A fifth of fresh produce companies are failing while half prosper according to the latest analysis from Plimsoll Publishing.

The report looks at the top 1,539 UK companies and rated them strong, good, mediocre, caution and danger. The ratings are based on an assessment of the overall financial strength of the company over four years.

Strong companies are "simply well managed," said Plimsoll's senior analyst David Pattison. They average eight per cent margins and are debt free. Some 436 companies are rated strong for the second consecutive year. "They prove that once you have a solid business where management is in control, you can maintain this success irrespective of market conditions," said Pattison.

Those in the danger category are hampered by high debts and low - on average zero - margins and carry a massive four times the debt of average strong companies. "They are certainly most vulnerable to financial collapse," said Pattison. "Very often it is a question of management initially accepting the business has a problem. They must then take action today, rather than next week or the week after.

"If the pundits are right, and the UK market tightens towards the end of the year, then there is no doubt that the 337 companies already in the danger section will take the brunt of this downturn.