Big changes in the qual­i­fy­ing group

Belfast Telegraph - Top 100 Northern Ireland Companies - - ANALYSIS -

In a sta­ble busi­ness com­mu­nity, iden­ti­fy­ing the im­por­tant busi­nesses would be ex­pected to re­flect a de­gree of con­ti­nu­ity, year to year, with only a small amount of ‘churn’.

Some large busi­nesses will go up and down the league ta­ble, based on size and prof­its but the num­ber of new entrants, or the num­ber of leavers, might be only a small percentage of the fi­nal list of 100.

The Top 100 list now fi­nalised posed a de­mand­ing test of that as­sump­tion. Of the 100 now listed, with some sur­prises, 23 of the busi­nesses are new to the list and, log­i­cally, 23 which were in­cluded a year ago, have not qual­i­fied for in­clu­sion.

In sup­port of a search for sta­bil­ity, one fea­ture stands out. De­spite the mo­bil­ity of busi­nesses within this list­ing, none of the 2018 en­tries has closed. There has been a small num­ber of merg­ers and re­struc­tur­ing changes but no sin­gle clo­sure. How­ever, even that re­as­sur­ance calls for some reser­va­tions.

The scale of changes in prof­itabil­ity, for many busi­nesses, has been large.

Of the 23 busi­nesses join­ing the list:

Three are newly iden­ti­fied emerg­ing busi­nesses

20 are busi­nesses which recorded an in­crease in pre-tax prof­its to over £4.4m from a lower profit fig­ure a year ago

Of the 23 busi­nesses leav­ing the list:

One now only op­er­ates out­side NI

22 are busi­nesses where recorded pre-tax prof­its, which were high enough to qual­ify for in­clu­sion in 2018, have more re­cently fallen be­low £4.4m

Of the Top 100, sev­eral have reg­is­tered sig­nif­i­cant profit in­creases of­ten in the form of one-off reval­u­a­tions or re­state­ments, in­clud­ing:

SSE Re­new­ables On­shore: an in­crease of nearly £50m

Kil­lul­t­agh Hold­ings: a change of nearly £100m on the pre­vi­ous year

En­circ: a change of nearly £40m on a pre­vi­ous year

Ban­ner Dell: a change of nearly £30m on a pre­vi­ous year

De­creases in pre-tax prof­its have been con­spic­u­ous for some large busi­nesses. Most of the large de­creases can be at­trib­uted to ex­cep­tional costs, cap­i­tal write-down or im­pair­ments taken on to the profit and loss ac­count. Con­se­quently, these de­creases are not nec­es­sar­ily an in­di­ca­tion of a long-term trad­ing fail­ure. Some of the big­ger ad­just­ments af­fect­ing busi­nesses leav­ing the list ap­ply to:

AES af­ter a write-down, post­ing a loss of £76.4m Ran­dox Hold­ings af­ter post­ing an ex­cep­tional loss of £11.2m

Cater­pil­lar Cor­po­ra­tion af­ter post­ing an ex­cep­tional loss of £20.9m

Wrights Group af­ter a fall in prof­its of £9m North­stone af­ter a fall in prof­its of over £4m

Ten of the busi­nesses fall­ing out of the list this year could be de­scribed as still com­ing within a short dis­tance of qual­i­fi­ca­tion. Sim­i­larly 12 of the newly qual­i­fied busi­nesses are, es­sen­tially, busi­nesses record­ing a use­ful prof­its in­crease in nor­mal trad­ing.

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