How healthy is the market?
May 27th 2009 The first snapshot of how the cleaning services market is changing as a result of the UK economic slowdown has just been released by industry analysts Plimsoll Publishing. The findings suggest that the brunt of the slowdown is being felt by a fifth of the companies in the market. Surprisingly, almost half of those surveyed have been largely unaffected, maintaining their financial strength, margins and some managing to even increase sales.
The study surveyed the UK’s Top 1000 Cleaning Services firms, based on their latest financial performance. Highlights extracted from the analysis show:
Market direction – Overall the market is showing no overall growth, compared to growth of almost 7% this time last year. However there is much change among the players in the market as they jostle for sales, highlighted by the huge gap in performance. 254 firms have seen their sales decline, some by as much as 16% and 557 firms have seen their sales increase, some by as much as 15%.
“The recession seems to have accelerated a shift in the market," says David Pattison, senior analyst at Plimsoll. "Some companies have been affected by those that have swapped to low cost alternatives or by the loss of a key client. Others are clearly benefiting from this move.”
Profitability – Overall profitability is slim, with most companies reporting profits of less than 2%. This is largely in line with last years figures as the early signs of recession were already taking an effect. However the gap between the very profitable and those missing out is widening. 431 firms have seen their profits fall, with one in five currently losing money and 569 firms have increased profitability, some reporting margins of over 6%.
“The recession has been a good thing for a number of companies," says Pattison. "It has sharpened their management and improved the accountability of the directors, so much so that these reorganisations are already leading to an increase in profitability.
"However for those that have yet to come to terms with this changing market, times are tough and they risk falling further behind the successful competition unless they respond to this changing market.”
The Plimsoll Analysis – Cleaning Services analyses each of the 1000 companies in the industry individually and rates each company on their financial performance. Copies are available to order by calling Clair Sherwood- Parkin on 01642 626422. A PDF version of the report is priced £350+VAT and readers can claim a 10% discount.
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