‘Unease and economic challenges seem to have finally taken their toll’Oct 10, 2019
Pictured: Mike Hughes (left) of Grant Thornton and Adrian Pryce, of the University of Northampton.
BUSINESSES in Northamptonshire are beginning to succumb to the pressures of both economic and Brexit uncertainties, according to a new report published today (Thursday).
The Northamptonshire Limited report, compiled by financial and business advisers Grant Thornton, delivers an in-depth annual health check of the top 100 privately owned businesses in the county. Fortunes for local businesses have been mixed over the past 12 months, says this year’s report – while some companies have performed strongly, others are facing challenging times.
For the first time, this year’s report has focused on sustainability and Grant Thornton has partnered with the University of Northampton to investigate how businesses in Northamptonshire are reporting on their Corporate Social Responsibility activities.
The headline findings show that profits have decreased by 7%, from £344 million to £311 million, the first time in seven years Northamptonshire Limited has shown a fall in this area.
However, there are promising signs. Turnover increased by 6% from £5.34 billion to £5.65 billion and the appetite for future growth is intensifying, with a net increase in fixed assets of 6.2% to £1.4 billion.
The total number of employees has risen by 2.5% and average salaries have grown by 4.5% to £35,190.
Mike Hughes, who leads the advisory team at Grant Thornton’s Northampton office and presented the findings this morning at a breakfast event at Northampton Saints Rugby Club, said: “Businesses in the county are known for their strength and resilience but the lingering uncertainties over Brexit and current economic challenges seem to have finally taken their toll.”
Of the 100 firms analysed in the report, 51 saw an increase in profits compared to 61 last year and a peak of 73 a couple of years ago. Mr Hughes said the figures reflect what similar Limited reports have found in other areas.
“That said, it is not all bad news,” he added. “ There are businesses which have performed incredibly well – 13 of the top 100 saw profit increases of more than 50% and have clearly been able to benefit from the new market conditions. Meanwhile an increase in the number of employees and a 4.5% average salary increase will help the local economy.
“Ongoing investment in assets such as plant, equipment and vehicles is also evidence that businesses have confidence in future growth.”
This year’s report, compiled with the University of Northampton, also assessed how many businesses within the top 100 are undertaking CSR activities and where this effort is focused. Only 50% reported their CSR activities, which is potentially a missed opportunity for businesses to demonstrate their broader contribution to society.
“Customers, employees and stakeholders are demanding strong credentials in this area,” said Mr Hughes. “Businesses that demonstrate their commitment to progressing the environmental and social agenda will retain a competitive advantage, which is particularly important in the current challenging economic climate.”
The University of Northampton’s research also showed that of the 50% of businesses that are reporting CSR, only a quarter focus on local issues.
This could be another missed opportunity for businesses to connect with their local community and attract and retain employees, said Adrian Pryce, senior lecturer in strategy and international business, who carried out the investigation.
He added: “There appears to be an opportunity, as well as a growing need, for the county’s leading businesses to engage more with local issues and causes to ensure a healthy community in which to operate, recruit and sell.
“There are corporate as well community benefits from business taking a more strategic, focused and local approach to its CSR, the potential for which is not being fully captured.”
Now in its seventh year, Northamptonshire Limited is compiled by using the most recent publicly available accounts (as at September 2019). This year’s survey encompassed companies with revenues ranging from £13 million to more than £600 million.
Download a copy of the report at https://www.grantthornton.co.uk/office-locations/northampton/northamptonshire-limited/.