West Midlands’ biggest businesses have seen profits increase by 52% – BDO
THE inaugural West Midlands Report from accountancy and advisory firm BDO makes for pleasant reading for regional economy watchers.
It has revealed that the 200 biggest companies in the West Midlands have continued their post-recession revival with a hat-trick of increased revenues, profits and international sales.
The report – based on the firms’ latest published accounts – is intended to act as barometer of economic health for the region. It focuses on the largest 200 companies in the region based on revenues.
It shows the top 200 companies saw net profits increase by 52% to £7.6bn, compared to £5bn the previous year. Group revenues grew by 13% to £124bn. International sales also burgeoned, more than doubling from £14.4bn to £31.4bn in just two years, with overseas expansion being described as “the guiding principle” for growth for regional businesses.
The more stable economic and fiscal environment has also started to be reflected in recruitment and pay. According to the BDO analysis, 630,000 people are employed by the region’s biggest companies – almost 40,000 more than the 12 months previous.
Company directors seem to be benefiting the most. Total director remuneration increased by 26% to £264m in the last 12 months.
Richard Rose, partner and head of BDO in the West Midlands, said: “As a proud region with a strong sense of identity, the West Midlands has its own distinct economy.
“This solid financial progress shouldn’t be seen as a coup just for the region’s biggest companies but should be welcomed by the thousands of businesses in their supply chain and across the region, regardless of size.
“The growth in international sales is a huge step in the right direction and seems to be the guiding principle behind a growing number of large and mid-market businesses across our region.”
Overseas sales account for more than a quarter of turnover for the top 200 companies.
Manufacturing is leading the way, with machinery and transport making up 71% of goods sold abroad. Jaguar Land Rover is by far the region’s biggest success story, contributing one fifth of all UK exports to China.
Less traditional export markets are also coming to the fore. The report cites South America, Australia, New Zealand and Indonesia as destinations of choice for many regional firms.
The BDO report also finds that Birmingham is home to 59 (or 30%) of the top 200 companies in the West Midlands, followed by Coventry & Warwickshire (45 companies) and the Black Country (34).
However, it is the county home of JLR, Coventry & Warwickshire that generates the largest amount of revenue, accounting for 46% (£57.2bn) of the top 200’s £124bn total turnover.
Herefordshire is the smallest contributor with only five companies being in the top 200, accounting for £976.5m in revenues.
