Suffolk's Top 100 firms deliver turnover and profit growth despite Brexit uncertainty, reveals new report

28 November 2018

Suffolk businesses have continued their growth journey despite challenging times with another year of turnover and profit growth, albeit at a more modest rate than in previous years, says a new report published today.

The Suffolk Limited study, conducted annually by financial and business advisers Grant Thornton in partnership with regional law firm Birketts, provides an in-depth financial analysis of the county’s 100 largest companies which are both owned and managed within Suffolk. The report also includes a Growth Index, looking at the fastest growing companies in the top 100 and the next tier down.

The study findings, unveiled today to more than 120 Suffolk business leaders at a breakfast event hosted by Grant Thornton and Birketts, showed combined turnover for the 100 companies rose by 2.1% to £5.2bn. Total operating profit increased by a similar 2.2% to £279m, although profit before tax remained flat at £261m - the first time Suffolk Limited has not seen an increase here for a number of years.  

The 2018 results should however be viewed in the context that facilities management company Servest Limited (number three in 2017 with a turnover of £284m) has left the top 100 due to a recent acquisition. When comparing the current top 100 companies with these same companies’ performance in 2017, the figures are more encouraging with turnover up 10.8%, operating profit up 8.1% and profit before tax up 2.4%.

Similar to last year, the ten largest businesses by turnover contributed 40% or £2.1bn of Suffolk Limited’s total revenues and 39% of overall operating profit at £109m.

Employment levels for the top 100 companies fell by 38% (20,409 people) to 33,340 staff, again severely impacted by removing Servest Limited, historically one of the region’s largest employers.  As a result, the Transport and Motor Retail sector took over from Services to become the largest employer (8,997 people) with 27% of Suffolk Limited’s workforce. 

The average salary for Suffolk Limited increased by 4.4% to £24,989. This is above the national rate of inflation, signalling real wage growth and is particularly positive as it builds on last year’s marginal increase following several years of wage stagnation. 

The Suffolk Limited study was based on the latest company accounts available and so offers an interesting insight into how Suffolk has performed as a region during changing times, with continued uncertainty around Brexit.

Commenting on the results, Rob Thomson, director at Grant Thornton’s Ipswich office, said: “Plenty of change at the lower end of the Suffolk top 100, as well as the removal of a 2017 top three company, made the analysis of Suffolk Limited 2018’s performance slightly trickier this year. As a result, a comparison between the current top 100 and their comparative 2017 performance, as well as to Suffolk Limited 2017, was required to put things into context.

“The removal of Servest Limited’s significant turnover could have seen a reduction in Suffolk Limited 2018’s overall revenues. So, it is very pleasing to see that the rest of the top 100, including new entrants, have performed strongly to not only maintain a turnover in excess of £5bn, but to build on the previous year’s figure.

“With ongoing uncertainty around Brexit and its potential impact on the economy, Suffolk Limited has returned to a more cautious approach to business with a significant reduction in debt and gearing. However, when encountering challenging trading conditions, the Suffolk economy has a proven track record of resilience and we hope this will continue well into the future.”

The report also analysed a breakdown of the financial data by sector. Retail and Wholesale remained the largest sector by number of companies (24) while the second largest, Transport and Motor Retail (21 companies) delivered the largest turnover at £1,722m (32.9% of total turnover), up 11.5%. The highest turnover increase was reported by Property and Construction (13 companies), up 16.1% to £794m. All six sectors saw increases in turnover.

Property and Construction also reported the largest operating profit of £69m and the highest increase of 26.4%. Retail and Wholesale, Manufacturing, and Transport and Motor Retail all saw operating profit fall, down 5.4% to £45m, 3.2% to £24m and 0.2% to £62m respectively. 

The report’s Growth Index featured those companies in the top 100, and also the next 100 largest businesses, which achieved the fastest growth in turnover. Thirty-nine firms which made the Index showed growth of 20% or more in the last year, with 13 of these from the 100 to 200 tier (compared to 24 companies in 2017 and 8 from the 100 to 200 tier). Four companies showed growth of at least 100% and two of these were new entrants into Suffolk Limited. The 200 fastest growing companies were split across a range of sectors, with the strength of Services, Property and Construction, and Transport and Motor Retail seen in the top 100 continuing into the next tier.

Jonathan Agar, CEO of Birketts, added: “The 2018 Suffolk Limited results spell good news, especially the readiness to address staff investment and reward which, if sustained, should augur well for attracting and retaining the skilled resources needed to power the Suffolk economy forward. The performance of the 100 to 200 tier is also encouraging with twice as many businesses in this group growing in excess of 20% compared to their larger peers, suggesting a robust pipeline of new, dynamic businesses coming through.”

“The future is undoubtedly less certain than it has been for some time but I remain convinced that Suffolk’s brightest year’s lie ahead and the diversity of businesses throughout the county will flourish in all market conditions. Suffolk business is fit for the future.” 

The theme of this year’s Suffolk Limited event, held at Wherstead Park in Ipswich, was ‘culture’ and the importance of creating a positive environment where people – and therefore businesses – can flourish. Alongside the report results, delegates also heard from keynote speakers Robert Hughes, Managing Director, Hughes Electrical and Ashley Ward of Grant Thornton’s Growth Advisory team.  

For a full copy of the Suffolk Ltd 2018 report, please contact Grant Thornton at [email protected]

This article is from the winter 2019 issue of Inside Out, our newsletter for those with an interest in corporate and commercial services. To download the latest issue, please visit the newsletter section of our website.

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