Plimsoll Portfolio Analysis - Estate Agents, 2nd edition, 1998
Plimsoll Portfolio Analysis Estate Agents, 2nd edition, 1998
Results from the latest estate agents industry analysis from Plimsoll Publishing, show an improvement in the proportion of financially strong companies in the industry (Figures 1-4 and Tables I-VII). Of companies, 30 per cent were defined as being financially strong while 60 per cent were classified as suffering from some form of financial difficulties. This compares to figures of 27.1 per cent of companies classified as financially strong and 62.6 per cent as financially weak 12 months ago.
Figure 1 Plimsoll financial rating of 202 companies in main report (where data are available)
Companies classified as being financially weak are not necessarily in imminent danger of going out of business but it does signal a need for change, a financial restructuring or repositioning of the company in the market-place for instance. Some companies may, as a result of expansion or restructuring, go through a period of financial instability until the benefits of the change filter through to the profit and loss account, success or failure are not generally overnight occurrences. However, if the company in question does not take steps to rectify the position it could certainly lead to its demise; a company in a financially weak position has to either improve or face liquidation.
Sales growth figures for the industry also improved during the last year. The current industry average for sales growth is 17.3 per cent compared to 2.3 per cent 12 months ago. Pretax profit margins have increased to 5.9 per cent as a proportion of sales from 0.5 per cent a year ago.
Figure 2 Distribution of annual sales growth for companies with a financial year end between 1 July 1996 and 30 June 1997
Figure 3 Distribution of pretax profit margins for companies with a financial year end between 1 July 1996 and 30 June 1997
Figure 4 Distribution of average remuneration per employee (£000) for companies with a financial year end between 1 July 1996 and 30 June 1997</I
Table I Plimsoll financial rating by turnover category
Rating
Table II Sales growth for companies with a financial year end between 1 July 1996 and 30 June 1997
Table III Turnover quartiles for companies with a financial year end between 1 July 1996 and 30 June 1997
Cheering news, however,for the industry's employees: as average salaries increased over the same period, the average employee now earns £15,100, up from £13,700. Directors allowed themselves a bonus; the average payout to a member of the board rose from £18,300 to £20,300 over this period.
Table IV Pretax profit margins for companies with a financial year end between 1 July 1996 and 30 June 1997
Table V Turnover quartiles for companies with a financial year end between 1 July 1996 and 30 June 1997
Table VI Table of average remuneration per employee (£000) for companies with a financial year end between 1 July 1996 and 30 June 1997
Table VII Turnover quartiles for companies with a financial year end between 1 July 1996 and 30 June 1997
The report, the Plimsoll Portfolio Analysis Estate Agents, second edition, 1998, analyses 1,658 companies involved in the industry. To assess the financial strength of these companies the Plimsoll Model (Table I and Figure 1) examines the companies last four years of audited accounts and uses key financial indicators. These are weighted and combined to form the Plimsoll Chart, the ultimate indicator of a company's financial position. As the model is standard for every company it is easy to distinguish the strong from the weak and make rapid intercompany comparisons.
For a copy of the report or more information, contact Mark Haynes at Plimsoll Publishing. Tel: 01642 257800; Fax: 01642 257806; E-mail: mark_plimsol@dial.pipex.com
