YORKSHIRE’S top firms are reaping the rewards for being careful with money, a survey has revealed.
A report by business advisers BDO Stoy Hayward showed that the region’s leading 150 companies had benefited during the downturn from typical Tyke prudence, low debt ratios – or gearing – and aversion to risky ventures.
The report said the companies – including 10 based in Kirklees and Calderdale – lifted profits after tax by 20% and revenues by 3% in 2008.
And it added: “While Yorkshire is far from immune to the effects of recession, companies will be relatively well placed for the current troubles and the turmoil ahead.”
Ian Beaumont, Huddersfield-born managing partner at BDO in Leeds, said: “Yorkshire is a region renowned for it’s financial prudence and last year we revealed that a tight focus on operating efficiency had put the top 150 in a leaner and meaner position to face the rigours ahead.
“The latest Yorkshire Report reinforces this as strict cost control and relatively low gearing has blunted the recession’s early impact on the Group’s latest results.”
He added: “The conditions we are currently experiencing are proving to be far more challenging than we could have imagined, particularly for the region’s financial sector.
“But Yorkshire’s businesses are still in relatively good shape as a result of their proven discipline, shown in tight cost control, prudent gearing and focus on cash generation – all of which have never been more important for business survival.”
The report said Yorkshire firms had taken a “distinctly conservative stance” on debt – allowing the top 150 to enter a period of deep uncertainty with a much stronger capital base.
The companies had also maximised cash reserves by cutting costs and increasing operational efficiency.
Said Mr Beaumont: “Access to cash and low gearing put a number of the region’s companies in a strong position to make selective acquisitions and investments that could provide a competitive advantage.”
The report said it was difficult to predict when the “first global recession of the information age” would end.
It said current estimates suggested that more than 32,000 UK firms could go to the wall this year – with the failure rate not peaking until 2010.
Said Mr Beaumont said: “Our forecasts confirm that it will be a long haul and Yorkshire will not be immune from the effects.
“Identifying key products, customers and channels – and focusing on them – should be part of any survival strategy for a business, regardless of size.