Member Article

BDO urges businesses to ?mind the gap?

Businesses have been warned to “mind the gap” that is developing between those that can access growth, and those that are left behind. The Central South Report 2012 said there is a growing stumbling block between companies who are able to obtain private investments, mergers and acquisitions, and those who cannot compete. Firms are finding they must also fight to keep up with environmental developments to compete with other companies, as sustainability has become increasingly important within the business community.

Revenues increased by £10bn across the top 150 companies in the Southern region to £75bn, while profits dropped £0.3bn to £3.8bn. The report from accounts and business advisors BDO LLP said that “margins are still being squeezed across the board”, while a skills shortage is still an issue among the region’s 295,000 employees, with particular demand in the I.T and engineering sectors.

The South has been particularly focussed on growth overseas and investment in the last year, as turnover in foreign countries increased by nearly 5% to £34.7bn, and investments rose to £3.5bn. Although these figures are encouraging, BDO warned that the outlook was uncertain. Malcolm Thixton, partner and head of BDO Southampton, said: “It is important for Central South businesses to focus less on ‘getting back to normal’ and more on investing appropriately for this market. It is possible to generate good returns for those prepared to move beyond their comfort zone to pursue new markets and with the confidence to invest.”

He concluded: “Central South companies have demonstrated great resolve in the last year and there is every reason to believe they will do so in the future. For those who ‘mind the gap’, growth may still be firmly on the agenda.” BDO said uncertainty in the Eurozone weighed heavily on the outlook for coming months, and banks could not be relied on to support business growth while they rebuild their balance sheets.

BDO advised that for companies to negotiate the turbulent economic times ahead, they must be willing to explore new markets, and accept that difficulties will not be resolved in the short term. A focus on consumer value, client service, innovation and pragmatism would generate success, according to the advisors, and growth is still a possibility in tough times.

This was posted in Bdaily's Members' News section by Miranda Dobson .