Top firms aiming to cash in on recovery
SUFFOLK’S leading independent businesses have turned in a relatively robust performance during the later stages of the recession and the first difficult months of the recovery, according to a major annual study.
The 2010 Suffolk Limited report, which is to be launched today by chartered accountants and business advisers firm Grant Thornton, shows that turnover among the 100 biggest companies based in the county has fallen by a comparatively modest 5% compared with last year.
Profitability fared less well, with operating profit falling 14% and pre-tax profit 19% compared with 2009.
However, with the study being based on the most recent set of complete annual accounts from each company, much of the data relates to a period when the UK economy was still firmly in the grip of recession.
James Brown, a partner at the Ipswich office of Grant Thornton, said that, given the historic nature of the figures, the fall in revenue and profits was not as severe as might have been expected. The decline in revenues, which would have included an element of price pressure as well as falling demand, was the first recorded since the survey began in 2001 although it only took the total back to the level of two years ago, he said.
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Another positive factor was that staffing levels had remained virtually flat, in contrast with a significant fall the previous year. This suggested that companies were keen to retain the right people in anticipation of an upturn. However, a fall in salary costs indicated that staff were accepting a share of the pain in return.
A breakdown of the data by sector showed services companies to have suffered the biggest fall in profitability, down by 69%, while operating profit among manufacturers was down by only 7%.
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This was indicative of good management, with companies seeking “sensible” contracts, offering a strong margin, rather than chasing turnover for its own sake.
“In contrast with last year’s changes, companies are now more accepting of where the economy is and have had time to adjust,” added Mr Brown.