Profits grow faster than inflation for most
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%.