NEWS6 June 2013

Over a third of UK market research firms feel the strain

Financials UK

UK — Over a third of British market research companies are running at a loss according to research from financial analyst Plimsoll.

The latest Plimsoll Analysis found that 220 of UK’s top 599 market research companies were now running at a loss – although 104 businesses were making record profits – while average profit margins have fallen to 6.6% of sales

The study said that the findings would appear to show that “the industry was suffering with chronic oversupply, rising costs and severe pricing issues”.

Plimsoll senior analyst David Pattison said: “The latest Plimsoll Analysis highlights that the industry is being split into two types of company and the gap between the rich and the poor is getting bigger and bigger. For the companies that are falling behind, they need to re-evaluate their strategy and retain profit in order to improve their financial strength.”

Key findings from the analysis:
The 104 rich companies:

  • The average profit margin at these companies is 18.44 % – way above the industry average
  • 66 of these firms are operating completely debt free
  • Average sales per employee figures are £121,800

The 220 poor companies:

  • 103 companies are now considered to be a high financial risk
  • For 103 this is the second year in a row of making a loss
  • On average these companies are losing -4% on sales – so for every £1 of sales it is costing them £1.04 to deliver

@RESEARCH LIVE

1 Comment

7 years ago

I'm not surprised. The marketplace is fiercely competitive and some agencies are, in our experience, submitting silly prices to win projects. You can't get away with that for long. Skimming profit margin is one thing, buying business is another. What's the point of being in business if you're going to run at a loss?

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