Member Article

Survey reveals renewed hunger for expansion

More than half of North East companies are looking to take advantage of opportunities created by the economic downturn by making an acquisition or establishing a joint venture with former competitors.

According to the latest survey into the owner-managed business (OMB) sector by national accountancy firm, Baker Tilly, 15% of local firms claim to be planning to expand overseas within the next three years, while 23% say they expect to increase their level of debt.

According to the research, 53% of North East companies are predicting further redundancies while 45% say they expect a further drop in sales in the coming year. Only 18% anticipate an increase in operating profits.

Angela Toner, corporate finance partner at Baker Tilly in Newcastle, said: “Large firms are often better capitalised and in a stronger position to cope with a slow down. However, on the flipside, smaller firms can be more nimble and quicker at adapting to changing economic conditions. It is those in the middle that need to consider where they can tighten up and improve efficiency for their ongoing success.

“Funding flexibility in these situations is important. While obtaining finance is clearly difficult there is funding available provided you understand where to look. Between the various government initiatives, the slowly healing banks, and the mountain of Private Equity funding sitting on the sidelines, money can be found.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .