Essex is proving to be a county confident in its entrepreneurial roots despite ongoing Brexit uncertainty, a new report has revealed today.
The Essex Limited report – which is compiled by leading financial and business advisors, Grant Thornton in partnership with Birketts LLP – is an in-depth, annual health check of the Top 100 privately owned businesses in the county. The 2019 report revealed that local businesses have delivered robust overall performance, showing growth in all seven industry sectors included in the report and increases in both turnover and profit.
This year’s results have highlighted that Essex is continuing to respond strongly to challenges surrounding Brexit, resulting in turnover and profit growth of 15% (to £10.5bn) and 11.8% respectively.
It’s also good news for local workers – in a bid to prepare for the possible exit from the EU, businesses have invested in their workforce with employment figures increasing by more than 10%. Meanwhile, an increase in the average wage to £30,036 (11.1% growth) indicates a desire to attract new talent and retain a skilled workforce.
Turnover among the Top 100 has seen positive growth once again this year, exceeding last year’s growth of 10%. Even more impressive is that the majority of growth is organic, which has been achieved by improving internal processes, reinvesting in staff and skills and focusing on refining the products and services they provide.
Top 100 big movers
In this year’s report construction company Hill Holdings Limited, based in Waltham Abbey, has taken the accolade as Essex’s top performing company for the first time having seen turnover increase by 20.7%. They are followed by Glyn Hopkin Holdings Limited in Romford, Walstead Holdings Limited in Colchester and Shawbrook Group PLC in Brentwood.
Elsewhere, the biggest mover in the Top 100 is construction specialists, Readie Management in Romford, moving two positions to 10th place after experiencing significant organic growth of 38%.
Trevor Ling, Tax Director at Grant Thornton’s Essex office in Chelmsford, presented the findings during a networking event at the firm’s base on New London Road. Commenting on the results, he said: “The Top 100 continues to be dispersed across both the county and a range of industries – from manufacturing and construction to retail and transport, which provides evidence of the many opportunities that are available in the Essex market. The diverse composition, and the ‘halo-effect’ from London, means Essex is slightly more protected than some areas when it comes to surviving Brexit.
“Against a challenging backdrop, Essex Limited has delivered a strong overall performance including increases in turnover, profit, average wage figures and number of employees – clearly Essex Limited has both focussed on retaining their existing talent as well as growth through careful recruitment.”
In total there have been 10 new entrants to the Top 100 this year. The 10 new entrants contributed 11.4% to the aggregate turnover in the current year which replaced only 6.1% of total turnover in the preceding year.
Similarly to 2018, property and construction remains as the top sector in the county by both aggregate turnover and operating profit. However, the sector has had a more challenging year with six companies having exited the Top 100, which has resulted in a decrease in profit, and turnover remaining static compared to 2018. The service sector has been highlighted as the standout sector in 2019, achieving the largest growth in turnover and operating profit of 43.4% and 418.5% respectively. This was driven by the sector’s highest new entrant in the year, Shawbrook Group Plc, who de-listed from the stock exchange. However, even on a like-for-like basis, the sector showcased the largest growth with 12.5% and 18.6% in turnover and operating profit.
Another standout sector of this year’s Top 100 is the automotive industry. Contrary to popular belief that the sector is suffering due to economic uncertainty, the Essex automotive market saw 9.7% growth in turnover. Despite it being the only sector to see a reduction in return on capital in 2018, the industry saw returns stabilise to 8.7% this year.
Adam Jones, Partner in corporate law and finance at Birketts' Chelmsford office commented: “Results across the sectors have certainly varied in this year’s Essex Limited report. Property and construction, which was the star sector last year, has displayed a more volatile performance, with the decline in its overall turnover possibly being impacted by the overall uncertainty from the delayed Brexit and its effect on investment decisions and some supply chains.
“Six of the seven sectors have also shown increased gearing this year, with companies placing more reliance on external debt financing to assist in organic growth. That growth is to be celebrated, as it is a product of Essex businesses backing themselves and their employees, but possibly also shows an apprehension about making new external investment decisions whilst the final Brexit outcome is still outstanding.”
Now in its ninth year, Essex Limited is compiled using the most recent publicly available accounts (as at October 2019) and provides a yardstick against which the county can assess its economic performance. It also offers businesses the opportunity to benchmark themselves against their peers.