Yorkshire’s top 250 companies are basking in the glory of their post-recession recovery, with revenues storming past the £100bn mark and cash stockpiles increasing by 43.7%. However it is mid-market firms – not large businesses – that are driving growth in the region, according to the Yorkshire Report 2015, published today by accountancy and business advisory firm BDO LLP
The top 250 firms in Yorkshire have increased revenues by £6bn to £102bn, and now have cash in the bank in excess of £3.2bn – an almost £1bn leap from the previous reporting period. However, further analysis which splits the top 50 firms (£300m+ turnover) and the mid-market 200 reveals it is the region’s medium-sized businesses that are driving growth and prosperity for Yorkshire.
Mid-sized firms are rapidly outperforming their larger peers 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 businesses.
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).
Terry Jones, partner and head of BDO LLP in Yorkshire, says: “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 backbone of Yorkshire’s economy remains strong, with manufacturers accounting for 72 of the top 250 companies. The region’s manufacturers saw profits before tax jump 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 tough 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 – excluding Asda and Morrisons – increased by 46.7% to £2.1bn. This hike is reflected by director remuneration which increased by 18.1% to £178,000. 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 £19,000.
BDO’s report states that West Yorkshire is home to more than half (52%) of the 250 companies listed, followed by South Yorkshire (21%), North Yorkshire (15%) and East Yorkshire (12%). 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 contribute significantly.
Terry Jones added: “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.
“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.”
