Co-ops and Mutuals sector posts revenue growth of 10.8 per cent despite economic uncertainty

22 June 2023

• Revenue up by 10.8% across top 100 co-ops and mutuals
• Earnings grow by average of 27.1%
• West Australian-based CBH retains top position as Australia’s largest co-op

Australia’s top 100 co-operative and mutual businesses defied a raft of global and domestic economic headwinds to boost revenue by 10.8 per cent to $37.7 billion in the 2022 financial year.

The tenth annual National Mutual Economy (NME) Report produced by the Business Council of Co-operatives and Mutuals (BCCM) also showed that the sector recorded strong asset and earnings growth during the year.

Earnings across the top 100 continued to grow at an average annual rate of 27.1 per cent, although profitability in the largest sectors of agribusiness, financial services, health insurance and motoring was impacted by global energy and commodity price volatility.

The Chief Executive Officer of the BCCM, Melina Morrison, said the report demonstrated the robust nature of member-owned businesses, which were well positioned to withstand periods of economic uncertainty due to their lean operating structures.

“With global instability, the post pandemic world and climate concerns looming large, co-operative and mutual enterprises are more vital than ever to lead the way towards sustainable and equitable futures,” Ms Morrison said.

“Co-ops and mutuals, although often overlooked, play a critical role in shoring up supply chains through investment in domestic infrastructure to improve sovereign capacity.”

Top 10 CMEs by turnover in FY2021-22

• CBH (WA) $6.23 billion
• HCF (NSW) $3.52 billion
• Capricorn Society (WA) $2.93 billion
• RACQ (QLD) $2.05 billion
• HBF Health (WA) $1.86 billion
• Australian Unity (VIC) $1.36 billion
• RAC (WA) $1.23 billion
• Teachers Federation Health (NSW) $863 million
• RAA (SA) $731 million
• Catholic Church Insurance (VIC) $726 million

The NME report, which is a barometer of the health of the sector, will be launched today in Sydney at a summit of CEOs from Australia’s top 100 co-ops and mutuals.

CEOs gathered at the summit will discuss a range of challenges facing the sector including opportunities to drive growth to achieve scale as well as how to measure the value created by member-owned businesses.

“Like other business sectors, Australia’s co-ops and mutuals are grappling with the challenges posed by geo-political events abroad as well as domestic pressures such as high interest rates and a tight labour market,” Ms Morrison said.

“Importantly, though, co-ops and mutuals have proved their resilience, continuing to perform strongly, just as they did through the pandemic and the floods and bushfires that impacted so many Australians in recent years.

“Longevity is a hallmark of this business model with 68per cent of the top 100 operating for more than 50 years.”

The profitability of agribusiness co-ops was impacted in 2022 by the war in Ukraine, which simultaneously caused sharply higher grain prices on commodity markets and increasing fertiliser input costs, resulting in revenue growth but also a decline in profitability.

The number of co-operative and mutual businesses rose slightly during 2022, despite consolidation in key sectors such as banking and financial services.

There were 1848 co-ops and mutuals at the end of fiscal 2022, compared to 1832 at the end of the previous year.

The report found that Australia’s co-ops and mutuals had a combined active membership of 33.3 million (up from 31.7 million previously) and employed at least 76,000 people at the end of 2022.

While more Australians than ever are members of at least one co-op or mutual, Ms Morrison said recent polling by the BCCM showed that most Australians were still largely unaware of the business model’s existence.

“Under-representation of co-ops and mutuals in University courses such as law, accounting and business studies has undoubtedly contributed to this lack of awareness,” she said.

“Given the solid performance and longevity of the businesses this was a missed opportunity to enlist the assistance of co-ops and mutuals to address cost of living and other mounting pressures on Australians.

The NME report showed that the greatest number of co-ops and mutuals were in the financial services sector, followed by health insurance and agribusiness.

The West Australian grain handling group CBH retained its position as Australia’s largest co-operative, with turnover of $6.23 billion, a significant increase on the $3.99 billion recorded in fiscal 2021 and a net profit of $497.7 million. CBH is also Australia’s 3^rd largest privately owned business according to Ibis world Australia’s Top 500 Private Companies 2022.

CBH was followed on the top turnover table by health insurer HCF ($3.52 billion), automotive parts co-op Capricorn Society ($2.93 billion) and Queensland-based motoring club RACQ ($2.05 billion).

Media enquiries: Sue Frost P&L Corporate Communications 0409 718 572

Link