Hertfordshire businesses have remained resilient with turnover and profitability holding steady and a strong increase in employment despite increased economic and political uncertainty, according to a new report published today.
The Hertfordshire Limited study, conducted by financial and business advisers Grant Thornton each year, analyses the performance of the 200 largest, privately owned companies in the county to provide a recognised barometer of the overall health of the local economy.
The 2017 report findings, unveiled today to more than 100 local businesses at a breakfast briefing hosted by Grant Thornton, revealed that combined turnover of the top 200 companies rose by 1.4% to £15.6bn. Profits (measured by EBITDA – Earnings before interest, tax, depreciation and amortisation) followed a similar trend, up 1% to £1.26bn, with the large majority of companies (182) posting profits.
Positively, the top 200 businesses continued to invest heavily in new staff with a significant 9.8% increase in employment to 113,039 people. Business Support Services was the largest employer at 35,403 people, up 17.9%, whilst Retail & Wholesale saw the largest increase in jobs, up 135.4% to 14,645 people. However, this encouraging picture was offset by a 4.2% fall in average remuneration to £24,936 (national average £26,700), mirroring national trends and suggesting growth has been largely driven by part time or lower paid jobs.
The Hertfordshire Limited study was based on the latest company accounts available and so relates to a period before the triggering of Article 50 and the snap UK general election result.
Steve White from Grant Thornton St Albans who presented the findings, said: “This year’s report findings show a commendable performance by our county’s businesses against a difficult economic backdrop. Whilst growth levels aren’t as strong as those seen in our 2016 report, there has been considerable growth in employment and a rise in fixed assets, albeit by a relatively small 2.2%, indicating a continued willingness to invest for the future.”
The study also showed a strong performance by the county’s small and medium sized businesses (SMEs) which achieved a healthy 9.2% increase in profitability compared to the 1.4% fall posted by larger businesses (turnover greater than £50m). However, turnover for SMEs fell by 2.6% whilst larger businesses delivered a 2.5% rise.
The Hertfordshire Limited report also analyses the performance of the top 200 companies by sector and showed a mixed picture. Half of the eight sectors grew turnover while seven reported an increase in EBITDA. The standout sectors were Retail and Wholesale, which saw the highest increase in turnover of 38% to £1.5bn, and Automotive & Motor Retail which reported profit growth of 35% to £106m, bolstered by strong M&A activity. Food, Drink and Leisure was the largest sector by turnover (£3.96bn) and profit (£370m).
Jeremy Read, also from Grant Thornton St Albans, concluded: “Hertfordshire businesses have outperformed the UK growth rate of 0.4% and are well placed to weather the more challenging conditions we are seeing. Employers continue to be drawn to the region by its strong workforce. The long talked about skills gap is also decreasing in the county with
businesses finding it easier to fill vacancies compared to 2015. This will help lay a solid foundation for future economic prosperity.”
The findings were presented at The Old Palace, Hatfield House and this year included guest speaker Will Hobhouse, the High Sheriff of Hertfordshire.
For a full copy of the Hertfordshire Limited report, please contact laura.j.bailey@uk.gt.com.
