32 ’How you doing?’
I borrow Joey Tribbiani’s famous phrase and hope he doesn’t sue me for using it. Paris Smith’s Andrew Heathcock writes
The spotlight has been shone onto the top regional companies for a third year and makes interesting reading for a variety of reasons; comparing your turnover results with your peer group, for instance, and looking to see if there are messages in the information which can help to predict the future.
We all know that while turnover can be vanity, profit is unarguably sanity; the former is a ’nice to have’ but the latter essential.
For that reason, the list only tells us a limited amount about the companies concerned. I do, however, work on the assumption that all those in management are keeping costs under tight control so that, in a flat market (at best), any growth in sales must, by definition, improve profits.
There are mixed results in several well-represented sectors. Of the
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six car dealerships in the top 50, three have increased sales, two have not and one has come out even. The picture is similar if you look at all the dealers in the list – 19 – with nine up, eight down and two reporting no change. What does that tell us? It is difficult to generalise on such limited data but it seems to me to make the (obvious) point that some businesses do better than others in any market. Is it down to ’better management’ or are there other reasons? One thing we can say for sure is that when they all report increased sales we will be out of the economic doldrums as people and companies feel confident to start buying again.
There are six universities in the list and all show revenue gains. I doubt very much if this will be the same next year given the potential drop in student numbers caused
by the increase in tuition fees and the planned squeeze within the public sector. In fact, I will be surprised if we find any are growing at all.
People say that law firms are beneficiaries whatever the economic weather. Is that borne out by results here? Of the eight in the list, six are ’up’, one is ’down’ and one is ’even’. The sales increases are modest however (I would say that wouldn’t I?) barely covering inflation and demonstrate a recovery following two or three years of falling income. Overall, only 69 out of the full 250 list show turnover declining – 27.6% – but while the statistic falls to 22% in the top 100 the figure is a more concerning 52% in the bottom 50.
With UK GDP very much dependant upon consumer spending (60%+) it is good to
see retail names such as Fat Face and Hobbycraft driving forward as well as manufacturers such as Millbrook. A welcome surprise is that recruitment agencies are on the up. Agriculture seems to be doing well, too (or at least in the period in question). Things have moved on, of course, since the time covered by the figures. I hope for the better. You will have spotted therefore that the headline at the top should have been “How were you doing?“.
Details: Andrew Heathcock 023-8048-2211
andrew.heathcock@parissmith.co.uk
www.businessmag.co.uk
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – DECEMBER 12/JANUARY 13
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