Are you sitting comfortably?

Are you sitting comfortably?

Keywords: Metal treatments, Sales

Averages are as comfortable as a good office chair. Perhaps you have decided that 1999 is just going to be a bad year in sales. Beware! Despite a sales growth industry average of 3 percent, some 80 companies reached over 20 percent sales growth last year. Five companies which have improved their relative standing in Metal Treatments industry in sales over the last four years are:

• 1.

  Abbot Group plc;

• 2.

  Envopak Group Ltd;

• 3.

  Inflite Engineering Services Ltd;

• 4.

  Colebrand Ltd;

• 5.

  Pyeroy Ltd.

The above mentioned five companies have combined sales of »261 million. However, one company making a significant improvement in sales growth last year was Wallcote Group plc. This company managed a 32.5 percent growth in sales for their latest financial year compared to the industry average of 3 percent and now has sales of over »10.6 million.

These companies are moving up the industry rankings, gaining pace on the rest. Having these exceptional companies as customers could prove very rewarding. So, what are these terrific companies doing that is different from the rest of the industry? The latest Plimsoll Portfolio Analysis unfortunately cannot tell you this, but it can reveal their true victims, the rest of the industry. These formidable companies are putting a squeeze on the average companies in the industry and endangering their future competitiveness.

Even in previous years gaining those sales and profits has been difficult for the majority. For example, in 1997, over 136 companies improved their relative standing in sales growth. However, this was 56 companies fewer than in 1996. More worrying is that in 1997, 39 percent of the 1,302 companies in the industry did not manage to grow at all! This is in line with the UK industry average of 37 percent, highlighting the competitive pressure prevalent in the Metal Treatments industry.

What is most striking, in my view, is the companies that manage a higher than the average pre-tax profit margin of 5.6 percent. These companies are getting the money in, and most importantly, keeping it and bringing it to the bottom line. Five improvers in terms of pre-tax profit were found to be:

• 1.

  PDS (Gold Plating) Co. Ltd;

• 2.

  Colebrand Ltd;

• 3.

  Chemetall Ltd;

• 4.

  Southern Coatings & Services Ltd;

• 5.

  Inflite Engineering Services Ltd.

All of these companies have consistently improved profits over the last four years. These companies are perhaps even more powerful in terms of affecting the future competitiveness of the average companies in the industry because they have the funds for expansion and technology.

Perhaps the most encouraging news is that 26 percent of the Metal Treatments industry achieved a pre-tax profit margin above 10 percent last year. This is above the UK industry average of 19 percent. This is evidence of high profitability in the industry. Further evidence demonstrating this fact is in the proportion of companies reporting a pre-tax loss. One out of five companies in the industry is making a loss. This compares to companies in the whole of the UK.

So how does a busy manager find out about the movers in their industry? All of the above companies have been identified from the Plimsoll Portfolio Analysis - Metal Treatments, 1st edition 1999. This report individually analyses some 1,302 companies involved in the industry. Using the last four years of audited accounts, Plimsoll's unique method of analysis allows the user,principally the busy manager, to identify immediately where the strengths or weaknesses of a company lie.

The analysis is used typically to check the financial viability of customers and suppliers, to assess the risk from the competition and to identify suitable acquisition prospects. It is also possible to identify financially strong and growing companies to approach for new business; trading with companies such as this is one way in which a company can improve its own prospects.

To request a free individual company entry or to order a copy of the complete analysis of the 1,302 companies for »510 including next day delivery contact:Jennifer Ovington. Tel: +44 (0) 1642 257800; Fax: +44 (0) 1642 257806; E-mail: jennifer_plimsoll@dial.pipex.com

Note: readers of Anti-Corrosion Methods and Materials can receive a 5 percent discount if they mention the publication upon ordering.