the property, travel and retail sectors.

Companies that respond well to our challenging market will reach higher ground.


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