Lost profit costing companies millions
August 14th 2007 The British air compressors industry is wasting £45m worth of profit every year, according to a new study by business analysts Plimsoll Publishing
A new in-depth report from Plimsoll Publishing has found how 155 companies in the market would make more profit if they were taken over. The report finds that:
• 25% of companies are making a loss
• 15% are losing money for the second year running
• 4% of companies made less than 3% return on investment
The findings suggest that a staggering 155 of the 210 companies covered would make more profit under new ownership, resulting in £45m extra revenue in the industry as a whole. At the moment, that money is being simply thrown away because of companies’ failure to control their losses and manage their businesses more effectively.
The senior analyst on the project, David Pattison, said: “These results prove just why the air compressors industry is currently hot with takeover talk and speculation about future ownership. It’s certainly no surprise that trade buyers and private financiers are taking a close look at the industry – some of these air compressors businesses have huge potential that is not being realised at the moment. We’ve heard a lot about private equity firms recently, and this is one industry where they could reap rich rewards.”
The Plimsoll report highlights each firm’s hidden potential and demonstrates how simple changes can transform both the performance and overall value of a company. Some of the classic strategies which companies are failing to put in place include:
• Cutting out unprofitable sales. In some cases, a 10% drop in sales could actually improve profitability
• Looking again at unnecessary stock levels and keeping control of trade debtors to free up cash
• Reducing borrowing to improve profitability
• Reviewing productivity to the point where sales per staff member are at least £120,000. This is a key business measure that often goes unchecked.
The new Plimsoll analysis of the air compressors industry applies the same tests to each business that any corporate investor would, identifying a “profit plan” for each one and outlining its strengths and weaknesses in an easy to understand format.
The new report is available to order by calling Clair Sherwood on 01642 626422 or e-mail. Readers can obtain a 20% discount when quoting the reference PR07 More articles from Plimsoll Publishing Ltd: | 
