6 November, 2009
By Philip Hopkins - The Age
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The 2009 Age | D&B Victorian Business Awards - Retail category winner
THE roller-coaster Australian dollar has been wreaking havoc on the plans and performance of many Australian companies. Beacon Lighting is no exception.
"The $A had a big impact on our business last financial year," said chief financial officer David Speirs.
"We import about 80 per cent of our products, mainly from China, and were paying more due to the dollar. We had some contracts in place, but it went from the high 90s to almost 604, so the contracts helped maintain the level of prices. It had a big impact on our margins, but sales grew at a stronger rate."
Mr Speirs said the company had an absolute focus on its expenses. "It was not a free-forall, but we continued to spend on things that could add value to the company, like marketing, but we were very conservative in growing any of our other overheads," he said.
Sales increased in the 2009 financial year to $85.2 million, still 11.8 per cent above the previous year's $76.2 million but below the 18.75 per cent increase the year before. The "drop" in the growth rate was still to a percentage most companies would die for.
The performance was enough for Beacon Lighting to win The Age I D&B Business Award for Retail. Beacon was both the category winner and overall winner of The Age/D&B award two years ago.
The awards, which began in 1993, seek to promote, acknowledge and reward outstanding business achievement. Criteria include credit-worthiness, business risk, research and development, and employment growth.
Beacon has been adding staff at a similar rate of growth. Employee numbers have grown from 365 in 2007 to 422 last year and 437 this year.
The company, which was founded by Ian Robinson in 1974, has found that greenhouse issues are also becoming a driver of sales as people become more aware of how much energy light globes use. "People are also looking at their lighting as well," Mr Speirs said.
Beacon Lighting has also branched out into selling fans, including some the company has helped design and patented internationally. "Fans can be a very energy-efficient solution for cooling and heating. Fans in summer ... they don't cool the temperature down, but they circulate the air," he said.
Most of the fans are reversecycle. "As the heat rises to the top of the room, the fan forces the heat down from the ceiling. You are not using as much energy in heating up the place, even in winter."
Beacon Lighting now has 62 stores, of which 19 are franchises, making it the biggest retail lighting business in Australia and one of the biggest in the world. Lighting is a fashion-conscious industry, and Beacon's agents go to Europe, particularly Italy, every year to check out developments.
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D&B is the world's leading provider of business-to-business credit, marketing and purchasing information and receivables management services. D&B manages the world's most valuable commercial database with information on more than 150 million companies.
Information is gathered in 193 countries, in 95 languages or dialects, covering 186 monetary currencies. The database is refreshed more than 1.5 million times daily as part of D&B's commitment to provide accurate, comprehensive information for its more than 150,000 customers.
The Australasian operations were bought out by the senior management group in August 2001. It was the first MBO of a wholly owned subsidiary in D&B's history worldwide.
Today Lazard Carnegie Wylie owns an approximate 90% stake in DBA and the local management team a 10% stake.
Strategies for future growth include developing DBA's commercial and consumer credit referencing business; expanding its receivables management outsourcing business; maintaining its lead in the development of unique credit and risk scoring products; and developing new products specifically tailored to the Australasian market. DBA currently employs over 500 people in Australia and New Zealand.
