Encouraged by low interest rates and the need to gain a competitive edge, 40 per cent of the top 1,000 UK fresh produce companies have spent the last three years gradually increasing their levels of debt. They are now faced with severe commercial disadvantage: debt threatens their survival in the industry and exposes them to competitors as potential acquisition opportunities.
A company's financial health can appear misleadingly favourable on the surface. The latest Plimsoll Portfolio Analysis - Fresh Produce goes beneath the tip of the iceberg, revealing the facts that many of the top 1,000 in the industry would rather we did not know.
Some 400 of the top 1,000 have seen their total debt position increase by almost 79%. Debt now accounts for almost 7% of total sales, severely compromising profitability. Even with low interest rates, interest payments are consuming nearly all the profits and forcing 64 of these companies into loss. If interest rates rise, this weight of debt will become an increasing burden.
David Pattison, senior analyst at Plimsoll Publishing Ltd, says: "Keeping up with the news on a company, its shareholders, suppliers and competitors, does not always give an indication of its true financial health. Our analysis exposes company myths where they exist in the UK fresh produce industry. I think people will be both surprised and alarmed by what is revealed."
Plimsoll Portfolio Analysis - Fresh Produce Industry
This new report is the essential companion for the entrepreneur with an eye for an acquisition. Any one of these debt laden companies could have a fantastic future under new management. By removing their interest payments, profitability would increase to 9%, well above the industry average margin of 1.7%.
• Comprehensive and accurate industry analysis at your fingertips for only a few pence per company
• Ideal for acquisition prospecting, benchmarking, competitor analysis, financial and strategic planning
• Unique, proven and well researched model based on 18 years’ continuous development
• Reports produced to order containing the most recently available data
• Full coverage guarantee - find any missing companies and we will send you a free redraft of the analysis
• Free 48-hour couriered delivery
Readers of Fresh Produce Journal will receive a 5% discount on both Plimsoll report formats (normal price £305 - paper version, £499 - electronic version). Please mention you are a Journal reader when ordering.
The Plimsoll Portfolio Analysis - Fresh Produce is available by calling 01642 626400 or by visiting www.plimsoll.co.uk
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