North West SMEs saw profits tumble in 2010
A QUARTER of small and medium-sized businesses in the North West saw their pre-tax profits halve in 2010, research has shown.
The findings appear in the newly launched SME Distress Monitor which has been produced by accountancy firm Baker Tilly and Company Watch, which provides analysis of the financial health of companies.
The figures are based on 2010 accounts filed with Companies House by 1,744 businesses based in the region with a turnover between £5m to £25m.
The research also reveals that the same percentage of SMEs in this turnover bracket have a current ratio of less than one, which indicates insufficient resources to meet their immediate debt repayments.
Additional findings show that, of those companies in the North West which filed full accounts for 2010, one in seven also reported more than a 20% downturn in sales.
Lindsey Cooper, restructuring and recovery partner at Baker Tilly, said: “Our research highlights how severely short term debt pressures are mounting for SMEs in the North West. As liquidity is tightening, it is essential that business owners take prompt action at an early stage to maximise the financial options available to them, in order to minimise future problems.
“As we have seen over the past few months in the regional construction, hospitality and retail sectors, the outlook for the high street and business in general is concerning. Implementing strategic safeguards and seeking timely advice will continue to be crucial to surviving these tough economic conditions.”
