Having battened down the hatches since the recession started, Yorkshire’s largest 150 companies have amassed more than £10.4bn cash in the bank, according to analysis from accountancy and business advisory firm BDO LLP in Yorkshire.
Companies’ war chests have increased sharply by 22% on last year’s figures, with cash reserves now at their highest level since records began in 2007, providing a sure fire signal that M&A activity could flourish over the next few years.
Yorkshire’s biggest businesses have also boosted growth prospects by increasing investment by a further £500m, taking total investment expenditure in property, plant and machinery to almost £3.5bn in the reporting period.
The analysis comes from the BDO Yorkshire Report 2014, now in its eighth year, which compiles the latest published accounts from Yorkshire’s largest 150 businesses based on revenue, analysing trends and acting as a barometer of health for the region.
The report found that the top 150 saw revenues increase to £90.7bn, from £88.7bn last year and £83.8bn the year previous.
Operating profits increased by five per cent to £4.56bn and a more focused effort on overseas markets saw international sales grow by £1.7bn, up 7.7 per cent to more than £12bn.
Terry Jones, partner and head of BDO LLP in Yorkshire, said:
“There is an overwhelming feeling of confidence across the region and the figures in this year’s report confirm that growth is firmly back on the agenda.
“Having built up cash reserves during the last few years, the challenge now is for management teams – many of which may not have the experience in dealing with a ‘positive’ cash crisis – to have the confidence and expertise to choose where to invest.
“It’s a challenging prospect having spent the last four to five year’s heads down firefighting, but businesses must look forward and seize the opportunities a recovering market presents.
“This year’s success stories will come from those brave enough to invest three-fold; in talent, technology and international markets.”
Yorkshire’s heartland in manufacturing is proving particularly resilient and increasingly important to the region.
The number of manufacturers in the top 150 rose to 34 (from 31 last year), generating more than £10bn in revenue (£1bn more than last year).
Newcomers to the list include retailer Mamas & Papas, bus operator First West Yorkshire, clothing manufacturer John Cotton Group, Bradford-based AIT Travel and Weber-Stephen Products, the importer and wholesaler of barbecues.
The BDO report finds that West Yorkshire accounts for more than half of the 150 entries, followed by South Yorkshire (21 per cent), East Yorkshire (14 per cent) and North Yorkshire (13 per cent).
Leeds is the most represented city with 32 of the region’s biggest businesses headquartered there (up from 28 last year), following by Sheffield (19), Bradford (16) and Hull (13).
Mr Jones added:
“The results in this year’s report have set a mood for growth, not only for the biggest companies but for mid market corporates and ambitious businesses across the region.
“The race for growth is being won by those that can continue to adapt in an upbeat but constantly evolving market.
“Yorkshire is fast becoming a talent-based economy, driven largely by innovation, technology and a less risk adverse approach to investment and growth.
“We can take huge pride in the strides we made so far, and should be encouraged by the opportunities the future presents.”