EDITORIAL A Vintage Year

It was, all things considered, champagne year for corporates. The New Zealand economy grew at better-than-expected margin. Sure the dollar firmed but commodity prices were good and, until year’s end there was no ceiling in sight for the property and construction boom. And our Top 200 list of New Zealand’s largest trading enterprises became tougher club to join. The revenue baseline for entry was hiked healthy $20 million to over $70 million and this after hardly moving for well over 10 years. Companies lined up to list on the stock exchange. As NZX chief executive Mark Weldon says, it was the strongest (trading) year in two decades, both in terms of new listings and investor participation. By the time the year is over, 40 companies will have floated and shares look like better bet than real estate as we sail into 2005.
There are some difficult to explain contradictions in the figures, but it takes only one or two large players to drop the ball and the score line gets impacted. And then there are the overseas-owned enterprises which report results that market investor Brian Gaynor “takes with grain of salt”. Transfer pricing is, he says, “becoming real problem”. Profits earned in remote markets like New Zealand are minimised through various transfer pricing mechanisms and so, is it any wonder the collective profitability of companies on the list this year shows decrease when we all know companies had good year here. Still, the figures tell many success stories, particularly about local enterprises like Fisher & Paykel and Fletcher Building and the baby on the block, Pumpkin Patch, which listed this year. The good performance and the surge in new activity at the bottom end of the Top 200 listing reflects, says Gaynor, real regeneration. It is, he adds, important to remember that in the past 20 years New Zealand has witnessed “unbelievable turmoil” in the business sector.
There is another important reason to break out the champagne this year. This is the 15th year of the Deloitte/Management magazine Top 200 Awards. procession of high achievers, both individual and team, has been acknowledged and applauded for turning in great organisational performances, often against the odds. Fifteen years ago we offered just two awards, company and executive of the year. Now we recognise outstanding governance, youthful leadership, ethical practices, strategic growth, emerging enterprises and performance turnarounds. And each year we identify visionary New Zealander whose contribution to New Zealand straddles more than just the commercial sector. All these success stories are contained within the figures of the Top 200 list and they make compelling reading. We know that because every year we sell more copies of this particular issue of Management than we do of any other issue in the year.
Join us and raise glass to the success stories contained in this year’s list and to the success stories now being written for next year. Without them the New Zealand economy and society in general would have little, or more correctly nothing to celebrate.