A glance at any of the business pages will tell you the outlook for UK businesses is distinctly brighter than in previous years.
M&A activity, just one element of business growth strategies, soared in the first half of this year and Yorkshire’s businesses have also been performing well.
Leeds is outperforming Manchester, Birmingham and Edinburgh as a base for growing businesses, according to the Sherry Coutu Scale-Up Report published in The Sunday Times earlier this year. Yorkshire businesses are proving themselves to be vigorous and becoming more competitive, with many having ambitious business growth strategies – 13 Yorkshire and North East businesses were ranked in The Sunday Times Virgin Fast Track 100 league table in 2014, compared to seven in 2013. Together, these Yorkshire businesses employ 1,800 staff and have achieved combined sales of £760m.
The report, which ranks Britain's 100 private companies with the fastest-growing sales over their latest three years, has previously included the likes of Carphone Warehouse, Innocent, Graze and the fashion retailer Victoria Beckham. Typically, the businesses are owned and run by entrepreneurs; have between 20 and 500 staff; with average three year sales growth ranging between 45% and 375% pa, sales ranging between £5m and £100m; and 25% of the companies have venture capital backing.
Among the Yorkshire businesses listed is soft drinks maker Cawingredients, the Northallerton-based company which counts Aldi UK and several of the UK’s leading soft-drink brands as its customers. Established in 2010, it is ranked an impressive 13th and doubled its sales in 2013 to £44.3m, helped by investment in its Leeming Bar manufacturing facility – clearly a company with a defined business growth strategy. With three year average sales growth at 125.57% pa, the company is certainly not resting on its laurels and has embarked on a £44m expansion plan over the next two years, creating 100 jobs and enabling it to build on the 200 million bottles that passed through its warehouse last year.
Not far behind, at number 17, is Wetherby-based Earthmill, the wind turbine installer, which was founded in 2009. The firm both installs wind turbines for farmers and leases their land for Earthmill to install and run its own turbines. Driven by high demand, sales hit £13.4m in 2014 – up from £1.4m in 2011 – giving a three year average sales growth of 112.58% pa. The company received a £4.1m investment from private equity house Connection Capital in 2013 and continues to evolve, having recently diversified into the combined heat and power market, in response to the changing renewable energy subsidy landscape.
Another proponent of the business growth strategy is low-cost gym operator Pure Gym, which is headquartered in Leeds and ranks 18th. Founded in 2008, the business differentiates itself through its 24 hours a day, seven days a week facilities and no fixed-term contracts. Chief executive Peter Roberts sold a majority stake to American private equity firm CCMP in 2013 when sales reached an annualised £48.3m and it delivered a three year averages sales growth of 108.66% pa.
Other Yorkshire companies in the Fast Track 100 include Leeds-based budget gym operator Xercise4Less (no. 21); the energy-saving and heating specialist, Help-Link UK (No.44); Bradford-based business travel agent, Redfern Travel (No.50); SportsShoes.com (No.100), the sports goods retailer based in Shipley; commercial gas supplier and Harrogate-based business CNG (No. 94); Melton-based waste recycler Transwaste (No.60); BDB Design Build (84), the car showroom builder based in Sheffield and Barnsley door distributor, Distinction Doors (No.93). Over in the Northeast, businesses listed are kitchen appliance manufacturer Andrew James (No. 24), based in Durham and Express Engineering (No. 88), the Gateshead-based precision engineer.
Irrespective of how a business intends to grow, through mergers and acquisitions, joint ventures or ongoing growth, the management team must carefully consider what extra support it might need and where it might turn for a good sounding board and source of advice on these strategies. It’s important to not only consider where the business is now but look at where it wants to be in the future. At Clarion, we make it our priority to immerse ourselves in clients’ businesses. We focus on building long term relationships with all our clients that evolve with their business, rather than simply serving their immediate legal needs. That way, we can really get to know our clients and can provide added value to their businesses over a long period of time.
Clarion specialises in supporting businesses through periods of acquisition and growth, helping them with the rigorous legal due diligence work needed to reassure potential investors and prepare businesses for these next steps. This includes customer and supplier contracts, intellectual property and IT. We also provide practical advice on the business growth strategies and opportunities available and as the company continues to grow, we can support its changing needs – from strategic guidance on further growth to preparing for a management buyout or sale of the business.
Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.