Plimsoll has rated each of the UK’s largest 1000 telecommunications services companies into one of five ratings based on their overall financial performance. Ratings have been given as Strong, Good, Mediocre, Caution and Danger.
David Pattison, Senior Analyst at Plimsoll, has the following view on the findings “It was no real surprise to see the high number of companies on the Danger list, given the current economic crisis affecting the telecommunications services industry.
However we were very surprised to see the high number of excellent businesses making it on to the strong list. I think these firms have really upped their game in these difficult times and they are concrete proof that necessity is the mother of invention.”
During the latest financial year analysed, these 396 strong firms have boasted the following impressive performance statistics.
Sales growth - On average these firms have seen sales increase by 4.2%. This figure is an impressive statistic in a market which is generally flat. This demonstrate the strongest players’ ability to take market share from their rivals
Profit margins - For the strong companies, their profit margins are sitting at an average of 7.3%, as they have cut costs and used competitive buying to increase their bottom line.
Levels of debt - Debts have all but been removed from these companies. Most are operating completely debt free, thus reducing their reliance on the banks and other lenders.
Efficiency / productivity - Big improvements in efficiency means these firms are now delivering over £185,000 sales per employee compared to others in the industry that struggle to deliver £165,000. This gives them a significant competitive advantage.
Pattison continues, “Obviously there are real concerns over the 329 firms rated as Caution and Danger, their futures look extremely uncertain. Their management are now operating under severe financial pressure where even normal trading is proving hazardous. Many of these firms seem likely to be sold off; they are at an extremely high risk of failure unless they turn their performance around fast.”