Sydney Top Companies 21-30
1 October 2020, Written by Matt Ogg, Nick Nichols, David Simmons and Camilla Jansen
Sydney's Top 50 companies are leading the pack in Australia's largest city and leaving a lasting impact on the economy.
We reveal 21-30 on the list which largely consists of heavy-hitters in the property, construction and energy sectors.
Despite COVID-19 impacts, including a $2.7 billion loss, Qantas (ASX: QAN) has maintained its position at number 25.
On the other end of the spectrum, logistics software specialist WiseTech's results (ASX: WTC) have continued to go from strength to strength despite negative sentiment spurred by shortselling reports.
21. Stockland (SGP)
Stockland (ASX: SGP), Australia's largest listed developer, punctuated the end of FY20 with the announcement long-time CEO Mark Steinert was retiring after 7.5 years in the role.
22. Mirvac Group (MGR)
In February, Mirvac (ASX: MGR) delivered a quickfire $102 million windfall to a Chinese-Australian partnership in exchange for the opportunity to create a $1 billion master-planned community on the landmark site of the Channel Nine studios at Willoughby on Sydney's lower north shore.
23. AGL Energy (AGL)
After abandoning a $3 billion takeover bid for Vocus Group (ASX: VOC) in mid-2019, AGL Energy (ASX: AGL) still managed to secure two smaller acquisitions in FY20 as it sought to expand its reach into the telecommunications and energy sector.
24. WiseTech Global (WTC)
Shares in global logistics software specialist WiseTech (ASX: WTC) are yet to fully recover from short seller criticisms a year ago that have been ongoing, but the group still managed to lift profits by 3 per cent in FY20.
This growth was significantly lower than the 17 per cent surge in EBITDA, but this is partly explained by a write-down of goodwill on purchased companies including Containerchain, as well the renegotiation of more than 20 acquisition earnout obligations.
Apart from short seller attacks from J Capital which predicted much larger write-downs than WiseTech reported, the company has also had to cope with volatility in global logistics markets from late January through to May as a result of COVID-19.
But the company's founder and CEO Richard White projects a 22-42 per cent increase in EBITDA in the current financial year, buoyed by a turnaround in fortunes since the start of winter with user numbers for WiseTech's CargoOne logistics software platform hitting close to pre-pandemic levels in July.
"The COVID-19 challenges faced by the global logistics and supply chain sectors are accelerating the longer term trend towards consolidation and integration," said White.
"Within this environment, we are seeing increased demand amongst large global logistics service providers for our technological and digital solutions that drive efficiencies and productivity improvements.
"WiseTech is ideally placed to address this growing demand, with our logistics execution technology and 40 development centres delivering seamless, global capabilities that improve productivity, functional depth, data integration and visibility, regulatory compliance and value for over 17,000 customers worldwide."
25. Qantas Airways (QAN)
Australia's iconic airline Qantas (ASX: QAN) has become an emblem of the economic destruction wrought by COVID-19; hundreds of aircraft grounded, 6,000 redundancies, thousands of baggage handler jobs under review and a potential head office relocation in the wings.
CEO Alan Joyce's remuneration fell by around $8 million this past financial year, but that is small change compared to the $2.7 billion loss of which more than $1 billion came from the impairment of Qantas' A380 fleet that normally fly its international routes.
As a drastically downsized division, Qantas International has seen its CEO Tino La Spina depart, demonstrating just how serious the group is about slashing costs and staying afloat to avoid the fate of its overseas counterparts.
Domestic competitor Virgin Australia has entered administration and will be handed over to Bain Capital, but in terms of major international carriers like Qantas there have been multi-billion-dollar bailouts from Lufthansa to Air France-KLM to American Airlines, while South America's largest carrier Latam Airlines filed for Chapter 11 bankruptcy.
"It's devastating and it will be a question of survival for many," Joyce said of industry-wide problems.
"What makes Qantas different is that we entered this crisis with a strong balance sheet and we moved fast to put ourselves in a good position to wait for the recovery."
That balance sheet has also been lifted by a $1.47 billion capital raising, and more recently a 10-year $500 million unsecured bond issue.
