Companies in Australia’s mid-market sector with boardroom diversity, a dominant shareholder, or a long-serving chairperson are outperforming their peers. And those which made acquisitions for inorganic growth last year are boosting their revenues more than those that did not, but potentially squandering profit boosting synergies in the short term.

These are just some of the headline findings from KPMG Enterprise’s first ASX300+ Report, which studied the 2016 and 2015 results of Australia’s ASX300+ companies.

The report uncovered six secrets of success for performance across: diversity, digital technology investment, acquisitions, funding arrangements, shareholder composition, remuneration and tenure, to highlight the opportunities and challenges facing ASX 300+ companies.

KPMG Enterprise’s report provides a unique and accurate picture of mid-market performance through the lens of mid-cap listed businesses. While companies in this group do not have the same degree of diversity at board and senior executive level, those that do delivered better results in the 2016 year than their competitors. This reinforces our view that a broader range of views around the board table adds value to businesses.

Key findings:

• Female CEOs in the ASX 300+ delivered a 9 per cent increase in revenue in 2016, compared to the group wide average of 0.5 per cent. There are 21 companies in the ASX 300+ with a female CEO (3 per cent of companies);

• Companies with women on their Board achieved higher revenue growth, profitability and shareholder returns in 2016. On average, ASX 300+ Boards comprise only 9 per cent female Directors, compared with 23 per cent in the ASX 200. ASX300+ companies have a long way to go to reach the AICD target of 30% female Board representation by the end of 2018.

• Entities that completed an acquisition saw an 11 per cent boost in revenue overall for the year, compared to a backward trend of 2 per cent for the remainder of companies which did not complete an acquisition. However those entities that completed an acquisition saw a decline in profits post acquisition.

• Companies investing in intangible assets such as digital technology are growing their revenue at a faster rate than those which are not (4 per cent growth compared to -2 per cent trend). Profitability returns are also greater in these companies. 

• ASX 300+ companies with a dominant shareholder (>50 per cent equity) performed better than other companies in both revenue growth and profitability improvements - growing revenue in 2016 at 6 per cent, compared with 0 per cent growth for widely held entities.

• 15 per cent of the ASX 300+ are showing some financial distress in terms of their working capital position – and debt levels are rising overall across the ASX 300+.

• Those with strong working capital positions grew revenue at 2 per cent overall, compared to an overall decline of 4 per cent from companies which weren't able to effectively manage working capital.

• Chairperson tenure of more than 10 years is linked to better financial performance, with revenue growth of 7%, outperforming the competition.

• Remuneration of Directors is widely dispersed across the ASX 300+ from no remuneration to multi-million dollar packages including share based payment arrangements.

Panthers part of $100,000 bid to market high-energy appeal

By Isabell Petrinic

PENRITH Panthers has united with other western Sydney leaders to fund the first business-led plan for a stronger visitor economy.

Western Sydney Business Connection’s new $100,000 Western Sydney Visitor Project aims to produce a region-specific visitor marketing strategy to put western Sydney on the map.

The man behind the hugely successful 100% Pure New Zealand tourism campaign, Ian Macfarlane, has been recruited to help with this.

“Up to 1998 NZ had suffered market share decline in its major markets and that campaign actually allowed NZ to increase its market share in all its major markets in the seven years that followed,” said Mr Macfarlane, who has also developed marketing strategies for Abu Dhabi, Cape Town, Adelaide and San Diego.

“I think western Sydney has made a giant leap forward ... to realise it does take local initiative,” Mr Macfarlane, Strategic Consultants’ managing consultant, said.

He says the challenge for the west is around “getting local activation ... (and) achieving a far greater appeal to interstate travellers”.

This includes making local businesses “accountable” for the activity they can generate with the right government support, he said.

“In Penrith and the Blue Mountains what it seems to me is you’re more into higher energy stuff ... hiking, walking, doing things. That’s the type of audience we need to attract.”

Deloitte data shows in 2015 western Sydney welcomed 9,681,183 visitors, who spent over 15 million nights in the region, injecting more than $2.5 billion to its economy.

Western Sydney is now NSW’s fourth largest visitor region, and Badgerys Creek airport will be a big part of its future market.

The new visitor project strategy will be launched at a Western Sydney Business Connection forum on June 8 and be enacted from July.

It comes on the back of Deloitte’s first business-led plan for jobs creation in western Sydney, launched in December 2015, to create 200,000 “great new” jobs in western Sydney by 2020.

Recommendations include investment in cultural infrastructure, such as arts spaces in disused facilities in the Penrith CBD.

Click here to view the original article in PDF

Obtaining funding or investment to help your business innovate, commercialise and evolve can be a daunting challenge.

Angel investors, government grants and entrepreneur programs provide various funding options to Australian businesses. Understanding these, and how to best position yourself to maximise the opportunities available, can be highly beneficial.

