Plimsoll Publishing’s first edition report on the fresh produce trade for 2008 highlights the most profitable companies and the best trading partners in the sector.

The Plimsoll model assesses each company on both its commercial strength and financial strength. The best trading partners are getting this balance right. Based on this combined measure, five of the best in the industry are A G Thames Holdings, Berry Gardens, Branston, JP Fresh and Poupart.

The report also measures companies’ sales and market performance looking at sales growth and sales return on total assets. “The difference in sales growth between individual companies in this industry is dramatic,” the report states. “Only five per cent of companies maintained the same level of sales as last year. The total market size increased by 11 per cent last year. Estimates place this total market size at £16.86 billion, up from £15.19bn last year. Yet this growth was not shared by all.”

The figures show that an average company in the fresh produce trade, sales are increasing by 7.2 per cent. Almost one in three of the companies analysed recorded a fall in sales with an average fall of 17 per cent. Over two thirds of the companies recorded an increase in sales, with an average increase of 15 per cent.

Half of the companies recorded a sales growth between 14 per cent and -14 per cent. “In general, the larger companies are growing at 13.3 per cent growth, compared to the smaller companies who are growing at 3.2 per cent.”

But when it comes to gross profit margins, it is the smaller companies that are outperforming their larger counterparts. “The average gross profit margin of a smaller company is 20.5 per cent outperforming their larger counterparts who manage 10.9 per cent,” the report found.

And on pre-tax profit, In general the larger companies are not outperforming their smaller counterparts. The pretax profit return on total assets of a smaller company is similar to that of a larger company at 2.4 per cent.

The report concludes that there are examples of “excellent profitability” within the fresh produce trade and that industry averages also compare well with UK industry at large.

Topics