Profitability and turnover among New Zealand medium-sized businesses increased in the 2011 financial year, according to the latest GE Capital Mid-Market report released today.
The Prime Minister, Rt Hon John Key, joined GE Capital in Auckland to launch the latest report, entitled Inside the Mid-Market, which reports on the outlook of the Mid-Market (defined as businesses generating between $2million and $50million in annual revenue) in New Zealand and key trends.
The findings show that Mid-Market enterprises increased their profit margins by one point, moving from 6.8% in the 2010 financial year to 7.8% in 2011. Mid-Market turnover also increased by 1.8% to $145 billion, along with the number of Mid-Market businesses, which rose by 2.5% to 21,049 in 2011. New Zealand businesses as a whole recorded a 0.5% fall, shedding 2,240 businesses over the same time period.
Speaking at the GE Mid-Market Summit today, Greg White, GE Capital Chief Operating Officer, said: "If the Mid-Market succeeds, New Zealand succeeds. This sector is vital to New Zealand's future growth and it continues to be the cornerstone of the economy, contributing $60.4 billion in 2011 and one in three full-time equivalent jobs."
"As the New Zealand economy grows, we can see Mid-Market businesses improving their outlook and sharing in the optimism that is returning after the GFC. Improved profitability and rising revenue are both good signs and confirm the longer term trends we have been seeing."
"It was pleasing to see these improvements reflected in some of New Zealand's signature industries such as agriculture, forestry and fishing which experienced a continued growth in the number of Mid-Market companies operating in the sector."
The report also looks at how Mid-Market businesses prepare for a change in ownership, while maintaining business continuity.
"Last year's report identified succession planning as a key issue for this sector. This year's report confirms succession planning is one of the two key risks for the Mid-Market as many businesses often rely on a single person's vision - a huge benefit when looking at growth, but also a risk for long-term sustainability."
"From our experience in working with hundreds of Mid-Market businesses in New Zealand, we know that succession planning is something that should be planned for early and not left to chance."
"To evolve as an economy, we need to continue to focus our attention on the Mid-Market and GE Capital is committed to understanding, advocating and supporting its future growth."
Louisa Walsh
GE Capital Australia and New Zealand
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