Following our Guide to Funding for SMEs - a summary of grants and funding opportunities, this interactive and informative seminar will assist business owners to understand:

- the support Government programs provide to help SMEs to

commercialise novel products, services and processes; and

- the role of Angel investors in the ecosystem, and what they're looking for.

So whether you're an expert, or new to the fund raising process, come and join us to get some tips from the experts.

EVENT DETAILS

DATE Thursday 6 April 2017

TIME 5.30pm - 7.30pm

VENUE Davies Collison Cave, Level 14, 255 Elizabeth Street

COST Complimentary, including refreshments

RSVP By Thursday 30 March via the button below

CHAIR / SPEAKERS

Damon Henshaw | Principal, Davies Collison Cave

Damon will chair the session. Damon has extensive experience as a patent attorney and specialises in a range of engineering-related sectors, including clean technologies, mechanical and engineering sciences, medical devices, mining, automotive, manufacturing and physics. He has been successfully representing local and international clients for over 20 years, advising on IP strategy and crafting patent protection for businesses ranging from start-ups through to multinational corporations.

Topaz Conway | Director, StartupAUS | Commercialisation Adviser for the Entrepreneurs' Programme, Accelerating Commercialisation (Federal grant program) | Chair, SBE Australia

As a result of international experience traversing a number of industries including biotech, hi-tech, ecommerce and services, Topaz is an entrepreneur, angel investor, Director, and an advocate to the creation of a stronger Australian innovation culture. She works with early stage companies on commercialisation strategies and investment. As a Commercialisation Adviser, Topaz provides assistance and guidance to applicants and potential applicants with respect to grants under Accelerating Commercialisation within the Entrepreneurs' Programme.

Adrian Bunter | Executive Committee, Sydney Angels

Adrian is a member of the executive committee of Sydney Angels and is an experienced angel investor having made over 25 angel investments. He is also an executive director of Venture Advisory, one of Australia's leading specialist technology, media and telecommunications corporate advisory firms. With over 20 years' experience he has worked with a large number of companies to commercialise technologies, raise capital and to ultimately sell the business. Adrian is also a non-executive director of two ASX listed tech companies and several private businesses.

If you missed today’s free webinar, Power Up Your People, brought to you by the WSBC and Great Managers, attendees received 7 Powerful Management Strategies that, if applied well, will guarantee better results from their teams.

We can’t give away that gold… but here are some of their key takeaways:

• 75% of employees say their manager is the most stressful part of their job
• 65% of employees say they would take a new manager over a pay-rise
• A Great Manager can DOUBLE the capability of their people
• Top Australian CEO reported, “For every $1 we invested in leadership development, it added $6 to our bottom line.” Rob Birtles, CEO of Super Retail Group (incl. brands Supercheap Auto, Rebel Sport, BCF).
• A professional services firm identified the huge cost of lack of employee engagement in their business and after reacting to this loss by strategically developing their leaders, successfully recovered over a $1m in unbillable hours to their bottom-line

On top of this valuable learning, all attendees received a special gift only for those attending live.

Be sure you don’t miss the next webinar from the WSBC on Friday 26 May titled:

Building a Great Place to Work- A 6-Step System for Deliberately Creating your Workplace Culture.

Culture happens – for better or for worse. Every organisation has a culture. Proactively choosing to create your culture in a deliberate and intentional way will deliver financial and emotional benefits and build a high performing workplace – a great place to work - and you will be the envy of your competitors.

Click here to register for Building a Great Place to Work.

Minister for Western Sydney, The Hon. Stuart Ayres launched the Western Sydney Youth Orchestra (SYO) yesterday at Riverside Theatre in Parramatta. This is a major coup for the west which continues to see growth in the arts and culture sector. It I well known that growth in this sector contributes to the prosperity of the region through its role in influencing perceptions and liveability. The SYO also presents enormous opportunity for the young people in western Sydney by acting as a feeder to some of the words most renowned musical organisations. 

For close to 45 years, SYO has been a vital part of the cultural life of our nation by training thousands of talented young musicians and inspiring them to pursue their musical dreams and take their place in orchestras throughout Australia and the world. SYO has a strong track record of delivering a consistently outstanding educational and performance program and it has grown to encompass 12 orchestras with the launch of the new Western Sydney Youth Orchestra. SYO fills its unique training role within the sector by functioning as a ‘feeder’ of talented musicians to organisations such as the Australian Youth Orchestra (29% of participants), the Sydney Symphony Orchestra (27% of all participants), the Australian Chamber Orchestra (16% of all participants) and the Australian World Orchestra (32% of all participants).

