A recent report into the UK m&e contracting market rates 115 of the UK’s leading 1000 m&e contracting firms as being in financial danger

Amid calls for bail-outs, David Pattison, senior analyst at report collator Plimsoll, asked whether the industry should “just let them fail”.

Pattison said: “Recessions catch bad businesses out. Those companies that have entered this period ill-prepared have placed themselves at a distinct disadvantage. Many have grown used to running their businesses on high-risk business models, propped up largely on finance.”

Of the 115 firms rated as in ‘Danger’, the report says:

  • 56 increased their debts last year;
  • 78 saw profits fall last year and 68 are losing money. Their costs are clearly ahead of sales and they have failed to respond to changes in their business structure;
  • 56 managed to increase sales last year. It only proves, however, that, despite rising debts and mounting losses, they have been desperate to maintain sales at any cost.

The UK m&e contracting industry is not immune to the current economic crisis, claims the report. The sector has overcapacity, 30% of businesses suffered a fall in sales last year, with competitive pressure forcing many to see sales fall by 13%.

The Plimsoll analysis includes each of the industry’s largest 1000 companies. Copies are available at £350. Call Clair Sherwood on 01642 626400.

Source

Electrical and Mechanical Contractor