By The Sunday Times BDO Profit Track 100 on 10/04/2016
Research into private companies with the fastest-growing profits finds the building sector underpinning growth. Rhys Owen reports for The Sunday Times BDO Profit Track 100.
Britain, the chancellor will be pleased to hear, is building again. More than a quarter of the companies on the 17th annual Sunday Times BDO Profit Track 100 league table operate in building related companies, up from 15 companies last year.
They range from housebuilder Thomas Homes (No 47) to architect Wilkinson Eyre (No 43) and software firm Excitech (No 39), which provides CAD design services to architects and engineers.
All have achieved extraordinary profit growth. The league table ranks the 100 private UK companies with the fastest growing profits over a three-year period. The year’s cohort have, on average, achieved an annual profit growth of 82% over that time, compared to an annual average of 68% last year, and a mere 55% back in 2000.
Look beyond buildings and the league table captures the diverse nature of Britain's economy, from commercialising the latest green technology (No 1 company Anesco and Solarcentury, No 5), to serving up fresh sushi for hungry office workers in London (Wasabi, No 80). There are 41 companies providing services, ranging from outside broadcasting to office design, 23 retailers and 24 manufacturers, including GCH Capital (No 69) which makes a range of products from wooden vegetable boxes to steel for shipbuilding. It is run by Cassie Hutchings, 32, with backing from her father Greg, 69, former head of listing conglomerate Tomkins. She is one of six woman running a company in the league table.
There is also some diversity in terms of where the Profit Track 100 companies are based, as Stuart Lisle of BDO notes below. Just over half are located outside southeast England and 8 of the top 10 are headquartered away from the capital – such as polymer engineer Balmoral Group (No 7) in Aberdeen, and Gloucestershire based price comparison site Money.co.uk (No 8). However, London and southeast England remain the dominant region for HQs, followed by northwest England, with 13 companies, including online retailer the Hut Group (No 6), based in Northwich in Cheshire.
Entrepreneurs are the driving force behind most of the companies, with 64 majority owned by their leaders, a significant increase on last year, when entrepreneurs were the majority owners of only 44 companies. Examples this year include Nitin Passi, founder and chief executive of Manchester based online fashion retailer Missguided (No 32). The challenges of ownership are explored further by Phillip Wood of UBS in page 2 of the supplement.
Thirteen companies have partly fuelled growth by selling a majority stake to private equity firms. They include doughnut maker Krispy Kreme (No 55), owned by Alcuin Capital and indigo Capital, and Oasis Dental Care (No 18), owned by Bridgepoint. A total of 20 companies have external capital, including Lancashire’s Cormar Carpets (No 99), owned by the Cormack family. The remaining 11 companies are owned by management and staff.
They all make a significant contribution to the economy, taking total profits from £300m to £1.5bn over three years, and adding 25,000 jobs to support the direct employment of more than 65,000 people. They are also highly productive, with average profits per employee hitting £23,543 this year, up from £14,843 achieved by the class of 2011 – a rise of 59% and an encouraging trend amid concern over Britain's "productivity puzzle".
The Sunday Times BDO Profit Track 100 supplement can be downloaded on the following link.