Published on the 02/11/2012 | Written by Newsdesk

The annual TIN100 Report* has highlighted a trend towards increased exports to Aus, investment in research and development and bigger headcount, despite the depressed global financial climate…

New Zealand’s $8b technology sector is continuing to grow export revenue and employ more staff despite challenging global market conditions. In the 2011-12 year TIN100 companies increased their combined revenue by 2.2% to $7.28 billion despite a combination of exchange rate headwinds and tough international markets. The next 100 companies ranked by revenue (TIN100+) grew by four percent to $679m.

With the NZ/US dollar exchange rate at peak levels, TIN100 companies’ sales into North America and Europe fell, but sales into Australia grew seven percent to 30 percent of total TIN100 revenue. With the steady decline in revenues from exports to the US over recent years, the report reveals that Australia is providing a safe haven and is a strong growth opportunity for New Zealand’s technology companies, especially IT services businesses. The changing global economic environment has resulted in a shift in high-tech export markets but overall TIN100 export sales increased by 2.3 percent to $5.18b over the same period.

According to TIN100 Report publisher, Greg 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.

In addition to this swing to Australian exports, spending on research and development, and sales and marketing, increased as TIN100 companies shifted their focus from business survival to stimulating profitability.

“As the revenue profile of these companies gets larger they are showing increasing maturity and a preparedness to invest in their own futures,” 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 four and two respectively,” he says.

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 eight percent and sales and marketing spend up by five percent.

“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 TIN100 companies, which employ a total of over 28,800 staff, globally increased staff numbers by 5.2 percent across the year. The largest growth in staff numbers came from the IT services and support sector which increased its combined headcount by 14 percent, driven by growth of 440 staff at Datacom. Many companies highlighted the struggle to recruit people with specialist IT skills, making it a growing issue for CEOs, the report reveals.

2012 TIN100: Top Ten Companies by Revenue

Rank	Company	2012 Revenue
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

2012 TIN100: Ten Companies to Watch
The companies with the largest revenue growth in 2012

Rank		Name	2012 Revenue	Growth ($000)
1		Datacom Group	$788m	$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

*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 by Technology Investment Network in association with IRL (Industrial Research Ltd) as well as with sponsorship from NZTE (New Zealand Trade and Enterprise) and the Science + Innovation division of the Ministry of Business, Innovation & Employment (MBIE). The Report is a critical reference for benchmarking the performance of New Zealand’s 200 largest globally focused technology companies.