Grant Thornton’s latest Cambridgeshire Limited report reveals the county’s businesses are in a good position for potential challenges ahead
The Cambridgeshire Limited report – which is compiled by leading financial and business advisors, Grant Thornton in partnership with leading UK law firm Mills & Reeve – is an in-depth, annual health check of the Top 100 privately owned businesses in the county. The 2019 report revealed that whilst turnover and profitability have both increased, growth rates have slowed and balance sheets revealed a slight decrease in borrowing, an increase in retained cash and a double digit increase in shareholders’ funds.
Headline findings
This year’s findings have highlighted positive growth in both turnover and profitability, with 71% of companies in the index reporting turnover increases, and 90% being profitable. Total turnover in the county has been valued at £11.3bn (up 6% on 2018), while profits are sitting at £809m (up 10%).
It’s also good news for local workers as employment across the county is on the rise; 66% of the Top 100 have reported an increase in staff numbers and the overall number of employees has increased by 6.3%. Cyber defence company Darktrace Limited (33) has showcased the biggest increase, employing 65% more staff than last year. Average salaries have also increased by 4.5%, with the technology sector boasting the highest average pay in Cambridgeshire.
The report also revealed that while companies in Cambridgeshire are continuing to invest, it hasn’t been as widespread or bullish as in previous years. A reduction in borrowing contrasts to the 2018 report and increase in cash on the balance sheet versus 2018 is consistent with the trend over the last few years. Although these findings indicate a feeling of caution amongst many, it suggests businesses are well positioned for any further uncertainty in 2020.
Hazel Platt, head of tax for Grant Thornton’s Central region commented: “There is an underlying narrative of caution behind the Top 100 businesses’ performance – total borrowing is down 1% this year and cash has increased 5.7% to £915m. Profits are also being retained, which we can see through an increase in shareholder funds of 12% to £2.6bn. So there is no need for despondency because overall, Cambridgeshire Limited has a strengthening balance sheet. This shows businesses in the county are well positioned for any further uncertainty in 2020 and this is reflective of the positive conversations I am having with my clients across the county.
“It is encouraging to see that business leaders are planning for uncertain times and sustainable growth, whilst avoiding complacency.”
Location
Cambridge remains as the leading location in terms of total turnover, with five of the top ten Top 100 companies residing in the city. And whilst the city experienced limited turnover and employment growth, the businesses based there added 16% more EBITDA (earnings before interest, tax, depreciation and amortization) in the year.
In reflection of the recent investment in Peterborough, the city boasts the most companies from the Top 100 (26 in total); resulting in increased turnover, profit and people, which all experienced double-digit growth this year. The city also saw the highest number of new entrants into the Top 100, including EPD Insulation Group Ltd (65) and insurance company, Marmalade Limited (95).
With the upgraded A14 due for completion in 2020, it is expected that improved infrastructure will impact local businesses in Huntingdon and Fenland positively, with the towns already experiencing an increase in the number of companies locating to the areas compared to 2018.
Stephen Hamilton, a corporate partner at Mills & Reeve, commented: “We should not let comparisons to past levels of stellar success taint what is another set of hugely positive results. The report shows that the Cambridgeshire economy continues to grow and flourish, setting an example to the rest of the UK and being a magnet for international investment and interest. I am delighted to work in and support the region and I look forward to its continued success.”
Ones to watch
For the first time this year the Cambridgeshire Limited report features case studies from some of the region’s fastest growing ‘Ones to Watch’. Composite component manufacturer, TRB Lightweight Structures Limited; fruit wholesaler, Fruit Growers Alianza; transport specialists, Manchetts Holdings Limited; and housebuilder David Smith St Ives Limited are four of the companies that look likely to feature in the Top 100 in future years, with all citing a focus on service quality and investment in people as the main drivers in their growth. The final company featured as ‘One to Watch’, IT provider, EACS Limited actually made it into the Top 100 at 98 having demonstrated growth which they attribute in part to their great people and culture.
The results of this year’s Cambridgeshire Limited report were presented by Grant Thornton at a networking event at Mills & Reeve’s Botanic House office in Cambridge. Now in its eighth year, Cambridgeshire 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.
Download a copy of the report here>>>