In an attempt to help owners and managers in the UK Leather Merchants & Wholesalers industry, a new study by industry analysts Plimsoll Publishing aims to help executives looking to buy or sell a company make the right choices when approaching target companies.
Why was this analysis commissioned?
A number of driving forces seem to be affecting the industry at the same time, forcing current owners to consider their future involvement in the market. Issues include,
* The age of the owners. A third of directors are now over 60 years old.
* The direction of the market. For 52% of companies, sales did not keep pace with inflation.
* The pressure on profitability as a result of rising costs. 89% of companies suffered a fall in profitability.
* Succession management – next generation involvement in the industry is an issue at the 45 companies incorporated before 1970.
Yet at the same time, some companies are new or are prospering. Identified in the analysis of the 150 UK companies, some clear examples could be found.
* 26% of directors are under 50 years old, evidence of the new blood that has entered.
* 7 companies have improved sales by 15% or better in the last 3 years.
* 34 companies have increased profitability in the last year.
* 32 companies are new to the industry, established in the last 10 years. 5 of these now have sales above £5 million.
David Pattison, senior analyst at Plimsoll believes that: ‘This effective two speed industry is forcing some to feel like the market is in decline and that selling up or merging is a great way to save the company. On the flip side, the other companies grabbing all the growth and profit see an acquisition as a great way to continue their march into the market’.
Identified were two classic types of player
As well as a full individual analysis of each of the UK’s Top 150 companies, two separate studies analyse two distinct types of company.
The 87 ‘buyer’ companies
These companies are the best to consider if you are looking to sell your company or merge. They all are showing great financial strength and could all afford to a buy a company or make an investment in another company.
The 41 ‘seller’ companies
These companies are the best to consider if you are looking for a company to buy. They are likely to be amenable to an approach as many are losing money. 6 are losing money for the 2nd year in row. Yet in the analysis, each of these companies is provided with a projection that sees them returning to profit inside 12 months. These projections prove that given the right investment and cost reductions, they could all be profitable businesses.
Where to obtain the analysis
Copies of the 312 paged publication, along with the additional buyers and sellers analysis, can be purchased by calling Plimsoll Publishing Ltd on 01642 626400, or by emailing m.aston@plimsoll.co.uk. Printed copies available for £350, PDF versions £400. Readers of this publication can claim a 5% discount.
