Zero growth for 43 percent of UK designers

Zero growth for 43 percent of UK designers

Keywords Electronics industry, Markets,United Kingdom

Despite a sales growth industry average of 3.2 percent, some 123 companies reached over 20 percent sales growth last year. Five companies who have improved their relative standing in electronics designers industry in sales over the last four years are:

• 1.

  Deltron Electronics plc

• 2.

  ET Electrotech Research Ltd

• 3.

  Basys Technology Ltd

• 4.

  Q-Arc Ltd

• 5.

  Channel Holdings plc

The above mentioned five companies have combined sales of £131 million. However, one company making a significant improvement in sales growth last year was Betacom Products Ltd. This company managed a 45.3 percent growth in sales for their latest financial year compared to the industry average of 3.2 percent and now has sales of over£30.7 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 to 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 terrific 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 110 companies improved their relative standing in sales growth. However, this was 47 companies less than in 1996. More troubling is that in 1997, 43 percent of the 972 companies in the industry did not manage to grow at all! This is way above the UK industry average of 37 percent, highlighting the competitive pressure prevalent in the Electronics Designers industry.

What is most striking, are the companies that manage a higher than the average pre-tax profit margin of 6.1 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.

  Gard Data Ltd

• 2.

  R F Solutions Ltd

• 3.

  Digilog Services Ltd

• 4.

  A C Magnum Ltd

• 5.

  Systembase 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 38 percent of the Electronics Designers 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 are making a loss. This compares to companies in the whole of the UK.

All of the above companies have been identified from the Plimsoll Portfolio Analysis Electronics Designers, First Edition 1999. This report individually analyses some 972 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 on the financial viability of customers and suppliers, to assess the risk from the competition and to identify suitable acquisition prospects.

Readers of SSMT can receive a 5 percent discount if they mention SSMT upon ordering. For further information, please contact Jennifer Ovington on +44 (0) 1642 257800;E-mail address: jennifer_plimsoll@dial.pipex.com