A study into the profitability of the UK’s largest Wines & Spirits Wholesalers companies has revealed a widening gap between firms making outstanding profits and those losing money.
The latest Plimsoll Analysis found average profit margins have fallen to 5.2% of sales and 211 of UK’s top 711 Wines & Spirits Wholesalers companies are now running at a loss – a finding that would lead you to believe the industry was suffering with chronic oversupply, rising costs and severe pricing issues. However, the same study has revealed 56 businesses are making record profits.
David Pattison, senior analyst at Plimsoll, said: “Sometimes the public perception of profit is wrong. It’s seen as companies taking advantage of their position or exploiting their commercial advantages unfairly. But these successful companies should be proud of their achievements. In an industry not know for its successes, these businesses should act as benchmarks to the rest of the industry showing what can be achieved.”
Key findings from the analysis
The 56 rich companies
- The average profit margin at these companies is 12.72 % – way above the industry average
- 28 of these firms are operating completely debt free
- Average sales per employee figures are £ £530,800
The 211 poor companies
- 90 companies are now considered to be a high financial risk
- 107 this is the second year in a row of making a loss
- On average these companies are losing -2% on sales – so for every £1 of sales it is costing them £1.02 to deliver
Pattison added: “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.”
The Plimsoll Analysis
Is also available in online format, provides an individual profile of each of the UK’s top 711 Wines & Spirits Wholesalers companies. It offers an overall financial rating, a valuation as well as an acquisition attractiveness assessment on each company.
For more information on the Wines & Spirits Wholesalers report or any of Plimsoll’s titles, please contact Chris Glancey on 01642 626 419 or alternatively email c.glancey@plimsoll.co.uk
Readers of this article are entitled to a £50 discount off this report by calling 01642 626419 and quoting reference PR/DR96.