Australia's Top 500 Private Companies of 2024

Welcome to IBISWorld’s 2024 special report on Australia’s Top 500 private companies. Despite a challenging year defined by rising interest rates, inflation and labour market shortages, many of Australia’s largest private companies demonstrated remarkable resilience, achieving notable growth. Key sectors, including aged care, infrastructure construction and smaller consulting and accounting firms, performed particularly well, while others navigated significant challenges.

In this special report, we explore key trends, the biggest movers and shakers, and provide in-depth analysis of these leading companies’ strategic shifts. As we look ahead, these insights offer valuable indicators of where Australia’s private sector is heading.

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Stability at the summit

IBISWorld's Top 10 private companies for 2024 saw no new entrants this year and just one position change – Pallion, thanks to record-high gold and silver prices, leapfrogged United Petroleum for third place. Despite the variety of industries represented in the top 10, the overarching theme among Australia's largest private companies is stability. CBH Group was the only company to experience a decline, while the rest posted positive results, with Pallion and VGW Holdings having a standout year with double-digit growth. However, while these top companies held firm, the broader picture in sectors like residential construction tells a different story – one of volatility and significant challenges.

The combined revenue for the Top 500 private companies in Australia was $359.9 billion, an increase of 7.9% when compared to 2023's total of $333.6 billion. This growth rate is significantly lower than what was registered in the 2023 list, which falls in line with underlying pressures like the RBA pursuing contractionary monetary policy in a bid to limit inflation and a general slowdown in the Australian economy. The average revenue increased from $667.1 million in 2023 to $719.7 million in 2024, which shows that Australia's private sector has proven robust amid more challenging economic conditions, especially the largest players on the Top 500 list.

Under construction: The challenges facing pressured builders

Australia's residential construction sector has been beset with bankruptcies in the past year due to labour shortages, higher interest rates and rising material costs, among other significant headwinds. Higher interest rates in response to inflation in the post-pandemic era have cooled demand for the sector, putting residential construction firms under pressure. The Top 500 list reveals volatility across both house construction and multi-unit apartment and townhouse construction, with some big names like Hutchies Builders (#10) and ABN Group (#43) reporting strong growth, while others like Meriton (#23) and Bloc Holdings (#419) struggled in these conditions. The differences in results across these four companies can be attributed to different business focuses, reliance on debt and diversification of business lines.

The most striking development in this area has been a record number of insolvencies, causing several companies to drop off the list, including Lloyds Group, which was ranked 312th in 2023. In the 2024 financial year alone, nearly 3,000 construction companies entered insolvency proceedings, with many more expected as filings for 2023 and 2024 continue to trickle in. This wave of insolvencies not only reshapes the construction landscape, but also underscores the deeper, structural issues at play.  

A vicious cycle of training setbacks

Beyond immediate financial pressures, labour shortages have been a key factor in the sector’s struggles, creating a cycle where young tradespeople are unable to complete their apprenticeships due to shrinking employment opportunities. Since apprenticeships are tied to employment, these tradespeople are unable to complete their qualifications without steady and reliable work, which has led to a higher-than-average dropout rate, with apprenticeship completion rates sitting just above 50%. A second key factor contributing to this labour shortage is rising demand for infrastructure construction projects, which have pulled already scarce resources away from residential construction. This has stressed an already small labour pool further. The Construction division is unlikely to resolve its labour shortage anytime soon, as the issues affecting the labour pool are structural in nature.

The ripple effect of supplier struggles

The challenges facing the Construction division have impacted not only construction companies but the suppliers that serve them. Disrupted construction activity and elevated interest rates have cooled discretionary spending on renovations and other home improvement efforts for households. This has meant a challenging year for Top 500 companies supplying builders and consumers, like Bowens Timber & Hardware (#149) and Dahlsens Building Centres (#167).

Building the roads of tomorrow

While rising interest rates and labour shortages have hit the residential construction sector hard, firms operating in the infrastructure construction sector have fared better during 2024. Companies like Georgiou (#62), Enerven Energy Infrastructure (#339) and Leed Engineering And Construction (#415) all saw double-digit revenue growth, with Enerven recording a 30.6% year-on-year increase in revenue.

One key reason for this resilience is that the infrastructure construction sector has been sheltered from the prevailing economic conditions faced by residential construction companies. Federal and state governments have maintained, or in some cases increased, spending on large infrastructure projects with the goal of driving long-term productivity gains in the labour force.

As part of these efforts, Enerven Energy is strategically positioned to contribute significantly to the Federal Government’s energy transition plan. A prime example is Enerven’s involvement in SA Water's plan to reduce its carbon footprint by constructing a solar panel network across South Australia. Enerven Energy has taken on a range of projects from constructing this solar panel network to helping connect wind farms and battery energy storage solutions to the power grid. The expertise gained in these projects, coupled with the company’s focus on electrical infrastructure, will allow Enerven to capitalise on the energy transition as many similar projects will be required to hit allocated emissions targets.

With a government focus on infrastructure spending allowing these firms to buck the trend seen in other construction sectors, there are concerns that this expansionary fiscal policy might be contributing to persistent high inflation. Moreover, considerable government spending on infrastructure may have exacerbated labour shortages in the residential construction sector, as tradespeople were pulled over to fulfill demand on large infrastructure projects. This means that infrastructure construction firms have been able to avoid volatility seen in the wider construction sector.

Power moves: Major mergers and acquisitions are reshaping key industries

Beyond the construction sector, strategic shifts through mergers and acquisitions (M&A) have played a pivotal role in reshaping several key industries this year. Despite a cautious approach to M&A activity overall, many companies on the list posted massive growth through acquisitions.

