Andy Grimbly of PwC: Top 100 list showcases a resilient economy that can weather political uncertainty
The Top 100 list is a snapshot of a resilient regional economy in Norfolk and Suffolk, writes Andy Grimbly, Norwich senior partner at PwC.
Reviewing the accounts of Norfolk and Suffolk’s Top 100 performing companies is an interesting task.
There will always be familiar names – the bedrock of our local business community – and new entrants showing the best of what our innovative region has to offer. Here are my observations on the 2017 Top 100 list.
1. Little churn points to a stable economy
Despite a few new entrants, the names on the list remain broadly similar to last year. Some might say that little change means the economy is stagnating, but on the contrary, it shows that our local economy here in the East is resilient and can weather the storm of political uncertainty, benign oil prices and a weaker pound, which is helping boost net exports.
Overall pre-tax profits have risen from £1.4bn to £1.6bn – despite operating in tough market conditions – and the combined revenue of the list is more than £20bn, up nearly 5% on last year. While all parts of the UK are likely to see some moderation in growth due to a number of factors, including uncertainty around Brexit, our UK Economic Outlook (March 2017) indicates that none of the UK regions should fall into recession in 2017 or 2018 and that the East Anglia economy is expected to grow in line with the UK average of 1.5% in 2017/18.
2. Food and drink sector remains buoyant
Alongside General Retail (25 members), businesses working in food, drink and agriculture continue to dominate the Top 100. Twenty four food, drink and agri-businesses in the Top 100 list enjoy combined sales of £6.27bn, which accounts for just under a third (31%) of the list’s total revenue, with profits nearly doubling from the last list to £839m.
Underpinning growth in this sector is investment, innovation and expansion into new markets. For example, Bury St Edmunds-based Treatt (position 59) recently posted strong first-half growth in revenues and profits due to a number of new business wins.
3. The power of partnering to reduce costs
Interestingly, strategic partnering and collaboration are really showing themselves more readily this year among the Top 100 and which can be seen in some ways through the relative success of business models such as Anglia Farmers, whose profits rose this year, showing that there are benefits in strategic partnering to manage costs.
This type of company may have looked to reduce costs by partnering to buy third-party goods and services such as marketing, logistics, IT, property and production costs, which account for between 15-25% of an organisation’s total cost base but are sometimes not given the same level of attention as other cost lines such as payroll or cost of goods.
Andy Grimbly is Norwich senior partner at PwC.