SYDNEY - Australian companies are cautiously optimistic about the 2010 financial year and have been proactive in dealing with the economic downturn over the last 12 months, a survey shows.
Ernst & Young surveyed executives from corporate Australia to extract a snapshot of market sentiment around sustaining and growing a
business amid the volatile economic climate.
It found that 76 per cent of respondents saw the impact of the current crisis on profitability as temporary.
"The results show Australian businesses are cautiously optimistic for the 2010 financial year, with far more proactive plans over the next 12 months," Ernst & Young's corporate accounts leader Patrick Winter said.
"Access to capital is still difficult, particularly for small and mid-cap companies, however organisations have implemented initiatives to reduce costs and manage cash and working capital more effectively," Winter said.
He said the survey results showed Australian businesses have been more proactive than global respondents around debt finance, including reviewing, monitoring and renegotiating debt covenants and considering alternative sources of liquidity. However, Australian businesses have been slightly less proactive in building working capital measures into management performance objectives and having an emergency plan for cash release, he said.
The survey found that 64 per cent were currently restructuring their business to meet new conditions and 68 per cent had already undertaken some degree of headcount reduction.
"The question now is whether Australian businesses have done enough to prepare for growth and capitalise on the upswing when conditions improve," Winter said.
The survey also found that while 53 per cent of respondents saw access to capital deteriorate over the past six months, 34 per cent of those with over $10 billion annual revenue reported improved access to capital in the past six months, reflected in the record capital raisings dominated by the larger ASX-listed companies.
"Many of our discussions with clients in recent months have focused on working capital and liquidity.
"Our respondents agree - only 15 per cent say that cash is not an issue for their business."
Ernst & Young said it surveyed 380 senior and board level executives from corporate Australia in June.
- AAP
