Year in review 2018: Winners, losers, beginnings and endings — looking back at 2018 year in Gold Coast business
The past year has been one of the most eventful on the Gold Coast in a decade, with large companies rising and falling, fortunes crumbling and the Commonwealth Games delivering mixed results. Here’s a look at who won and lost in 2018.
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THE past year has been one of the most eventful on the Gold Coast in a decade, with large companies rising and falling, fortunes crumbling and the Commonwealth Games delivering mixed results. Here’s a look back at the businesses and people who won and lost in 2018.
WINNERS:
Luxury car dealerships
A perfect storm of wealthy new residents, an expanding economy and a flurry of new models combined to make the Gold Coast the luxury car capital of Australia.
Makers scrambled to build new dealerships in the city, with a $10 million Bentley, Maserati and Lamborghini showroom opening in November, and Ferrari launching its Southport showroom close behind.
Mantra shareholders
Mantra Group shareholders cleaned up after approving the $1.2 billion sale of the company to Accor Hotels in a near-unanimous vote in May. More than 95 per cent of shareholders took part in the vote and 99.9 per cent of them voted in favour of the sale, which was finalised in June.
Gold Coast Airport
The city’s airport hosted a record 6.6 million passengers last financial year, up 1.7 per cent on the previous 12 months. The airport’s operator Queensland Airports Ltd, made major progress on it Project Lift redevelopment at OOL, completing an $86 million airside upgrade and advancing plans for a $50 million airport hotel.
National Veterinary Care
Ormeau-based listed company National Veterinary Care spent 2018 swallowing up veterinary clinics, taking its total portfolio to 97. It became New Zealand’s largest companion animal network after buying 23 new clinics across the ditch in August and has ambitions to climb to number one listed veterinary chain in Australia. NVL announced a 26 per cent boost to its revenue to $84.2 million, and a statutory net profit of $6.23 million — 41 per cent higher than FY17.
PWR Holdings
Another ASX-listed success story out of Ormeau, PWR Holdings develops and builds cooling systems for Formula 1 and V8 race cars, and military vehicles. It has a market capitalisation around $310 million. With founder managing director Kees Weel at the wheel, the company declared an $11 million net profit last financial year, up from $7.3 million in FY17. It is expanding its research and development work and invested $10 million in its new Centre of Excellence, which is next door to the company’s headquarters at Lahrs Rd.
Hospitality power players
Years of work by some of the Gold Coast’s best-known food and entertainment players came to bear with the launch of key new venues in the city — peaking with the much-hyped Nineteen at The Star. The nightclub and top restaurant combo, love child of Billy Cross and Simon Gloftis, launched in March with two VIP parties and was the centre of the action during the Commonwealth Games the following month. Other noteworthy opening included the long-awaited rooftop at Gloftis’s Nobby Beach Hellenika, and the opening of another Hellenika at the Calile Hotel in Brisbane.
Residential apartment developers
While the market may have cooled in Sydney and Mebourne, demand has stayed strong on the Gold Coast, where more than a billion dollars in residential apartment development is under way — and it’s selling. Projects by Meriton and Sunland are under way along the Gold Coast, while developer Barry Morris has also had a busy year. George Mastrocostas sold out his $55 million Labrador project in six months, Ralan Group’s $1.4 billion Ruby development began its life and 84 per cent of units in The Star’s first foray into residential development sold in eight months.
Condev Constructions
The Varsity Lakes construction company founded in 2002 by South Africans Steve and Tracy Marais was named the Gold Coast’s Business of the Year in 2018, after another wildly-successful 12 months. Condev was one of few Gold Coast-based businesses to score a major contract from the Gold Coast Commonwealth Games and have not ruled out a bid for an ASX listing. It undertakes projects in the $1 million to $35 million range and employs more than 100 staff.
Terry Morris
The veteran Gold Coast businessman behind the Carrara Markets and Sirromet wines was inducted as the 13th person in the Gold Coast Business Hall of Fame in 2018. Morris International evolved into a pioneer of database management and marketing after Mr Morris saw an opportunity to offer cheaper Queensland cigarettes to Victorians via mail order.
It now encompasses a variety of businesses including Carrara Markets, the Performance Driving Centre at Norwell, and The GoodTimes Pub Group, which owns eight hotels between the Gold Coast and Dalby.
Marine industry
Gold Coast City Marina & Shipyard — already the largest facility of its kind in the Southern Hemisphere — announced it would develop a further 20 hectares at its Coomera base to occupy 37.5ha in total as part of its Stage 2 development. Meanwhile, as the number of boats continues to explode on the Gold Coast, luxury boat builders Riviera also enjoyed success, exporting millions of dollars of their product to the US. Maritimo is also expanding, looking to double its manufacturing base as it to eyes larger markets.
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LOSERS:
Billabong
It was a sad day on the Gold Coast when beloved surf brand Billabong was sold off to the US owners of rival brand Quiksilver in March. The shareholder vote of 95.45 per cent in favour of the sale to Boardriders Inc came after two hours of vote counting and eight years of steady decline which has seen the company once valued at $3 billion sold for $208 million. The company has since shed scores of local staff and the new owner is looking for buyers of its iconic Burleigh headquarters for around $45 million.
