367 of the top 800 agricultural machinery companies in the UK market are growing at more than 10% per annum and making healthy profits, according to industry analysts Plimsoll Publishing. However there are 66 other companies, says Plimsoll, whose headline-grabbing sales growth masks something much more sinister.
David Pattison, senior analyst explains, “Firstly, it makes a nice change to have some positive news to report. 367 growing, increasingly profitable companies have either tapped into a new, fast growing revenue streams or are just the best performers in the old ones.”
However, he warns that there are 66 companies achieving eye-catching sales growth but their profitability tells a very different story, “Essentially there are two types of growth in the market – good versus bad. 66 companies have achieved over the 10% sales growth but in doing so have seen their profit margin collapse. They are simply overtrading.”
“More worrying, three of these companies have been loss making for two years – even with double-digit sales growth I doubt they will make it to a third”.
“While the market continues to recover and the 367 top performers show the way, there are 79 companies facing a very bleak future indeed. Losing sales, profits and probably most of their remaining options, these companies have been rated as danger in our report. Time is running out and only a takeover or a rapid turnaround is likely to redeem their situation”.
The full report of the Plimsoll Industry Analysis – Agri-Machinery is available from the company. It can be contacted on 01642 626400 or www.plimsoll.co./uk