Nine in 10 mid-sized firms in dan­ger un­less trade picks up

The Daily Telegraph - Business - - Business - By Jonathan Jones

NINE in 10 Bri­tish com­pa­nies with rev­enue be­tween £50m and £350m will only re­main in busi­ness for the next nine months if trad­ing does not im­prove, but there are signs of life for the be­lea­guered firms.

A sur­vey of 500 medium-sized busi­nesses con­ducted for ad­vice firm

BDO found that firms had been forced to take out an ad­di­tional £21m in debt on av­er­age to fund them­selves through the Covid cri­sis, with one in 10 un­likely to be able to fully pay it back.

This high level of debt is a barom­e­ter of how long the im­pact of the cri­sis will last. About two thirds of busi­nesses said the econ­omy will take be­tween one and three years to fully re­cover.

De­spite the Gov­ern­ment’s fur­lough scheme, nine in 10 busi­nesses have had to make job cuts, while al­most a third said they have re­duced their work­force by al­most a fifth in an at­tempt to cut costs. How­ever, there were signs of op­ti­mism. A third of busi­nesses sur­veyed said they had been largely un­af­fected by the coro­n­avirusin­spired eco­nomic slump.

Paul Eagland, man­ag­ing part­ner at BDO, said the suc­cess of medium-sized com­pa­nies would be key to Bri­tain’s eco­nomic re­cov­ery.

Mr Eagland said al­most a quar­ter of the com­pa­nies sur­veyed had al­ready shown “en­tre­pre­neur­ial spirit” by cre­at­ing new prod­ucts and ser­vices dur­ing the pan­demic.

Bromp­ton Bikes has im­proved its fac­tory to en­able so­cial dis­tanc­ing and launched a new model that can be paid for with monthly in­stal­ments.

As the fold­ing bike maker did not qual­ify for a gov­ern­ment-backed loan it se­cured an over­draft fa­cil­ity as a pre­cau­tion and placed some staff on fur­lough to con­serve cash.

Lorne Vary, chief fi­nance of­fi­cer of Bromp­ton Bikes, said Covid could in­crease in­ter­est in cy­cling as peo­ple stay away from public trans­port.

“For cy­cling, the virus out­break could ul­ti­mately lead to a place like Lon­don hav­ing its Am­s­ter­dam mo­ment.

“Peo­ple and gov­ern­ments are ready to em­brace a new way of get­ting around,” she said.

Bromp­ton Bikes has im­proved its fac­tory to cater for so­cial dis­tanc­ing mea­sures while launch­ing a new model

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