More hunger, less thirst in SA Business Index
Ahead of Friday’s release of this year’s South Australian Business Index, HLB Mann Judd partner Katelyn Adams offers a teaser of what to expect.
When the South Australian Business Index is revealed this Friday, the impact of the current cost of living crisis might be a talking point.
But, so too might be the strength of the state’s economy moving into the future.
HLB Mann Judd corporate advisory partner Katelyn Adams said, in preparing the Index, the firm’s team had seen a correlation between discretionary spending and some company movements in the Index.
“We’ve seen a collective drop by the companies within the wine, beer and hospitality industries,” said Adams, who will also be speaking at Friday’s event.
“The February and August rises in the beer and alcohol tariffs would probably have come into play there, but also the cost of living.
“People are needing to tighten their belts, so discretionary is spending down and they aren’t going to the pub as regularly.”
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In contrast, confectionary companies have moved up the Index, which Adams said could be explained by the price points of the different products.
She said the ‘lipstick effect’, where consumers spend on small luxury purchases to feel good when the economy is tough, could also contribute to this difference in company fortunes.
Fast moving consumer goods (FMCG), essentially food and low-cost household items, also saw a collective jump up the Index, with some returning to the rankings after a short absence, while two made it into the top 20.
As the data partner for the South Australian Business Index, the team at HLB Mann Judd spent considerable time poring over company earnings and pulling together the Index.
South Australian companies were invited to submit their financials – which more than 30 did – while the assessment and inclusion of others required a little research.
“This was our first year of being the data partner, so we started with last year’s list to get a feel for the evaluation methodology behind it; we didn’t want the two lists to look completely different, it’s important that the lists remain comparable year-on-year,” Adams said.
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“We had our valuation specialist in-house who pulled data from various sources.
“Public companies are much easier because it’s all publicly available, but we have access to other sources of data as well, behind the scenes, such as Ibis World and Capital IQ, to source the data of unlisted companies and then used our methodology to assess them and rank them.”
She added that there are “lots of private companies that are very private” and “even in this age of information, it can be very difficult to source all the necessary financial date to accurately value private companies”.
Katelyn Adams says the South Australian Business Index suggests the future is bright for the stateIn her role at HLB Mann Judd, Adams predominantly works with ASX-listed companies providing transactional services, governance and risk management support and business transformation and strategy advice. She also sits on the board of multiple listed and unlisted companies.
She noted that as in previous years, the resources sector has dominated this year’s Index, while the top 10 companies – spanning nine sectors – accounted for almost three-quarters of its entire value.
This reflected the positive position of the state’s economy overall, she said.
“While we’re moving through what would have been a tough year for some businesses, there are still some real indicators in there that the economy has moved forward, and we can see that in the strength of our top 10.”
The South Australian Business Index is Adelaide’s most trusted and comprehensive ranking of the top 100 companies in the state.
The full Index will be unveiled on Friday at a lunch where attendees will hear insights into the state’s business landscape from keynote speaker David Koch and HLB Mann Judd’s Katelyn Adams.
