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08/04/2003
Company Profitability Falls For 14th Consecutive Quarter
The continued decline in the profitability of UK companies has seemingly been confirmed by Experian's latest Corporate Health Check, which is compiled from the financial results of the 2,000 largest companies in the UK.
According to the survey, the average return on capital among leading British companies across the industrial economy fell from 7.57% in the 12 months to June 2002, to 6.98% in the twelve months to September 2002.
"This is the fourteenth quarter in a row that UK corporate profitability has fallen," commented Peter Brooker, author of the report, "more than in either of the last two recessions. Profitability peaked in early 1999 at 14.18%, since when it has more than halved. If anything, the decline is gaining momentum; the fall over the last four quarters is easily the steepest annual decline during the four years that profitability has been in decline – and the rate of decline has accelerated in each of those four years."
The worst-affected sectors are IT, Media, Telecommunications and Engineering, while the Textiles sector has fought back from overall losses accrued during the last few years.
The report suggests part of the reason for lower profitability lies in substantially higher costs for businesses, mostly from new legislation, such as the rise in employers' NIC, which took effect on 6 April. Low capital investment is also cited as a factor, depressing profitability to such an extent that it threatens the long-term viability of many companies. Indeed, in 2002, business failures rose by almost 10%.
Mr Brooker added: "The economic outlook has changed considerably since the third quarter of last year. Since then, of course, the war has begun and its prosecution will affect consumer confidence, particularly if casualties begin to mount.
"Whether consumers will have the confidence to prop up the economy under these circumstances is debateable – particularly as they will have begun to see the effect of the largest direct tax rises since the current government came to power and, especially in the South East, swinging increases in Council Tax rates."
(CL)
According to the survey, the average return on capital among leading British companies across the industrial economy fell from 7.57% in the 12 months to June 2002, to 6.98% in the twelve months to September 2002.
"This is the fourteenth quarter in a row that UK corporate profitability has fallen," commented Peter Brooker, author of the report, "more than in either of the last two recessions. Profitability peaked in early 1999 at 14.18%, since when it has more than halved. If anything, the decline is gaining momentum; the fall over the last four quarters is easily the steepest annual decline during the four years that profitability has been in decline – and the rate of decline has accelerated in each of those four years."
The worst-affected sectors are IT, Media, Telecommunications and Engineering, while the Textiles sector has fought back from overall losses accrued during the last few years.
The report suggests part of the reason for lower profitability lies in substantially higher costs for businesses, mostly from new legislation, such as the rise in employers' NIC, which took effect on 6 April. Low capital investment is also cited as a factor, depressing profitability to such an extent that it threatens the long-term viability of many companies. Indeed, in 2002, business failures rose by almost 10%.
Mr Brooker added: "The economic outlook has changed considerably since the third quarter of last year. Since then, of course, the war has begun and its prosecution will affect consumer confidence, particularly if casualties begin to mount.
"Whether consumers will have the confidence to prop up the economy under these circumstances is debateable – particularly as they will have begun to see the effect of the largest direct tax rises since the current government came to power and, especially in the South East, swinging increases in Council Tax rates."
(CL)
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02 December 2002
Survey shows company profitability falls further
The latest figures published by business analysts Experian confirm that UK company profitability has fallen by almost half over the past three years.
Survey shows company profitability falls further
The latest figures published by business analysts Experian confirm that UK company profitability has fallen by almost half over the past three years.
16 July 2001
SLUMP IN PROFITABILITY HITS UK JOBS AND INVESTMENT
BRITISH industry could be teetering on the brink of recession as profitability has fallen for the seventh consecutive quarter in the 12 months to December 2000, according to information solutions company Experian.
SLUMP IN PROFITABILITY HITS UK JOBS AND INVESTMENT
BRITISH industry could be teetering on the brink of recession as profitability has fallen for the seventh consecutive quarter in the 12 months to December 2000, according to information solutions company Experian.
11 July 2001
MARKS & SPENCER REPORT FURTHER SALES SLUMP
UK retailer Marks & Spencer has reported a 9.1 per cent slump in clothing sales during the 14 weeks up to 7 July. This represents a further decline since the company's last update when sales fell in the same area by 6.5 per cent. However, on a more positive note the company’s food sector showed continued profitability with a 5.9 per cent - or 4.
MARKS & SPENCER REPORT FURTHER SALES SLUMP
UK retailer Marks & Spencer has reported a 9.1 per cent slump in clothing sales during the 14 weeks up to 7 July. This represents a further decline since the company's last update when sales fell in the same area by 6.5 per cent. However, on a more positive note the company’s food sector showed continued profitability with a 5.9 per cent - or 4.
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After two years of unrelieved gloom there is a widespread feeling among manufacturers in UK regions that they have turned the corner putting the worst of the recession behind them. This was one of the main findings of the latest quarterly Regional Trends Survey, published by the CBI and Business Strategies.
UK manufacturers begin climb out of recession
After two years of unrelieved gloom there is a widespread feeling among manufacturers in UK regions that they have turned the corner putting the worst of the recession behind them. This was one of the main findings of the latest quarterly Regional Trends Survey, published by the CBI and Business Strategies.
14 February 2002
HP profit triples on back of consumer demand
Fuelled by strong consumer sector sales, computer giant Hewlett-Packard has seen profits for the first quarter triple to $484 million due to strong domestic printer and computer sales.
HP profit triples on back of consumer demand
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