Annual Review 2006 - PwC

Retail and
Consumer
The Australian business environment is being reshaped by
fundamental demographic and economic shifts. Ageing baby
boomers are driving market demands and changing the face
of the workforce, while the impact of high consumer debt,
spreading drought, dropping petrol prices and strong
economic growth have placed contradictory pressures on
consumer confi dence.
In 2006, the grocery supply
chain continued to be
reinvented by the major
supermarkets and their
suppliers, driven by technology
and the need to improve
effi ciency and productivity.
Corporate social responsibility,
product recalls and price
defl ation surfaced as additional
challenges for businesses
forced to respond to the rapidly
Case
Study
changing sector environment or
face being left behind.
Despite these many factors, the
sector experienced signifi cant
growth in 2006, especially in
retail sales. Despite some
setbacks, consumer confi dence
has not wavered as the
economy and equity markets
continue to perform well,
supplemented by high levels
of employment and wages.
Moraitis:
Unlocking the value within
The Moraitis Group, founded and operated by a group of family
shareholders over the past 50 years, has grown to become the preeminent
grower, packer and supplier of fresh fruit and vegetables to
the Australian market. Key customers include Australia’s major
supermarket retailers together with a vast array of independent fruit
and vegetable retailers.
The Moraitis Group wished to achieve an outcome that would
enable shareholders to unlock a portion of the value built up in the
business, while positioning Moraitis to strongly capitalise on a
diverse range of further growth options. In response, PwC’s
Corporate Finance team structured a unique, customised
transactional solution that could achieve both.
The transaction was widely recognised as market leading and
resulted in a recapitalisation of the business. Moraitis Group also
joined with a large Australian bank and private equity provider to
facilitate the continued growth of the business in partnership with
existing Moraitis Group shareholders.
The coming year should
continue to see these many
infl uences result in a positive
net effect. However, to remain
buoyant and strong, retailers
will be required to constantly
engage with their customers
and understand their needs,
while sourcing products in a
sustainable manner and
resisting pressure on costs
and margins.
The PwC advisory team not only provided strategic corporate
fi nance and mergers and acquisitions advice, but also delivered
signifi cant value to the transaction through the provision of
comprehensive vendor due diligence.
“When we embarked upon the
transaction we were obviously a
little nervous and apprehensive.
However, the professionalism,
attention to detail and client service
we experienced with PwC made
the journey very comfortable and
satisfying.”
Nick Moraitis, Managing Director and CEO, The Moraitis Group
Annual Review 2006
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