SYO’s program not only equips members for a career as a professional musician. The orchestral training program teaches teamwork, discipline, dedication, leadership, and a commitment to excellence. Whatever career path these talented young people follow, they are likely to become leaders in and contributors to the community. In WSYO, young musicians aged 13-24 from across Greater Western Sydney will finally have the opportunity to access the full SYO orchestral training program as part of this unique cultural initiative. Our aim is to reduce the barriers to participation for young people across the West so that they have access to the very best arts and culture programs our State has to offer.

SYO is keen to work with local businesses in order to enhance their events and public profile, as well as develop avenues for funding so that scholarships can facilitate more young talented musicians being part of this ensemble. Please contact Sydney Youth Orchestras CEO Yarmila Alfonzetti about opportunities for your business with WSYO – yarmila.alfonzetti@syo.com.au

Leasing, as a means of accessing assets, of obtaining finance and of reducing an entity’s exposure to the risks of asset ownership, is becoming more and more important for many entities. As a result, the International Accounting Standards Board (IASB) and the US Financial Accounting Standards Board (FASB) initiated a joint project to develop a new approach to lease accounting.

On 13 January 2016, IASB issued IFRS 16 Leases. Australia has fully adopted this new standard and introduced AASB 16 Leases.

Application date

The new accounting standard will be effective for companies with annual reporting periods beginning on or after 1 January 2019. Early adoption of this standard is permitted. The transition period and comparative balances need to be considered.

Compliance Requirements – Lessee’s

All ACNC registered charities should comply with the ACNC reporting requirements. In general, the ACNC requires reporting entities to submit general purpose financial statements with non-reporting entities permitted to lodge special purpose financials statements.

Compliance Requirements – Lessor’s

There are no changes in the requirements for accounting by lessors, which means that the distinction between operating and finance leases still remain.

Key Changes by the New Standard

• There is no longer a distinction between finance and operating leases for lessees
• Lessees record a right-to-use asset and lease liability on the balance sheet for all leases
• Depreciation and interest charges on leases will impact the profit and loss
• Impact of lease payments on the cash flow statement include:
• 1. payments of principal are recorded in financing activities
  2. payments for short-term leases and low value items expensed in profit or loss are disclosed in operating activities.

Leases Excluded from the Scope of AASB 16

The following types of leases (and subleases) are scoped out of the new AASB 16 requirements:

• Exploration leases for minerals, oil, natural gas and similar non-regenerative resources
• Biological assets (apply AASB 141Agriculture)
• Service concession arrangements within the scope of Interpretation 12 Service Concession Arrangements
• Licences of intellectual property of a lessor (apply AASB 15 Revenue from Contracts with Customers)
• Rights held by a lessee under a licensing agreement (apply AASB 138 Intangible Assets).

Recognition Exemptions

A lessee may elect not to apply the new standard for:

• Short-term leases, typically these are leases with a period of 12 months or less
• Leases for which the underlying asset is of low value, such as laptops or phones.

Industries Impacted

The new standard is expected to have a wide impact across many industries in particular those industries with numerous and/or high value leases. Those industries that use extensive land and buildings and valuable equipment will be strongly impacted. The following industries are particularly likely to be impacted upon:

• Property and construction;
• Government and Not-for-Profit sector;
• Retailers’ with multiple outlets;
• Education and training;
• Health and aged care;
• Mining;
• Manufacturing; and
• Real estate

Need help

Please feel free to contact us to discuss your situation if you think your business will be affected by the new standard. Our professional team is always willing to be in your shoes and provide tailored advice for your business.

Radlee Moller

P: 9683 5999

W: www.cibaccountants.com.au

Boost your business with a simple question

Why do you do what you do?

It may sound like a philosophical question, but defining a strong, shared purpose for your organisation is much more than an abstract statement. It can create a key advantage in an increasingly fast-paced world, with tangible bottom line benefits.

When former P&G global marketing director Jim Stengel collected 10 years of data across 50,000 brands, he found a direct relationship between a brand’s ability to serve a higher purpose and its financial performance.

Businesses with ‘higher ideals’ – those focused on improving people’s lives – grew three times faster than their competitors. Investing in his resulting ‘Stengel 50’ over that decade would have been 400% more profitable than investing in the S&P 500.

EY, which recently defined its purpose as 'to build a better working world', conducted a global survey of 474 executives with Harvard Business Review Analytic Services. Its report, The Business Case for Purpose, found that while 90% of respondents believe their company understands the importance of purpose, only 46% use purpose to inform strategic and operational decision-making.

Purpose, values and strategy

There is a difference between your ‘universal purpose’ and your mission or strategy. Purpose is your reason for being – and it does not change over time although it may inspire change. Your mission is what you do, your strategy is how you plan to achieve your shorter-term goals – and your values will guide the way that strategy and mission are executed.

