It’s good news for workers in Suffolk – a new report has revealed that the average wage in the county is increasing faster than anywhere else in East Anglia.
According to Grant Thornton’s Suffolk Limited Report, the average annual salaries across Suffolk’s Top 100 businesses have risen by 14%, compared to 11.1%, 4.5% and 4.8% (2018) in Essex, Cambridgeshire and Norfolk respectively.
The Suffolk Limited report is an in-depth, annual health check of the top 100 privately owned businesses in the county. Leading financial and business advisors, Grant Thornton compiled the report in partnership with Birketts LLP, which also revealed that fortunes for local businesses have been mixed over the past 12 months; although turnover has increased, profit has fallen.
Grant Thornton’s findings revealed that turnover is up 7.2% on last year from £5.2bn to £5.6bn, with just under 70% of the Top 100 companies reporting an increase in this area. The largest financial turnover growth came from Maritime Group Limited (3), increasing turnover by just over £50m from £255m to £305m, while Peal Estates Properties Limited (86) saw the biggest percentage increase of 146% to £17.3m.
Employment figures and average wages in the Top 100 have also seen significant growth, implying improved productivity given the increase in turnover. Employment has risen 7.8% to 35,964 and the average wage has increased by a staggering 14% from £24,989 to £28,604.
There have been a number of stellar performances in this year’s Suffolk Limited report, including 13 new entrants to the index. Impressively, Vertas Group Limited (22) has reported revenue growth of 34%, and last year’s new entrant, I&C Holdings Limited (95) has continued to yield impressive results – increasing operating profits by 667% and revenue by 234%.
However, while some companies have performed strongly, others are facing more challenging times. Operating profit has fallen by 2.5% with only 48 companies increasing profits before tax, although it’s thought this could be down to an increase in employment across the county, with an increase in headcount of 7.8% to 35,964.
Rob Thomson, director and East Anglia tax lead at Grant Thornton, commented: “Many Suffolk businesses have quite rightly focused on retaining their talent as well as increasing their workforce which, as we’ve seen, has helped to drive topline growth forward. However, an increased Suffolk Limited headcount and rise in average wages (by 14% to £28,604) has had an impact on profitability.
“Overall, businesses in Suffolk are performing well in an uncertain market and are showing great skill, resource and commitment to deliver dynamic growth. Despite a more mixed performance this year, it is right to celebrate the tremendous achievement of the Suffolk business community in delivering yet another set of solid results.”
This year’s standout sector is Transport and Motor Retail, which continues to have the largest share of turnover amongst the sectors (31.7% or £1.7bn). Turners (Soham) Holdings Limited remains the largest company in the sector and has retained the number one spot in the Top 100 for a second year running thanks to continued growth. It has also increased revenue by 4.5% and operating profit by 4.3%, with both exceeding the sector average results overall.
The Food and Agriculture sector has seen a tough year with a slight decrease in turnover of 1.2%, a decline in operating profit of 40.6%, and employee numbers dropping by 617 on the prior year. Green Label Foods Limited (12) continues to be the anomaly in the sector with statistics that paint quite a different picture to the average. Their latest filed accounts show sustained turnover growth with revenues of £109m and a healthy operating profit due to strong sales and investing in new products.
Jonathan Agar, CEO at Birketts LLP commented: “This year’s Suffolk Limited has seen a trend in increased gearing across most of the sectors, indicating that the Top 100 are taking advantage of low interest rates. This could signify renewed growth ahead as businesses are using their borrowing power to re-invest in fixed assets.
“However, this is not shown across the board. Gearing in the manufacturing sector is unchanged from 2018, whilst its turnover and operating profit has both declined, resulting in the sector’s shrinking presence in the index.”
The results of this year’s Suffolk Limited report were presented at a breakfast event at Wherstead Park in Ipswich.
A panel discussion at the event focused on productivity and a survey carried out amongst attendees revealed that productivity is beginning to stagnate, with 34% naming skill shortages as the primary barrier for its resistance to improvement. More reassuringly, however, is that 53% of attendees are planning to make significant capital investment over the next 12 months.
Now in its eighteenth year, Suffolk Limited is compiled using the most recent publicly available accounts (as at October 2019) and provides a yardstick against which the county can assess its economic performance. It also offers businesses the opportunity to benchmark themselves against their peers.
To download a copy of the report, visit: https://www.grantthornton.co.uk/en/office-locations/chelmsford/suffolk-limited/