Positive vibes as regional economic barometer goes up

BH&P partner: Howard Ringrose
BH&P partner: Howard Ringrose
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Welcome to The Star/ Barber Harrison & Platt 2012 Top 100 SME’s Survey.

Another year has passed and the regional economic barometer that is our Top 100 SME survey has now arrived. In short, there has been quite a lot of movement in terms of the individual companies featuring in this year’s Top 100 which in part can be explained by changes in fortunes. However it is fair to say that some companies featuring last year that do not feature this year have not necessarily suffered a downturn or even seen a decline in their profitability. I refer to this later. The key message that can be deduced from the analysis is that the region’s SME’s, on the whole, are generating more profits than last year.

To summarise the headline results:

Turnover across the Top 100 SME’s has grown by just under 10 per cent compared to last year

Pre-tax profits have grown by over 55 per cent

A more modest increase in employee numbers of around 2 per cent, is perhaps less surprising

In terms of the sectors where profit increases are most prominent, our analysis reveals that Manufacturing, Metals and Service sector businesses are leading the way. A more subdued increase in profits has been experienced by the Retail sector.

Furthermore, while the amounts are low in ‘pounds and pence’, some growth and a ‘net’ return to profit does feature in the Construction sector, which is promising to see.

Geographically, we have reviewed the results by major town and city in the region. The most significant growth in profits has been seen in Doncaster and Barnsley, with more modest increases in Sheffield, Rotherham and Chesterfield.

To understand the reasons behind the key movers in the survey, it has been revealing to explore who the new entrants to the Top 100 are, and also who has dropped out. Explanations for new entrants include business acquisitions boosting results, significant increases in turnover perhaps due to new contracts or increased demand but also previous year’s results being subdued by one-off large bad debts or product development costs.

In terms of the companies falling out of the table this year, the reasons range from squeezed margins, volatile commodity prices, investment for the future, so that should be positive long term, to continuing difficulties due to the economic climate.

On a positive note, some companies do not feature this year as they have grown to ‘Large’ status, and so no longer meet the criteria of SME. In addition, one or two have been subject to takeover activity so have been absorbed into larger groups.

Overall then, a positive message can be derived from the survey, in that the region’s SMEs are more profitable. Trading difficulties remain however and certain sectors are still struggling, eg retail, distribution, property development and construction. We look forward to seeing more companies in these sectors vying for inclusion in the Top 100 as soon as economically possible.