The fresh produce industry could soon see a raft of takeovers as 272 of its companies are told they must change or face failure. Plimsoll Publishing has warned in its latest report that of the top 1,500 fresh produce companies, 18 per cent have been given a danger rating meaning that they are at a high risk of financial collapse.
Plimsoll researched the financial performance of each company and the full study includes an individual analysis and overall financial score for all 1,500 entries. The 272 firms in danger are suffering from low and declining margins and uncontrolled, rising debts.
Their position is now so serious that even normal business decisions are becoming constrained. David Pattison, senior analyst on the project said:“The simple message is change or risk failure. At these high risk companies, the managers need to act quickly to get their firms back on a decent financial footing. It seems inevitable that we will see a period of consolidation. Job losses and certainly cost cutting are essential if these companies are to survive. Personally, I would not rule out a series of takeovers. Most of these companies are blissfully unaware of how exposed to acquisition they are.”
The analysis is aimed at the non-financial manager who needs to be alerted to changes in the financial performance of fresh produce companies, whether they are customers, competitors or suppliers, said Pattison.
