The latest UK fresh produce industry report released by market analyst Plimsoll has outlined some positive signs as the market looks to recover from the effects of the economic downturn.
According to the latest 'Plimsoll Analysis', 366 of the top 984 companies in the market are growing at more than 10 per cent per year, while also making healthy profits.
'Firstly, it makes a nice change to have some positive news to report,' said David Pattison, senior analyst and author of the new Plimsoll Analysis report. '366 growing, increasingly profitable companies have either tapped into a new, fast-growing revenue stream or are just the best performers in the old ones. Anyone struggling to make the most of the recovery should look at these companies and ask themselves 'what do these guys sell, make or do differently to me?''
However, while many of these companies are 'breaking new ground' and leading a sustainable recovery, there are 109 other comapnies whose sales growth is masking something 'much more sinister', Plimsoll said.
'Essentially, there are two types of growth in the market – Good v Bad,' Mr Pattison noted. '109 companies have achieved over 10 per cent sales growth but in doing so have seen their profit margin collapse. They are simply overtrading.
'The accolades of growth are all well and good but the bills need paying too,' he added. 'More worryingly, 12 of these companies have been loss making for two years – even with double digit sales growth I doubt they will make it to a third.'
Mr Pattison warned that while the top 366 companies were leading the way, there remained 155 companies facing a very bleak future.
'Losing sales, profits and probably most of their remaining options, these companies have been rated as 'Danger' in our report,' he said. 'Time is running out and only a takeover or a rapid turnaround is likely to redeem their situation.'
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