Member Article

Yorkshire companies’  war chests amass over £10.6 billion

Yorkshire’s largest 150 companies have amassed more than £10.4 billion cash in the bank, according to the BDO Yorkshire Report 2014.

Companies’ war chests have increased sharply by 22% on last year’s figures, with cash reserves now at their highest level since records began in 2007, providing a sure fire signal that M&A activity could flourish over the next few years.

The analysis comes from the BDO Yorkshire Report 2014, now in its eighth year, which compiles the latest published accounts from Yorkshire’s largest 150 businesses based on revenue, analysing trends and acting as a barometer of health for the region.

The report found that the top 150 saw revenues increase to £90.7 billion, from £88.7 billion last year and £83.8 billion the year previous.

Operating profits increased by 5% to £4.56 billion and a more focused effort on overseas markets saw international sales grow by £1.7 billion, up 7.7% to more than £12bn.

Terry Jones, partner and head of BDO LLP in Yorkshire, says: “There is an overwhelming feeling of confidence across the region and the figures in this year’s report confirm that growth is firmly back on the agenda.

“Having built up cash reserves during the last few years, the challenge now is for management teams – many of which may not have the experience in dealing with a ‘positive’ cash crisis – to have the confidence and expertise to choose where to invest.

“It’s a challenging prospect having spent the last four to five year’s heads down firefighting, but businesses must look forward and seize the opportunities a recovering market presents. This year’s success stories will come from those brave enough to invest three-fold; in talent, technology and international markets.”

Yorkshire’s heartland in manufacturing is proving particularly resilient and increasingly important to the region. The number of manufacturers in the top 150 rose to 34 (from 31 last year), generating more than £10bn in revenue (£1bn more than last year).

The retail sector was the largest contributor to both revenues and profits, due to food retailers Asda/Walmart and Morrisons continuing to dominate and accounting for 45% of the £90.7bn turnover. However, other retailers had another difficult year with revenue falling by £1bn to £3.4bn to the economy.

But the retail sector has its winners too. This year children’s retailer Mamas & Papas has entered the top 150 for the first time with turnover hitting almost £150m according to the most recent filed accounts.

Other newcomers to the list include bus operator First West Yorkshire, clothing manufacturer John Cotton Group, Bradford-based AIT Travel and Weber-Stephen Products, the importer and wholesaler of barbecues.

The BDO report finds that West Yorkshire accounts for more than half of the 150 entries, followed by South Yorkshire (21%), East Yorkshire (14%) and North Yorkshire (13%). Leeds is the most represented city with 32 of the region’s biggest businesses headquartered there (up from 28 last year), following by Sheffield (19), Bradford (16) and Hull (13).

This was posted in Bdaily's Members' News section by Clare Burnett .