Prof­its grow faster than in­fla­tion for most

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

Re­search for the Top 100 lo­cal busi­nesses gives a bet­ter in­sight into the for­tunes, or mis­for­tunes, of the group and al­lows some busi­ness to busi­ness com­par­isons within sim­i­lar sec­tors.

The im­por­tant head­line is that these busi­nesses, as a group, have reg­is­tered im­proved re­sults in the year un­der re­view. Com­pa­nies re­port with dif­fer­ing year end-dates but our data might be treated as cov­er­ing a pe­riod par­tially of 2017 and into 2018.

The ag­gre­gate out­come is a fur­ther im­prove­ment in prof­itabil­ity:

To­tal pre-tax prof­its: £1.88 bn (com­pared to £1.52 bn a year ear­lier)

Pre-tax prof­its in­crease: 23% (un­ad­justed) 13% (ad­justed for ex­cep­tional changes)

The spread of percentage changes in pre­tax prof­its is large. 65 busi­nesses reg­is­tered in­creased prof­its; 35 reg­is­tered a re­duc­tion.

The in­ter­pre­ta­tion of changes in pre-tax prof­its mer­its a de­gree of cau­tion. Pre-tax prof­its can be very vari­able form one year to an­other. Small changes in sales, profit mar­gins, and costs of ma­te­ri­als can all have a much larger im­pact on prof­itabil­ity. The de­gree of spread in these fig­ures is not a sur­prise. The key con­clu­sion lies in the ag­gre­gate re­sults which in the year un­der re­view were en­cour­ag­ing.

There is one in­di­ca­tion of a less en­cour­ag­ing set of re­sults this year. Of the 100 busi­nesses se­lected:

In 2018 35 re­ported a pre-tax loss In 2017 24 re­ported a pre-tax loss

How­ever, a strik­ing fea­ture is the 27 which re­ported im­proved pre-tax prof­its had re­ported an im­prove­ment of over 50%.

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