IncentiaPay
IncentiaPay, which changed its name from BPS Technology in February, finalised the sale of Bartercard for $5 million to the company’s former chief finance officer Tony Wiese in November. The company lost its chairman the same month and then saw its shares plunge 66.66 per cent in a single day. The plunging value followed updated guidance where IncentiaPay said it no longer expected to deliver underlying pre-tax earnings for this financial year of between $3 million and $5 million. It also said it was unlikely to be able to draw down further on its current debt facilities for FY19.
Retail Food Group
Staff, shareholders, franchisors and basically everyone else involved with this Southport franchisor has a terrible time in 2018 as the company battled a slew of challenges, which came to a head when fed-up franchisees took claims of their mistreatment public a year ago. RFG’s market capitalisation, worth more than $816 million last November, was this week languishing around $56 million, with shares dipping as low as 30.5 cents. The company, which turned a $75.7 million net profit in FY17, careened to a staggering $307 million loss for FY18; is closing stores; and is at the mercy of its lenders, which have so far allowed RFG to maintain levels of debts which are well short of sustainable. The company lost a managing director, a CEO and a chairman, and its future rests on the experienced turnaround man and new chairman Peter George, whose 2019 performance will be one to watch.
G8 Education
The nation’s biggest childcare provider is on the comeback trail after a hair-raising 2018 that saw shares in the company plunge to $1.88, from early-2018 highs around $3.50, after a lull in occupancy for the first half of the year sent its net profit tumbling. The company has refinanced its loans and is targeting pretax earnings of between $136 million and $139 million this year and 81 per cent occupancy at its like-for-like centres by 2022. While the past year wasn’t the company’s best, it has set itself up for more improvement in 2019.
Dreamworld
The Gold Coast theme park icon entered 2018 still limping financially since the tragedy which claimed four young lives there in 2016 — and it leaves the year in similar fashion, having logged an $88.6 million loss. As the coronial inquest stretched out during the year, revealing errors, buck-passing, poor maintenance and various other negligence had contributed to the deaths, and much of the public’s good will — and trust — has evaporated. The return of visitors to the park has been slower than the company expected, and it has relied on price rises and increase visitor spend to prop up revenue. On the corporate side, parent company Ardent Leisure has restructured its operations, sold assets, appointed new CEO John Osborne, and announced new attractions for Dreamworld, which may improve its outlook for 2019.
Mega developments
Less than a month after sales opened in a VIP-studded Palazzo Versace launch, alarm bells began to ring around the $1.2 billion-dollar Spirit project.
Consultants on the project, championed by Mayor Tom Tate, reported not being paid, while Forise, the complex Chinese developer behind the project was reportedly enveloped in a devastating lending scheme in its home country.
It was then revealed Forise has quietly bought a controlling stake in an obscure ASX-listed mining fund, and that it had shed its Australian project manager, Gold Coast company Hickey Management. By October, the project was being actively shopped around to other developers and by November the landlord had locked the company out of its Surfers Paradise sales office.
A nod must also go to the $1.4 billion Jewel development for its litany of strife which included multiple workplace accidents, site shutdowns, design changes, sales suspensions and strict conditions being tacked onto the Queensland licence of its builder Multiplex.
Construction subcontractors
Unfortunately for one of the Gold Coast’s largest sectors by employment, the construction industry continued to be plagued by insolvencies, systemic flaws and legal problems that too-often left small subcontracting businesses holding the can.
The fallout from the collapse of Queensland One Homes continued in the past year ahead of public examinations in 2019, while subbies were also stung by the collapses of AB Hill Constructions and Future Urban Residential, the reticence of Grocon and a dispute between TPD Builders and Howard Group.
New security of payment laws and slightly improved powers for the QBCC may help in 2019, however more must be done.
Businesses hoping for a Commonwealth Games boost
While GC2018 delivered in spades for sporting fans, and left an inarguable legacy in the form of key infrastructure, the same benefits were not universally felt in local business. Key contracts for the Games were mostly awarded to companies outside the Gold Coast and Australia. Shops and cafes who stocked and staffed up for the April event found themselves out of pocket after the council over-egged its Get Set for the Games initiative and scared the customers away during what’s normally peak tourist season. Revelations afterwards that the council were warned of a possible exodus a year ahead of time, and scorn from politicians in denial did not help.
Busts and bankrupts
Those unfortunate enough to have business dealings, employment or investments with some Gold Coast businesses were rewarded with varying degrees of debt and despair.
Businessman Phil Sullivan — the founder of collapsed property developer City Pacific — declared himself bankrupt with debts of $78 million in July, but it didn’t stop him from living in a mansion, owning race horses and being involved with a $15.5 million loan to a developer.
The PR and lobbying firm at the centre of the contentious 2016 Gold Coast City Council elections was wound up by a court and placed under external administration over unpaid tax, with its director Simone Holzapfel finding herself having all sorts of problems throughout 2018.
A bitter marriage breakup left clients and creditors of Runaway Bay accountancy firm KSM Group holding the can, while three Hope Island restaurants which closed suddenly put up to 40 people out of work.
Some of the nation’s biggest sport stars were caught up in the $16 million Kingscliff hedge fund Goldsky Global, while an even bigger storm is brewing with the collapse of Halifax Investment Services, which was run by Gold Coaster Jeff Worboys and had $211 million invested by clients in three countries.
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