March 10 2014 Latest news:
Wednesday, December 4, 2013
Essex’s top firms are emerging “leaner and stronger” from the battering they sustained following the 2008 Credit Crunch era, a new report has found.
Essex Ltd 2013, a report which tracks the performance of the county’s 100 largest independent companies, found that while performances were not outstanding, their relatively high level of debt fell and profit before tax rose across the board by 8.5% from £168m in 2012 to £182m this year.
The study, which is seen as a barometer for the economic performance of the county., presents a mixed but relatively upbeat picture of the Essex economy with turnover up by 2.9% on last year and now standing at £8.6billion.
But operating profit dropped by 9.9% to £241m, and 13% when comparing ‘like with like’.
This was largely due to the exceptions of two firms, and if these are removed, operating profit rose by 6%, or 1.3% when joiners and leavers are removed, the study’s authors, financial advisers Grant Thornton and law firm Birkett Long, pointed out.
The report’s finding were presented by James Brown, practice leader at Grant Thornton, and Tracey Dickens, head of commercial and corporate finance at Birkett Long, at an event in Billericay,
The analysis of the 100 members of the group can be split into seven sectors - retail and wholesale distribution (25), services (23), property and construction (16), transport (11), manufacturing (11), motor retail (8) and healthcare (6).
Sector share remained almost identical to last year despite some changes in actual turnover by individual sectors. The services sector saw the largest gain in turnover, up 11%, but this can be attributed to the fact that the sector had a net gain of four companies.
All other sectors grew turnover by between 2% and 4.5%, except for retail and wholesale distribution where turnover fell by 0.5% and transport, where it decreased by 1%.
Retail and wholesale accounted for £2,410m, property and construction £2,026m, and services at £1,238m. The smallest sector by turnover is healthcare at £450m.
There were mixed fortunes across the sectors when it came to operating profit, and the services and property and construction sectors saw falls of almost 53.9% and 22.3% respectively.
Manufacturing was a notable exception, but this was because it came from a low base, improving its operating profit by 86.9%, largely due to a major player which turned in a profit following a loss the previous year.
The report is compiled using the firms’ most recent publicly-available accounts, which must have their principal trading address in Essex.
It therefore relates mainly to a period when the UK was beginning to show signs of growth following the longest episode of economic decline in recent history, it points out.
“The report gives an intriguing insight into how Essex Ltd has performed during these testing times and provides a snapshot of the health of the county’s economy as Essex businesses.”
Top of the Essex Ltd table is national newsagents chain Martin McColl, which dominates the retail and wholesale distribution sector, the largest of all the sectors in Essex Ltd.
It saw its turnover rise by 4.8% to £845million, represented 35% of turnover in its Essex Ltd sector.
Retail and wholesale remains the largest employer with 18,880 but average wages across the 100 Essex Ltd companies were lower than in neighbouring counties.
Across the sectors, 56,403 employees work for the top 100 firms, and there was a marginal rise of 589 staff. but its average pay is relatively low - £20.7k compared to £22.3k in Suffolk Ltd and £24.4k in hi-tech Cambridgeshire Ltd.
The top 10 firms by turnover are dominated by six property and construction firms, which contributed 33% of Essex Ltd’s total sales and 28% of its operating profit.
The authors of the report point to the “continued challenging economic conditions”. Gearing, a measure of the extent to which the companies in Essex Ltd are funded by debt, fell from 133% last year - and 166% the year before - to a healthier 119%. But this compares to 37% in Grant Thornton’s Suffolk Ltd report, and 33% for its Cambridgeshire Ltd equivalent.