The report, by industry analysts Plimsoll Publishing, says that over the last two years, growth in the market has been sporadic, averaging only 8.6 per cent two years ago and 6.3 per cent last year. “Yet last year, a group of 455 companies emerged increasing sales at twice the average of the rest, averaging 31 per cent growth,” Plimsoll says.
Of the 1492 companies analysed in the research, 412 were found to be suffering the consequences of these high growth companies. Collectively, these firms saw sales fall by 15.3 per cent in the same period. According to David Pattison, senior analyst on the project: “This is absolute evidence of how most of the growth in the market is going to a select group of companies.
“For me it’s evidence that the market is changing as the revenue and growth streams of even five years ago are not the same as for 2006. These 455 winning companies seem to know some of the answers and they are telling us all something about the future direction of the market.”
But Pattison said there is strong evidence that this is not simply a case of the larger companies forcing the smaller companies out of the market. There is growth amongst the smaller companies, but it clearly has less effect on the market.
Of the smaller companies with sales of less than GB pound 3m, average growth was four per cent compared to the industry average of 6.3 per cent, 53 per cent delivered an increase in sales, and 226 companies increased sales by an average of 30 per cent.
“There does seem to be a buoyant market amongst the smaller companies but the competition is more focused,” Pattison said. “Companies tend to be less concerned with the overall market and more concerned with their immediate competitors. However, of the smaller companies that suffered a decline in sales, the average decline was -19 per cent. This suggests that if sales do decline at a smaller company, the effect can be severe.”
* Copies of the full 1782-page analysis are available from Plimsoll Publishing for GB pound 305. Security Installer readers will receive a 5 per cent discount when ordering. Call 01642 626 400 or visit www.plimsoll.co.uk for more information.
