IQ-Magazine-Issue-15

IQ growth report
CAMBRIDGESHIRE LTD
Grant Thornton’s analysis of the performance
of Cambridgeshire Ltd, the top 100 companies
in Cambridgeshire across the eight sectors of
Technology (largest and highly profitable); Food &
Beverage; Automotive; Business Support Services;
Retail & Wholesale; Land & Rural; Manufacturing
and Property & Construction, is undeniably positive.
It demonstrates continuing growth in turnover
in the county, as well as a substantial increase in
profit, reflecting the vibrancy and diversity of
Cambridgeshire’s business community.
Statistics presented by Grant Thornton show rapid
rises in returns and rewards overall. Turnover
has increased by 6% to £10,085m, with 73%
of companies reporting higher sales. Figures for
EBITDA (Earnings before interest, tax, depreciation
and amortisation) are particularly strong; it has risen
overall by 31% to £1,161m; 71% of companies
report an increase in EBITDA, whilst 96% have
positive EBITDA. Technology companies not only
show the largest EBITDA increase, but this sector
is also the most profitable. Business support services
represent the second highest increase in turnover,
whereas, atypically, the Food & Beverage Sector has
seen a slight reduction in turnover.
Another characteristic of Cambridgeshire Ltd is
re-investment for growth. Its businesses remain
largely focused on self-generated funding, seeing
external debt as a top-up rather than the mainstay
of investment. The improving strength of the balance
sheet suggests that resources are available for the next
generation of business leaders.
Furthermore, the success of business in
Cambridgeshire is based on creating an attractive
environment for entrepreneurs; some of the county’s
strongest growth happens just outside the Top 100
businesses. The EBITDA of the businesses which
Grant Thornton calls ‘Ones to Watch’ has increased
by 43% over the past two years, during which
time their employee numbers have also seen an
increase of 18%. Grant Thornton’s Growth Index,
comprising the 25 companies in Cambridgeshire
Ltd with the highest rate of EBITDA improvement,
corrects the assumption that growth is solely
driven by rapidly growing technology companies;
although the Technology sector generates 59% of
Cambridgeshire’s £1,161m EBITDA, 72% of the
companies in the Growth Index are MSBs, with the
highest placed companies being in the Manufacturing
sector.
In his foreword to Grant Thornton’s report, Professor
Christopher Loch writes optimistically, commenting,
“Cambridgeshire remains a county of enterprise and
entrepreneurs, with start-ups being created out of the
university as well as local businesses. Recent inbound
investment demonstrates that Cambridgeshire
continues to be an attractive place to do business.”
He does suggest, however, that “The county’s
challenge is to continue to provide the mechanisms
and infrastructure to enable it to prosper further.”
Paul Naylor, Partner at Grant Thornton, UK LLP,
draws attention to increasing profit growth: “The
success … shows no immediate signs of slowing.
This is evident from those companies just outside
the Top 100 which are displaying strong growth. It
is a reflection of the strength of the businesses within
our county that this growth isn’t confined to one
particular sector or size of business.”
issue 15 | page 16