Accountancy Baker Tilly has just completed a survey of 300 directors of UK owner-managed businesses, and the majority don’t sound too optimistic about the coming year: 55% are expecting a drop in profits, while 51% are planning to make further redundancies. So all this ‘green shoots’ business has clearly been taken with a very big pinch of salt. On the other hand, 38% are expecting to make some kind of acquisition in the next three years – so they can’t be feeling that gloomy…
This survey only actually covers companies with a turnover of at least £5m, so they’ve already achieved a degree of scale – which you might think would make them among the more stable companies in UK plc. However, if they’ve got to this figure through rapid expansion, particularly if that was fuelled by debt, they could well be finding life even more difficult than their smaller brethren at the moment. And judging by the proportion expecting profits and/ or headcount to fall this year, there are clearly plenty of firms not seeing any light at the end of the tunnel yet.
On the plus side, it looks as though directors are getting less worried about financing – well over a third claim to be planning some kind of acquisition or joint venture in the next three years, so they clearly think that somebody’s going to fund it. ‘Between the various government initiatives, the slowly healing banks, and the mountain of private equity funding sitting on the sidelines, money can be found,’ insists Baker Tilly’s M&A chief Rob Donaldson.
What’s more, there’s also a suggestion that the various efficiency drives of the last year have made our companies a bit leaner and meaner. This ‘shift to thrift’ will leave firms better-placed to profit when the recovery does kick in, the accountancy suggests. The bigger companies in particular seem to be feeling a bit chirpier: 46% of those with turnover above £50m are expecting sales to increase this year, perhaps because weaker competitors are falling by the wayside.
So owner-managers are still taking the cautious approach – but they’re not planning to let this pesky recession curtail their ambitions entirely...
In today's bulletin:
Poor old Tesco makes do with 10% jump in sales
350,000 jobs to go in public sector recession?
Long wait for superfast internet
Beware the bargain-basement takeover
No sign of green shoots for owner-managers