According to a report from Plimsoll Publishing, Mushrooms - Portfolio Analysis - 29 per cent of UK mushroom companies are now in financial danger with 17 per cent of firms “blatantly selling at a loss”.
“A number of driving forces seem to be affecting the industry at the same time, forcing current owners to consider their future involvement in the market,” the report finds
Plimsoll’s study revealed that a third of mushroom-company directors are more than 60-years old and that for 24 companies, succession is an issue. For almost half of the companies in the sector, sales are not keeping pace with inflation and average sales growth across the industry is negative: -2.4 per cent.
Against this background, a handful of companies are prospering and 27 have increased profitability in the last year. There are also 37 companies new to the industry having been established in the past 10 years. And two of these already have sales exceeding £5 million.
David Pattison, senior analyst at Plimsoll, said: “This effective two-speed industry is forcing some to feel like the market is in decline and that selling up or merging is a great way to save the company. On the flip side, the other companies grabbing all the growth and profit see an acquisition as a great way to continue their march into the market.”
Pattison has identified buyer and seller companies. Buyer companies are in the slight minority, numbering 47. “These companies are the best to consider if you are looking to sell your company or merge. They all are showing great financial strength and could all afford to a buy a company or make an investment in another company,” he said. The 51 seller companies are “likely to be amenable to an approach as many are losing money,” said Pattison. “Ten are losing money for the second year in a row.” l
