The Essex Limited study, conducted annually by business and financial advisers Grant Thornton and for the first time this year, in partnership with regional law firm Birketts, provides an in-depth financial analysis of the 100 largest companies which are both owned and managed within Essex to give a recognised barometer of the local economy. The report also includes a ‘Growth 50’ index, looking at the 50 highest growth companies outside the top 100 list by turnover.
The report findings, unveiled today to Essex business leaders at a breakfast event hosted by Grant Thornton and Birketts, showed that combined operating profit for the top 100 companies rose an impressive 14.3% to £524m, highlighting improved efficiency and cost control. Total turnover for Essex Limited’s constituent members also rose by 10% to £9.1bn, evidencing positive growth across the county.
Employment levels for the 100 companies increased by 1.4% (670 jobs) to 49,573 people. The Healthcare sector remained the largest employer at 15,999 people, up 1.0%, with at least 5,000 more employees than any other sector. Job increases were seen across four of the seven sectors, with the highest rise delivered by Retail and Wholesale, up 12.3% to 7,184 people.
The average salary of those employed by the top 100 companies increased by 5.3% to £28,189. This exceeds the national rate of inflation, indicating real wage rises and suggests an investment in a skilled and qualified workforce, allied to increases in the Living Wage and National Minimum Wage. Property and Construction was the highest paid sector with an average annual wage of £44,440 (up 3.4%), with Healthcare the lowest at £15,501 per annum. This is 45.2% lower than the average wage across the top 100.
Property and Construction continued to dominate the market share of turnover (31.8% at £2.9m), followed by Retail and Wholesale (23.3% at £2.1m) and Services (15.3% at £1.4m). Six sectors reported turnover increases, led once again by Property and Construction which delivered a 24.1% rise. The only sector to see turnover fall was Automotive, down 8.9% to £1.2m. This reverses last year’s position when Automotive saw the biggest turnover increase of 14.6%.
Property and Construction also remained the most profitable sector (£316m and 60.2% share), up 36.9%, followed by Retail and Wholesale (£65m and 12.3% share) which also saw the largest rise in operating profit of 47.4%. Automotive, Services and Manufacturing all reported a fall in operating profit of 53.1%, 40.2% and 7.6% respectively.
The 2018 Essex Limited study was based on the latest company accounts available and so offers an insight into how Essex has performed during the post Brexit vote period as local businesses respond and prepare for the challenges that lie ahead.
Commenting on the results, Trevor Ling who leads Grant Thornton’s Chelmsford office, said: “The 2017 Essex Limited report reflected on the uncertainty surrounding Brexit and while this appears to be impacting on the UK as it lags behind its key international competitors in terms of both growth and productivity, in 2018, Essex Limited has shrugged this off to deliver an impressive overall performance, including significant growth in the average wage.
“The results represent a resilient and growing county confident in its entrepreneurial roots, with much of this growth delivered through increased investment. Results across the sectors continue to vary but Property and Construction and Retail and Wholesale remain the standard bearers for the county.”
For the fourth year running, the report also included a ‘Growth 50’ index which showed the 50 highest growth companies in terms of turnover are also performing strongly. These businesses achieved an average turnover rise of 34.9% and contributed a total turnover of £1.38bn to the Essex economy. The Growth 50 delivered an even more impressive average profit growth of 73.4%, reporting a combined operating profit of £137m.
The 2018 analysis also looked at the geographical spread of the top 100 companies. These are widely dispersed across the county with Basildon the highest number of companies (11), closely followed by Chelmsford (10) and Colchester (9), accentuating the diversity and opportunity across the county.
Adam Jones, partner at Birketts continued: “The strong performance delivered by both the top 100 and Growth 50 companies which are well spread across the county and operate in a variety of sectors, further goes to underline the strength and depth of the Essex economy. With 14 new entrants into the top 100 and 41 into the Growth 50 this year, it’s also reassuring to see a robust pipeline of new, dynamic businesses coming through.”
During the 2018 Essex Limited briefing event held at Stock Brook Country Club in Stock, local business leaders and guest panellists Dino Forte, founder and CEO, Ventrica; James Lipscombe, owner and Managing Director, The Chesterford Group; Andrew Howie, co-founder, Shaken Udder Ltd and Kim Morrish, Director, Ground Control, all shared valuable insights and took questions from delegates.
For a full copy of the Essex Limited 2018 report, please contact Grant Thornton at [email protected]