NZ’s $8b technology sector expands - latest rankings of the fastest growing companies

The annual TIN100 list is out, naming the largest tech companies, and the fastest rising stars.PLUS: How tech exports stack up against dairy, meat | Companies sold to foreigners.

The Top 10 TIN companies by revenue (FY 2012):

1. Fisher & Paykel Appliances: $1.04b
2. Datacom Group: $788m
3. Fisher & Paykel Healthcare $516.7m
4. Tait Radio: $200m
5. Gallagher Group $187m
6. Temperzone Group of Companies: $181m
7: Rakon: $178.3m
8. NDA Group: $165m
9. Moffat: $153.2m
10. Schneider Electric (NZ) $135m

Top 10 companies to watch

1. Datacom Group: $788m (growth over FY 2011: $62.8m)
2. Tru-Test $103.4m ($18.8m)
3. Fronde Systems Group: $47.6m ($13.4m)
4. NDA Group: $165m ($13m)
5. Gallagher Group: $187m ($12m)
6. Skope Industries: $105m ($12m)
7. Diligent Board Member Services: $22.3m ($10.9m)
8. Fisher & Paykel Healthcare: $516.7m ($10.6m)
9. Xero: $19.4m ($10m)
10= Orion Health: $100m ($9m)
10= Wyma Engineering: $25m ($9m)

New Zealand’s technology sector is continuing to grow export revenue and employ more staff despite challenging global market conditions - however, not as fast as before.

The eighth annual TIN100 Report, an analysis of the performance of the top 100 New Zealand-founded high-tech companies.

TIN (Technology Investment Network) managing director Greg Shanahan says TIN100 companies' export sales growth dropped from 4.8% last year to 2.3%.  

Mr Shanahan pinned the slowdown squarely on the rising New Zealand dollar.

Tech vs cows
NZ's tech industry was worth $8 billion in total. This afternoon, Mr Shanahan  told NBR readers that 71% or $5.18 billion of that total was exports.

That compares to $5.5 billion for beef and lamb exports, and $11.34 billion for dairy exports last year, according to Stats NZ New Zealand In Profile figures.  

TIN100 companies sold to foreigners
The TIN100 MD also noted to NBR readers that "In calendar 2011, eight companies were acquired by overseas entities. So far in 2012, five companies have been acquired, not including F&P Appliances."

The acquired companies were Flo-Dry Engineering, Sonar6, Energy Intellect, Zealcom and 4RF.

F&P Appliances will remain in the TIN100 if China's Haier does assume full control - as long as most of its operations remain here.                                                                                           

The TIN100 Report monitors the performance of New Zealand’s 200 (TIN100 and TIN100+) largest technology exporters in the areas of ICT, high-tech manufacturing and biotechnology.  It is produced in association with IRL. Other sponsors are New Zealand Trade and Enterprise (NZTE) and the Science and Innovation division of the Ministry of Business, Innovation & Employment (MBIE). 

In the 2011-12 year TIN100 companies increased their combined revenue by 2.2% to $7.28 billion.  The next 100 companies ranked by revenue (TIN100+) grew by 4% to $679m.

TIN100 Report publisher Mr Shanahan says that despite a combination of exchange rate headwinds and tough international markets, TIN100 export sales increased by 2.3% 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,” Mr Shanahan 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 4 and 2 respectively,” says Shanahan.

Tech sector employs 28,000 - up 5%
The TIN100 companies, which employ a total of over 28,800 staff, globally increased staff numbers by 5.2% across the year with many companies highlighting the struggle to recruit people with specialist IT skills. Recruiting and retaining skilled staff is a growing issue for CEOs, the report reveals.

Shaun Coffey, chief executive of Industrial Research Ltd major sponsor of the TIN100 report, says it is encouraging that companies are continuing to invest in their value proposition with R&D spend up by 8% and sales and marketing spend up by 5%.

“The importance of investing in R&D is not lost on TIN100 companies,” he says.

“They are increasing their investment in research and development to stay ahead in the highly competitive technology game.”

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.

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.

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% to 30% of total TIN100 revenue.

According to Shanahan, 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.

The 2012 TIN100 Report was launched 25 October at a gala dinner in Auckland attended by 140 technology sector business leaders and stakeholders. Hon Steven Joyce, Minister for Economic Development and Minister of Science and Innovation, was the special guest speaker at the event.