Plimsoll has responded to a backlash from the industry following the publication of its Analysis - Fresh Produce report in June, which found that more than a quarter of fresh produce firms are at risk of failure under a prolonged slowdown in the UK economy.
Earlier in the summer, Plimsoll concluded that a record number of fresh produce companies are on the danger list, and 3,508 jobs could go. But in response to an unwelcome reception to the news from the industry, the analyst has produced an updated study to incorporate the very latest figures and bring the picture right up to date.
Plimsoll received feedback from the original publication stating that, in general, companies were not experiencing too much difficulty in retaining sales. This is borne out in the updated analysis, which puts current market growth at a respectable six per cent. This is, however, down from the previous year’s eight per cent. Some 838 of the 1,200 companies analysed are holding or increasing sales on last year.
However, this headline hides some worrying trends, says Plimsoll:
• 28 per cent of companies are currently selling at a loss
• 50 per cent of the 1,200 companies are making less profit than last year
• Despite the alleged slowdown in lending, 25 per cent of companies are in more debt now than they were 12 months ago
• 200 companies are currently rated as a high risk of failure in this updated analysis.
Plimsoll said: “Clearly, while sales in the market continue to grow, albeit at a slower pace than last year, this buoyancy is distracting some directors from other areas of the business which require urgent attention.”
David Pattison, senior analyst on the project, said: “The reality is, sales teams are very rarely privy to the full picture. All too often, they are unaware of the costs of overheads, the levels of debt and how their sales add up in profitability. The latest figures do seem to suggest that the focus has switched from profit to sales, as companies grab business almost at any cost! The old adage has never been more apt, ‘sales for vanity - profit is sanity’.
“The Plimsoll Analysis is a tool for measuring the current economic risks, as it allows companies to understand their market and their competitors better. In such stretched economic conditions, companies need to assess and understand who is a long-term threat in the market and which companies are following an unsustainable strategy. This knowledge could be the difference between spotting a potential acquisition at a bargain price - and becoming one.”
The full updated Plimsoll analysis allows you to see how the UK’s top 1,200 fresh produce companies will cope with this unkind market.
This special edition of the Plimsoll Analysis - Fresh Produce exposes all the names, details and financial performances of the UK’s leading fresh produce firms. It also includes a future snapshot on each company, demonstrating how each might survive this period of consolidation. It names those companies that are placed to gain the most and those that need to retreat or sell up.
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