Solid Essex businesses tough out Brexit uncertainty as top firms' profits rise by 12%
PUBLISHED: 20:30 19 November 2019 | UPDATED: 07:14 20 November 2019
Essex businesses have proved impervious to Brexit uncertainty - with 2019 proving to be one of their most stable in recent years - an annual health check suggests.
The Essex Limited report shows a robust overall performance, with profits up 11.8% and turnover soaring by 15% to £10.5bn, as all seven sectors saw their businesses grow.
The study - compiled by financial experts at Grant Thornton in partnership with legal minds at Birketts - takes a look at the top 100 privately owned businesses in the county.
This year's results show Essex continuing to respond strongly to challenges surrounding Brexit, with businesses boosting their workforce by more than 10% as they prepare for the UK's possible exit from the European Union.
Meanwhile, average wages rose to £30,036 - an 11.1% rise - as firms strove to attract new talent and retain a skilled workforce.
The study showed that the majority of growth was organic, and had been achieved by improving internal processes, reinvesting in staff and skills and focusing on refining the products and services they provide.
Construction company Hill Holdings Limited, based in Waltham Abbey, was crowned Essex's top performing company for the first time after its turnover soared by 20.7%. It is followed by car dealers Glyn Hopkin Holdings Ltd in Romford, print firm Walstead Holdings Limited in Colchester and retail and commercial banking business Shawbrook Group PLC in Brentwood.
Elsewhere, the biggest mover in the Top 100 is construction specialists, Readie Management in Romford, which moved two positions to 10th place after experiencing significant organic growth of 38%.
Trevor Ling, tax director at Grant Thornton's Essex office in Chelmsford, who presented the findings, said the 'halo effect' from London - and the diversity of businesses - meant Essex was slightly better placed than other areas when it comes to surviving Brexit.
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"The Top 100 continues to be dispersed across both the county and a range of industries - from manufacturing and construction to retail and transport, which provides evidence of the many opportunities that are available in the Essex market," he said.
"Against a challenging backdrop, Essex Limited has delivered a strong overall performance including increases in turnover, profit, average wage figures and number of employees - clearly Essex Limited has both focussed on retaining their existing talent as well as growth through careful recruitment."
Essex Limited is compiled using the most recent publicly available accounts, as at October 2019, and provides a yardstick against which the county can assess its economic performance.
There were 10 new entrants to the Top 100, who contributed a hefty 11.4% to the aggregate turnover in the current year, and replaced only 6.1% of total turnover in the preceding year.
Property and construction remains the top sector in the county by both aggregate turnover and operating profit.
However, it had a more challenging year with six companies exiting the Top 100, which has resulted in a fall in profit overall, with turnover remaining static compared to 2018.
The service sector was the standout sector in 2019, achieving the largest growth in turnover and operating profit of 43.4% and 418.5% respectively. This was driven by the sector's highest new entrant in the year, Shawbrook Group plc, which de-listed from the stock exchange, but even on a like-for-like basis, the sector celebrated the largest growth with 12.5% and 18.6% in turnover and operating profit.
Another standout sector was the Essex automotive market, which saw 9.7% growth in turnover.
Adam Jones, partner in corporate law and finance at Birketts, said results across sectors had been varied, with property and construction - the star sector last year - showing a more volatile performance, possibly as a result of Brexit uncertainty and delay.
"Six of the seven sectors have also shown increased gearing this year, with companies placing more reliance on external debt financing to assist in organic growth. That growth is to be celebrated, as it is a product of Essex businesses backing themselves and their employees, but possibly also shows an apprehension about making new external investment decisions whilst the final Brexit outcome is still outstanding."