Yorkshire Report: Five-year record reflects economic climate
YORKSHIRE’S top directors have seen their pay packets hit, reflecting the changing economic climate, according to BDO’s 2011 Yorkshire Report.
BDO’s 2011 Yorkshire Report is the fifth report by the accountants and business advisers to reveal what economic shape the region is in.
And for the first time the report, which details the performance of the region’s top 150 companies, can publish the participants’ five-year records.
The report has found that the average director remuneration over the five year period peaked at £198,000 in 2009 but has fallen to £166,000 this year.
It also found that the net asset worth of Yorkshire’s top 150 companies has reflected the fluctuating wider economic climate.
The value of net assets peaked at £25.3m in 2009 and even though the effect of asset impairment started to bite in 2010, their value started to recover once again at the start of this year to £23.7m.
Inventory write downs impacted on gross profit figures in 2010 (19.5%) to recover to a five year high of 21% in 2011, up 3% from 2007.
Ian Beaumont, managing partner of the Leeds office of BDO, said: “As business leaders we’ve been through a rollercoaster five years. The first Yorkshire Report launched in 2007 and it was in December of that year that we saw revenues peak until March 2008.
“After this revenue declined and this is when we first noticed companies begin to struggle and the recession started to bite.
“Profits before tax reached their height in 2009, before dropping right down in 2010 when the recession hit hard. However, this year’s report has revealed that companies have fought hard and they have succeeded in pairing back costs.”
Although the group’s workforce shrank over the five year period from 484,000 to 460,000, figures for revenue per employee have remained largely stable.
Since 2007, Yorkshire has moved away from a low cost and overseas employee model with a revenue per employee figure of £173,000 in 2011 as opposed to a value of £154,000 in 2007, the report found.
Mr Beaumont added: “There are considerable grounds for optimism even in challenging economic conditions with businesses still facing worrying levels of uncertainty.
“By reducing costs and improving efficiency the region’s businesses are primed to emerge stronger, leaner and fitter.
“It’s important to remember that what will ultimately drive the success of Yorkshire’s top 150 companies is their underlying strength.
As demonstrated by improved profits, the group’s balance sheet is strengthening. Uncertainty remains, but we can at least face it with greater security.”
