Foreign-owned SMEs ‘underperforming’, says Endless

ACCORDING to research from private equity firm Endless some 43% of foreign-owned SMEs based in the North West are either loss making or only marginally profitable.

Nationally this figure stands at 41% and the firm has drawn a contrast with the 27% of UK-owned businesses that are under performing in the same way.
 
The research, which its says monitors the “great unloved”, measured the performance of the 2,096 SMEs under foreign ownership with turnover between £25m and £500m.

These businesses generate sales of more than £188bn with net assets worth nearly £100bn and earnings of more than £19bn. In total, there were 129 businesses in the North West, of which 55 were classified as the ‘Great Unloved’.
 
Endless reckons that if these businesses were performing as well as the average foreign-owned SME, they could generate an extra £2bn tax revenue to the Treasury.

Managing partner Garry Wilson said: “There is no shortage of evidence that foreign ownership can bring huge benefits to UK firms – Jaguar Land Rover and Cadbury’s being prime examples. But this research highlights the large proportion of foreign owned UK businesses that do not seem to contributing healthy profits to their parents or the UK economy as a whole.

“While tax planning will certainly play a part in these statistics, many of the underlying businesses have become part of what we call the ‘Great Unloved’ – businesses that are non-core to their parent group, cut off from investment and failing to realise their potential.”