EY defines purpose as "an aspirational reason for being that is grounded in humanity and inspires a call to action." It is big picture and long term – and it allows an organisation to create value beyond financial metrics.

This is not a new concept – and in more recent years, business leaders have discussed things like triple bottom line, shared value and corporate sustainable responsibility. But the EY survey results highlight we still have some way to go in embedding purpose into strategic decisions.

For 77% of millennial employees, organisational culture is just as important as base salary and benefits.

Does purpose really matter?

According to the results of The Business Case for Purpose, 89% of executives say a strong sense of collective purpose drives employee satisfaction and 80% believe it can help to increase customer loyalty. Importantly, in a time of unprecedented change, 84% say it can affect the ability to transform.

Employee engagement

According to the 2015 Virgin Pulse survey, for 77% of millennial employees organisational culture is just as (or even more) important as base salary and benefits.

Having a strong sense of purpose can define that culture. It gives people a clear sense of what their contribution to the company means, and also how they should do things every day. It makes their work feel more meaningful – a key motivator for staff across all generations, because we all have an innate desire to contribute to something bigger.

A clearly defined purpose also makes delegating responsibility simpler as the business grows, because expectations are clear and consistent. And it also makes recruitment and retention much more effective. Employees need to believe in their organisation's purpose, and want to work towards it.

In 2016, LinkedIn named online real estate advertising company REA Group one of the top 25 Australian companies for attracting and keeping top talent, according to its data. In an interview, REA’s executive general manager of People and Culture Barb Hyman said the company’s purpose has evolved to “change the way the world experiences property.”

This has in turn translated into an open and transparent culture. “People connect with our purpose with their hearts and their minds and we know that the best work happens when people care deeply about what they are doing and why,” she said.

Customer loyalty

In 2012, Edelman’s global goodpurpose study found that 89% of consumers are more likely to buy from companies that support solutions to particular social issues. For more than half, purpose is the most important factor influencing brand choice when quality and price are equal.

For example, Airbnb's purpose is "belong anywhere". It's a refreshing and inspiring purpose with clear benefits for its users, striving to create the kind of warm interpersonal connections that are groundbreaking in its category. Airbnb has grown rapidly and is now valued at $25.5 billion.

A path to change

If everyone in the business is aligned to a common purpose, they can understand the need for transformation – and this empowers them to embrace it, rather than fear it.

As a ‘guiding light’, purpose becomes the key filter for ideas and decisions.

Google’s purpose has been articulated as “to organise the world’s information, and make it universally accessible and useful” – and this purpose drives its continual innovation in new products, technologies and services.

It’s a purpose with a greater good – giving more people access to information can make a real difference to inequality in the world. And it aligns with the company’s core mantra, which changed from “don’t be evil” to “do the right thing” when the company renamed itself Alphabet.

So how do you define your purpose?

As leadership consultant Simon Sinek informed us in his 2009 TED Talk (now viewed over 29 million times), inspiring leaders ‘start with why’. “People don’t buy what you do, they buy why you do it,” is his mantra, and his golden circle is a useful starting point for defining (or re-defining) purpose.

Perhaps the shining example of this is Apple. Its “Think different” promise, created in 1997 is still relevant today, highlighting the benefits of buying an Apple product. It’s not just a device, it promises authenticity, and to be a mode of self-expression. It’s no coincidence Apple is one of the most recognised and valuable brands in the world.

Creating financial value within the business and addressing relevant society challenges are not mutually exclusive ideas – in fact, this is the underlying concept of shared value.

Once you’ve articulated your purpose, be prepared to walk the talk. If it’s not real or believable, it will inspire cynicism rather than trust. Make sure every person in the organisation is truly committed to it, and align it with performance metrics and rewards.

Ultimately, a shared purpose should create strategic clarity. It allows you to focus on what really matters – and in the process boost productivity, performance, loyalty and the bottom line.

If you are interested in hearing more about our business expertise in Western Sydney, please contact Sam McCarthy at Macquarie Bank Parramatta on 0417 518 724.

• Struggling to keep your good staff for the long-term?
  
• The culture in your business feels like it is out of your control?
• Tired of unproductive conflict and misunderstandings in your team?
• Mistakes and errors caused by your staff costing you precious time and money?
• No matter what you try, your team just don’t seem motivated?

On TUESDAY 21 MARCH at 12:30 PM, Sandra Wood from Great Managers will share with you proven ideas that she has gained from years of insight into high-level business challenges. You will also have an opportunity to interact live with Sandra on the webinar and find out how you can reduce costs, increase productivity and ultimately profit in your business!

To join the free and exclusive webinar, simply register via this link to attend the live session. There will be no replays so to get the most value out of the session, block out this hour in your calendar on 21 MARCH, bring your lunch and prepare to learn some valuable techniques to get the very best from your staff!