Cleanzine: your weekly cleaning and hygiene industry newsletter 18th April 2024 Issue no. 1110

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Profits down as UK cleaning firms feel the pinch

A study into the profitability of the UK's largest Cleaning Equipment & Materials companies has revealed a widening gap between firms making outstanding profits and those losing money.

The latest Plimsoll Analysis found average profit margins have fallen to 5.4% of sales and 214 of UK's top 676 Cleaning Equipment & Materials companies are now running at a loss - a finding that would lead you to believe the industry was suffering with chronic oversupply, rising costs and severe pricing issues. However, the same study has revealed 77 businesses are making record profits.

David Pattison, senior analyst at Plimsoll, argues: "Sometimes the public perception of profit is wrong. It's seen as companies taking advantage of their position or exploiting their commercial advantages unfairly. But these successful companies should be proud of their achievements. In an industry not know for its successes, these businesses should act as benchmarks to the rest of the industry showing what can be achieved."

Key findings from the analysis are:

The 77 'rich' companies:

* The average profit margin at these companies is 13.84 % - way above the industry average
* 49 of these firms are operating completely debt-free
* Average sales per employee figures are £158,300

The 214 'poor' companies:

* 86 companies are now considered to be a high financial risk
* For 130 companies, this is the second year in a row of making a loss
* On average these companies are losing 2% on sales - so for every £1 of sales it is costing them £1.02 to deliver

"The latest Plimsoll Analysis highlights that the industry is being split into two types of company and the gap between the rich and the poor is getting bigger and bigger," adds David. "For the companies that are falling behind, they need to re-evaluate their strategy and retain profit in order to improve their financial strength."

The Plimsoll Analysis, which is also available in an online format, provides an individual profile of each of the UK's top 676 Cleaning Equipment & Materials companies. It offers an overall financial rating, a valuation as well as an acquisition attractiveness assessment on each company.
Cleanzine readers are entitled to a £50 discount off this report by quoting reference PR/SV18 when ordering.

T: 01642 626 419
E: [email protected]
W: www.plimsoll.co.uk

13th June 2013