From the Australian Government the flying kangaroo received some $267 million in JobKeeper payments in the lead-up to June 30, along with $192 million in support for minimum viable network and government repatriation flights, $36 million from the Australian Airline Financial Relief Package, and further benefits from overseas governments.
"Recovery will take time and it will be choppy. We've already had setbacks with borders opening and then closing again. But we know that travel is at the top of people's wish lists and that demand will return as soon as restrictions lift," Joyce said.
26. GPT Group (GPT)
With the 2019 calendar year nicely wrapped up, GPT Group (ASX: GPT) was looking forward to building on the momentum into 2020.
27. Lendlease Group (LLC)
Lendlease (ASX: LLC) announced plans to dump its trouble-plagued engineering business at the end of 2019, and the reasons for doing so were made clear after it was hit by two separate class actions in 2020.
"This is a further step in our global geographic foothold strategy, expanding WiseTech's lead in customs clearance and border clearance, which continues to grow in importance for world trade," said White.
"This transaction follows our recent acquisition of CargoIT, a leading customs management solutions provider in Sweden, and our European foothold acquisitions in Belgium, Germany, France, Ireland, Italy, Netherlands, Spain, and Turkey."
28. Origin Energy (ORG)
Origin Energy (ASX: ORG), which operates one of Australia's largest power-generation businesses, faced a competitive environment domestically due to a fall in wholesale electricity prices and the regulatory environment for retail pricing.
Octopus copped some flak over the deal for aligning itself with Origin and its fossil-fuel legacy.
However, Origin CEO Frank Calabria remains an advocate for green initiatives as long as they get 'energy right' for customers, the community and the planet. Calabria sees the trend towards electrification gaining momentum, particularly in the transport sector.
To that end, Origin this year launched a two-year electric vehicle smart charging trial with a view to helping the Australian market take up EV usage. Through a grant from the Australian Renewable Energy Agency, the company is rolling out 150 smart chargers in New South Wales, Victoria, Queensland and South Australia.
29. Coca-Cola Amatil (CCL)
Food, Beverage & Tobacco
The company sells a product that looks like coal juice, or coke by any other name, but it turns out Coca-Cola Amatil (ASX: CCL) actually does have an interest in the 'black gold' of the mining industry.
30. Seven Group Holdings (SVW)
Seven Group Holdings (ASX: SVW) might be most well-known for its media arm, but the Kerry Stokes founded company operates in a plethora of industries including industrial services, oil and gas.
It is this diversification that CEO and managing director Ryan Stokes said saw the company through the economic and social disruption caused by COVID-19.
The company finished FY20 with trading revenue of $4.56 billion and underlying earnings of $740 million, up 2 per cent.
"Today's result reflects a strong performance from our operating businesses and the robustness of our diversified model," said Ryan on the announcement of SVW's FY20 results.
The company's industrial services portfolio delivered solid growth, with WesTrac executing a standout performance.
In addition, the company's exposure to industrials, via its growing investment in Boral, positions the company well for the post-COVID infrastructure boom to come. CEO Stokes joined the Boral board after SVW boosted its stake in Boral from 10 per cent to just under 20 per cent.
"Our disciplined focus on operational cash flow combined with an increasingly diversified exposure to end markets means we are successfully navigating through the current uncertain times, and commence Financial Year 2021 with a strong balance sheet to pursue growth opportunities that complement our existing core businesses," said the CEO.
With regard to the company's media arm, Seven West, advertising revenue dipped during the worst of the pandemic period, but the group managed to offset losses with cost savings of $170 million and the re-negotiation of its AFL contract providing a further $87 million in savings.
In late 2019 the company attempted to merge with Prime Media, the owner of regional media assets.
However, that merger was blocked by shareholders, with SWM emerging with just a 14.9 per cent stake in the company.
This year the company also sold magazine business Pacific Magazines to Bauer Media for $40 million, and SWM's Perth HQ for $75 million to Primewest.
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Author: Matt Ogg, Nick Nichols, David Simmons and Camilla Jansen