Key study shows that Suffolk’s leading companies are ‘battening down the hatches in preparation for Brexit’
PUBLISHED: 00:00 28 November 2018
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A new study revealing the true state of Suffolk’s leading businesses since the Brexit referendum shows that although turnover of the top 100 companies has increased, profit before tax remains flat.
Suffolk Limited’s top 100, which is now in its 17th year, saw a new chart-topper for the first time since 2013, as Turners (Soham) Holdings, a freight transport company based in Newmarket, bumped East of England Co-operative Society off the number one spot.
Turners has increased its turnover from £322m to £396m, driven by an increase in its container division and investment in further acquisitions.
The study was undertaken by Birketts and Grant Thorntons, whose director of corporate tax, compliance and advisory, Rob Thomson, explained that the task of analysing this year’s figures was “slightly trickier” because they decided to pull out last year’s top three company Servest, after it was acquired by Atalian.
“Suffolk Limited is an analysis of companies that are owned and managed within the county, and Servest is now a subsidiary of an overseas power,” he said. “We also pull out Greene King because it’s just so large that it would skew the figures.”
The figures are more encouraging when compared to the top 100 comparatives from last year, revealing that turnover increased to 10.8% and operating profit by 8.1% respectively, and employee numbers have grown by 4.5%.
People might assume that agriculture is big business in Suffolk, but in fact it makes up one of the smallest sectors, while property and constructions continue to be the largest growing sector with growth of 16.1%,
In fact, the chart shows how Suffolk’s companies are spread across a broad range of sectors.
“We are a really diverse economy, we’re fit for all seasons and although we don’t outperform our neighbouring counties, in times of economic decline, we don’t match the rate of downfall,” explained Birketts’ chief executive Jonathan Agar.
He believes this steady resilience makes Suffolk less vulnerable than its neighbours to Brexit headwinds.
“Brexit will place huge demand on transport and logistics, because you’ll have to have a much more logistical supply chain – more sophisticated, and equally more profitable,” he said. “A lot of European operators are going to have distribution centres just this side of the coast because they’re anticipating Brexit requiring near shore or onshore unpacking and redistribution centres near Felixstowe.
“Between Bury St Edmunds and Felixstowe, there are six million square feet of new distribution centres either in construction or in the pipeline to be constructed, which is a reflection of having to have distribution centres near to ports and markets.
“Transport links are improving and in due course, we will have a much improved North Cambridge bypass. All that is going to help the Felxstowe distribution.”
Mr Thomson believes that the overall picture reflected in the top 100 figures is that Suffolk is now “returning to its more cautious approach that it had in previous years, in terms of making sure it’s stable, robust and fit for purpose for when the Brexit comes in.” “They’re paying down some debt - gearing has gone down - and they’re not invested as heavily in fixed assets and infrastructure as they had been previously,” he explained. “Companies are battening down the hatches, so they’re robust and ready for Brexit.”
Mr Agar believes that while some Suffolk company chief executives will be “absolutely fixed on what’s happening with Brexit, watching it on TV like it’s a soap opera,” others are “so bored with it.” “Some see Brexit for what it is which is a process. There will be big bumps on the road along the way which might topple governments, but they realize that we will get through it one way or another. They will be looking with a greater degree of concern at UK political change, and what that will mean for them.”