Yorkshire businesses surpass £100bn milestone, according to BDO Yorkshire Report 2015

The top 250 businesses in Yorkshire are finally seeing positive results from their post-recession recovery, with revenues easily surpassing the £100bn mark and cash stockpiles increasing by 43.7%.

The driving force behind the region’s growth is from mid-market businesses, not large firms, according to the Yorkshire Report 2015, published today by accountancy and business advisory firm BDO LLP.

As well as increasing revenues by £6bn to £102bn, Yorkshire’s top 250 firms now have cash in the bank in excess of £3.2bn – an almost £1bn rise from the previous reporting period.

Further analysis, which splits the top 50 firms (£300m+ turnover) and the mid-market 200, reveals that the region’s medium-sized businesses are driving growth and prosperity for Yorkshire.

The report shows that mid-sized firms are quickly outperforming larger businesses in all key performance indicators, Turnover, overseas sales and employee numbers are growing faster in the mid-market than they are among Yorkshire’s biggest firms.

Turnover has grown by 13.2% for mid-sized firms (compared to 5.2% for the largest 50 companies); employment levels are up 11.6% (compared to 2.8%) and overseas sales have rocketed by 19.3% (compared to just 3.6% in large firms).

The report also indicates that Yorkshire’s economy is remaining strong, with manufacturers accounting for 72 of the top 250 companies. The region’s manufacturers saw profits before tax increased 38% to more than £1bn in the reporting period. The sector also accounts for more than half (£4.9bn) of the total overseas sales made by the 250 companies.

The retail sector continues to be the largest contributor to revenues (£44.3bn), however profits have plummeted following another negative year for food retailers Asda and Morrisons, which account for more than 90% of the sector’s revenues. Manufacturing was the second biggest contributor with revenues at £12.4bn, followed by the food and drink sector which recorded a 22% jump to £11.3bn.

Profits after tax for the top 250 companies – not accounting for Asda and Morrisons – increased by 46.7% to £2.1bn. This rise is reflected by director remuneration which increased by 18.1% to £178k.

The top 250 firms in Yorkshire also created almost an extra 30,000 jobs in the reporting period, with employee numbers increasing from 591,000 to 620,000. The average salary rose by 2.2% to £19k.

BDO’s report states that 52% of the 250 companies listed are based in West Yorkshire, followed by 21% in South Yorkshire, 15% in North Yorkshire and 12% in East Yorkshire.

Leeds is the most represented city with 51 of the region’s top 250 headquartered there. Sheffield (24), Bradford (16), York (14) and Hull (13) companies also feature a high number of headquarters.

Terry Jones, partner and head of BDO LLP in Yorkshire, said: “Yorkshire firms have recovered well and are growing strongly, with cash in the bank, employment and overseas sales all on the up. But what’s really clear is how important the mid-market is to our regional economy and future prosperity. Medium-sized businesses – our newly named ‘Brittelstand’ - are the real drivers of growth in our region. With continued investment, ambitious growth strategies and the right government support, they will fast become the big businesses of tomorrow.

“The region is bursting with new development and economic promise, and with the Government’s commitment to creating the Northern Powerhouse and talk of a £15bn investment in transport, infrastructure and science, the future is bright for Yorkshire.”

Terry Jones added: “That future is already built on solid foundations. We are not heavily reliant on one city or one sector, with manufacturers, TMT companies and construction firms from every corner of the region gracing this year’s top 250.

“The big challenge now is to convert the confidence and cash into long-term business investment. By grabbing the right opportunities with both hands, we can accelerate growth for Yorkshire businesses in both domestic and international markets.”

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