Service sector exports at their highest for almost two decades

THE UK service sector has achieved export levels not seen since 1994, a partner at Catalyst Corporate Finance has said.

Mark Humphries said the recently-published Q1 2013 British Chamber of Commerce (BCC) report proved interesting reading.

The BCC report defines the service sector as engineering services, architecture, building services, professional and technical services, education and training, IT managed services and financial services.

“Our experience working with businesses in the services sector shows they all have a very significant overseas presence and that they are growing strongly due to overseas market penetration and growth,” said Humphries.

“These businesses all have scale, a strong reputation with first class credentials, and are all exporting their strong know-how (people, processes and technology) gained from being market leaders in the UK. Their expansion overseas is typically driven by their international clients with a UK head office encouraging their trusted service provider to open offices overseas to replicate their service offering.”

However, he said it was not all plain sailing for UK services companies when exporting their services overseas as they faced a number of challenges.

These include:
•    Protecting their culture – the culture that made them successful in the first place
•    Overseas markets tend to be less mature so there is often a growth lag as the market is educated on the benefits of their services
•    Different working practices overseas which require their market-leading services to be adapted in order to be successful
•    Hiring strong local office managers with strong networks, local market intelligence and international business skills.

“In summary, the leading UK service companies are performing extremely well and as a result, becoming an attractive target for private equity investment to help drive the business on at a faster rate, or on to the radar of the large international serial acquirers. This will translate into more deals and continued growth across the sector,” concluded Humphries.