Major players are ageing well

The aged-care sector stands out as a prime example of how M&A activity has reshaped industry dynamics, with larger players increasingly consolidating their dominance. Private companies like Bolton Clarke (#46) and Opal Aged Care (#63) have continued their march up the rankings with key acquisitions. Bolton Clarke has been on a spending spree in recent years, including acquiring McKenzie Aged Care in 2023, as well as Acacia Living and Allity in late 2021.

Not to be outdone, fellow riser Opal Healthcare acquired the eleventh-largest player in the aged-care sector, Bluecross, this year. These two private companies now represent the largest players in Australia’s aged-care space along with publicly listed Regis Health, which completed its own acquisition of CPSM Care. 

Following the Aged Care Royal Commission, Labor-government promises to increase staffing and placements and multiple scandals, the government has increased spending in an aged-care sector already heavily reliant on subsidies and grants. In 2023, Regis Health reported that roughly 70% of its revenue from services was government-funded and this figure is likely to increase this year as the aged-care sector gets a boost. 

Building success across the pond

In major acquisitions outside of health care, Australia’s largest privately owned civil contractor, BMD Group (#30), has accelerated its entry into the United Kingdom as it acquired TUSP, a UK-based infrastructure consulting firm. This acquisition follows BMD’s initial entry into the UK market under its own brand, leading to a 32.4% revenue rise in 2024. This growth trend highlights the strong performance of infrastructure advisory services and project management in an expanding market. 

Unity in Banking

Meanwhile in the banking sector, People’s Choice Credit Union and Heritage Bank have merged in order to offer a more competitive product under the new brand of People First Bank (#58). As a result of this merger, the new entity has shot up 59 places on the Top 500 list after recording revenue growth of 94.8%. People First Bank has stated that a large portion of its revenue growth can be attributed to the merger, but it has also seen growth in its deposit and loan portfolios during 2023-24. 

Small but mighty: How boutiques are winning the government game

This trend of strategic realignment isn’t limited to M&A activity alone – it’s also reshaping the consulting landscape. As public and private sector preferences evolve, the big four firms’ dominance is being challenged. Following recent public scandals and significant headwinds, the big four firms – EY (#20), Deloitte Touche Tohmatsu (#22), PwC Australia (#24), and KPMG (#31) – have all reported negative revenue growth for 2024. In contrast, smaller firms like BDO (#171), Findex (#186) and Grant Thornton Australia (#243) have posted strong growth, signalling a shift in the consulting market’s dynamics.

Big four on the backfoot

A decline in demand for consulting services from the private sector is a result of worsening conditions in the broader economy. High inflation, rising interest rates and labour shortages in certain industries have led companies to slash consulting expenses, significantly impacting core parts of these firms' businesses. While accounting services have remained strong revenue generators, strategy and human resource divisions have been the hardest hit by this belt tightening.

Not only has demand from the private sector diminished, but recent government initiatives have focused on placing lucrative government contracts with smaller firms. This shift has been driven not only by recent scandals but also by initiatives aimed at reducing reliance on large consulting firms. As a result, the value of contracts given to Deloitte, EY, KPMG and PwC has dropped almost 50%year on year. PwC in particular has faced significant scrutiny due to recent issues relating to its tax scandal, leading to its public sector consulting arm being spun off into Scyne Advisory.

Winning contracts and gaining ground

Boutique firms operating in Canberra have been some of the best placed to capitalise on this shifting landscape, allowing them to book new contracts that would have traditionally been given to the big four. Additionally, as companies increasingly focus on environmental, social and governance (ESG) initiatives, there’s been growing demand for consulting services in this area. Many companies are seeking expert advice to navigate the complexities of upcoming mandatory ESG reporting requirements. This trend is providing smaller consulting firms, particularly those with specialised ESG expertise, with new opportunities to expand their client bases and offer tailored services.

In the midst of an evolving economic landscape, many of the larger consulting firms have conducted job cuts to slim down and achieve greater profitability. Reduced hiring hasn’t just hit the lower levels of these firms, as partner promotions have also slowed with some roles being made redundant in order to hit targets.

In contrast, smaller consulting advisers have avoided such drastic measures, with firms like Grant Thornton Australia continuing to promote new partners and capitalising on opportunities created by changing market dynamics. With the big four expecting conditions to remain similar until the next election cycle, smaller consulting firms are well placed to use this unique opportunity to grow their client bases.

Pallion: Riding a wave of uncertainty

While other Top 500 firms have benefited from shifting operating conditions or mergers and acquisitions, Pallion has emerged as one of the biggest winners of 2024, but through a very different approach. It’s primarily involved in refining precious metals (gold, silver, platinum and palladium) and designing, manufacturing and distributing jewellery. Pallion's record-breaking year was largely driven by surges in gold and silver prices, influenced by various global factors.

Precious metals – including gold and silver – have long been viewed as a hedge against inflation, helping to preserve purchasing power over time. As the world grapples with high inflation in the post-pandemic era, investors have turned to gold and silver in droves, seeking a safe investment to shield them from the Australian dollar’s eroding value.

Another factor that has seen precious metals shoot up in value has been increased political tensions, with various conflicts causing uncertainty in global markets. The Russia-Ukraine conflict, the Red Sea crisis and rising aggression in the South China Sea have prompted investors to leave traditional fiat currencies behind in search of tangible assets that can weather such uncertainty.

Silver, while not always seen in the same light as gold in terms of an inflation hedge or active store of value, has spiked in demand, partially due to Australia's (and the world’s) focus on renewable energy. Solar panels have long been seen as a way for households and businesses to reduce their electrical bills, and as a means for governments to hit carbon emissions targets. A solar panel measuring 2.0 metres squared can require up to 30.0 grams of silver in the form of a paste, supporting demand for the metal. With demand for solar panels only rising as businesses strive to hit ESG targets, Pallion has benefited from increased silver prices.