GOLD COAST TOP COMPANIES 2016 | 1-10
Written on the 4 April 2016 by Nick Nichols & Jenna Rathbone
THIS is your access to the definitive list of the Gold Coast's biggest companies, compiled by the editorial team at Business News Australia.
The annual Gold Coast Top Companies report offers a snapshot of the depth of business diversity in a region often perceived solely as a tourism heartland. While it still fosters the traditional economic drivers of tourism, construction and retail, the Gold Coast is also establishing itself as a hub for innovation and entrepreneurship.
The top 10 gives insight into the biggest and most iconic companies on the Gold Coast, from hotel operators and online retailers to chilled pet-food businesses and childcare operators. It also highlights a state of change for the Gold Coast corporate landscape and the challenges some of the big players are facing.
1 G8 Education
Market Cap: $1.39b
DESPITE a robust profit performance in 2015, G8 Education (ASX:GEM) faced a challenging year on the share market as investors grappled with government changes to the childcare support system.
G8's market value has fluctuated from a high of $1.55 billion to a low of just above $1 billion in the past year.
However, the childcare centre operator remains the Gold Coast's largest listed company by market value with its shares recovering since the start of the year on the back of a strong profit performance.
One of the big fails for the group in 2015 was the fumbled $185 million takeover bid for smaller Gold Coast rival Affinity Education which, had iut succeeded, would have cemented G8's position as Australia's largest listed provider of childcare places.
Affinity rejected G8's takeover offer which came in the aftermath of a massive drop in Affinity's shares. It was described by the Affinity board as opportunistic.
Affinity was ultimately bought for $212 million by private equity group Anchorage Capital Partners, the same group that floated the now failed Dick Smith Holdings (ASX:DSH) in 2013 for $520 million.
The missed opportunity for G8 led to the resignation of founding chair Jenny Hutson, who has since been replaced by former PricewaterhouseCoopers partner Mark Johnson.
However, while G8 managing director Chris Scott has affirmed the company's desire to grow, G8 appears to have taken a breather from the aggressive growth experienced in recent years with just 44 centres added to the portfolio last year.
Acquisitions have proved a boon for the company's bottom line, with G8 Education posting a 68 per cent increase in net profit to a record $88.6 million in calendar 2015. Revenue surged 44 per cent to $706.2 million.
G8 currently owns 489 centres in Australia, and manages another 18 in Singapore, giving it capacity to care for 35,221 children a day.
This is the third consecutive year G8 Education has held the Gold Coast's top company spot, although the resurgence of Australia's tourism sector saw it lose that title, even though briefly, to number two company Mantra Group at one stage in 2015.
2. Mantra Group
Market Cap: $1.2b
MANTRA Group (ASX:MTR) has been the big growth story among the Gold Coast's top companies this past year.
The hotel and accommodation group listed in late 2014 and, since then, investors have taken to buying up the company's stock and pushing the shares higher.
Mantra's growth has been driven by strength in its key Australian tourism and business markets, buoyed by a weaker Aussie dollar and a resurgent domestic tourism economy.
For a brief period in 2015, Mantra's market capitalisation exceeded that of G8 Education making it the Gold Coast's biggest company by market value. If the company grows at the same pace over the next 12 months as it did over 2015, Mantra Group could conceivably become the Gold Coast's biggest company in future years.
Mantra Group 's market value has risen from $444 million when it listed in June 2014, to a high of $1.4 billion in December last year.
The company recorded a solid full-year profit of $36.2 million in FY15. It backed this up in the first half of FY16 with a net profit of $24.3 million, which was up 11 per cent from a year earlier.
The Surfers Paradise-based company, under the Peppers, Mantra and BreakFree brands, has been hitting its strides in metropolitan markets, thanks to expansion in Brisbane, Sydney, Melbourne and Canberra over the past year.
While it appears that Mantra has a penchant for its home market with a swag of big-ticket Gold Coast acquisitions during the year, CEO Bob East (pictured) says much of that was due to opportunities the company couldn't pass up.
Among them was the management rights to Soul and Chevron Renaissance in Surfers Paradise, which were bought for $20.7 million and $31 million respectively.
"I've been trying to buy Frank Picone's building (Chevron Renaissance) for five years," East tells Business News Australia. "I like that asset a lot and we're doing a really good job there."
He also says Soul is experiencing 'exceptional' trading with room rates as high as $700 a night, well ahead of some of Mantra's best Sydney properties.
The other major Gold Coast play was the acquisition of four hotels owned by Outrigger, including Outrigger Surfers Paradise and Outrigger Twin Towns Resorts, for $29.5 million.
Mantra is already the largest accommodation provider on the Gold Coast, where it has 12 properties, and East recently revealed that the new acquisitions in particular have been trading above expectations.
The group is also extending its reach internationally with properties in New Zealand and Indonesia. East says Mantra is also eying further opportunities in South-East Asia.
3. Jupiters Hotel & Casino