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Growth rate slows as Brexit uncertainty bites

Now in its fourth year, the Buckinghamshire Limited study conducted by financial and business advisers Grant Thornton analyses the performance of the 100 largest, privately owned companies in the county to provide a recognised barometer of the overall health of Buckinghamshire’s economy.

The 2017 report findings, unveiled to more than 100 local businesses at a breakfast event hosted by Grant Thornton at Stadium MK, revealed that combined turnover of the top 100 companies increased by a healthy 10.9% from £6.5 billion to £7.2 billion.

Profits, measured by EBITDA (earnings before interest, tax, depreciation and amortisation),  also grew by 8.5% from £631 million to £684 million. This growth was largely driven by the 33 of the 100 companies in the report with a turnover of over £50 million.

Employment levels for the 100 companies also increased by 5.3% to 40,726 and, more positively, average wages rose by 7.9% to £29,307.

Grant Thornton director Mike Hughes, who presented the findings, said: “The strength of the county’s economy continues to impress with businesses weathering continued uncertainty over our future relationship with the EU and the falling value of the pound.

“While Buckinghamshire has a number of economic centres, Milton Keynes, which this year celebrates its 50th birthday, continues to play a significant part in the growth of the county as a whole.

“But there is a note of caution as both turnover and profit growth are lower than the previous two years and growth has been patchy across the top 100 companies.

“However, the report shows that only five businesses were loss-making which, for the time being, suggests more of a slowdown in overall growth rather than a reversal of fortunes.”

The survey also showed that the county’s large businesses, with turnover of more than £50 million, achieved a significantly higher rate of turnover growth (13.5%) compared to SMEs (3.8%) which continues the trend seen in last year’s report.

However, while profit growth for large businesses amounted to 11.3%, for SMEs it fell for the first time by 1.6%. This suggests SMEs have had a more difficult year, possibly as a result of the falling value of the pound.

The Buckinghamshire Limited report also analyses the performance of the top 100 companies by sector.

All nine sectors grew turnover highlighting a strong performance across the board. The standout players were food, drink and leisure (32.8%), business support services (19.5%) and freight and logistics (19.3%).

A further seven sectors reported an increase in EBITDA. However, healthcare and education saw profits fall by 5.9% as businesses face challenges over recent legislative changes and growing pressures on cost.

Similarly, the technology sector saw EBITDA decrease by 3.1%.

Mr Hughes said: “It is positive to see a growth across the majority of sectors with several notable performances. However, the report findings show it is the larger firms who have delivered the bulk of this growth which is in stark contrast to recent years when SMEs have been the real drivers.

“This suggests our county’s smaller businesses have had a challenging year, possibly due to caution around Brexit, currency changes and the subsequent economic slowdown.

“To ensure Buckinghamshire businesses, and the county as a whole, continue to grow they need a good supply of quality talent. Therefore, particularly against a backdrop of full employment, we need to ensure that the county has the infrastructure, housing and culture in place to attract the very best to the region.

“To achieve this, over the coming months we will continue to speak with local organisations across all industries to help shape the Milton Keynes of the future.”

The Buckinghamshire Limited 2017 findings were presented during a breakfast briefing at the DoubleTree by Hilton with guest speaker Sir Peter Gregson, chief executive and vice-chancellor of Cranfield University and chair of the MK Futures 2050 commission.

For a full copy of the Buckinghamshire Limited report, email lucy.c.evans@uk.gt.com 

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