The UK’s entrepreneurially spirited mid-sized businesses have proven more resilient to Brexit uncertainty compared to their large and small counterparts, according to new figures published today by accountancy and business advisory firm, BDO LLP.
Data collected twelve months on from the EU referendum shows mid-sized businesses have increased overseas turnover by 11% (from £122bn to £135bn). By comparison, large and small businesses saw a contraction in overseas turnover (-2% from £380bn to £371bn and -11% from £12bn to £11bn respectively).
These mid-sized businesses – which BDO refers to as the ‘UK economic engine’ and which are typically made up from mid-market, AIM-listed and private-equity owned businesses – also led the way in terms of reported profit growth twelve months on from the referendum.
Looking at a snapshot of reported financial figures in July 2017, the UK economic engine increased profits of 22% from £83bn to £103bn, outpacing FTSE 350 firms which experienced contraction of -7% as profits fell from £108bn to £100bn. Small companies saw a smaller profit increase of 14% from £15bn to £17bn.
Despite leading the way in overseas turnover and profit growth as well as being responsible for one in four private sector jobs, BDO believes that these entrepreneurial and ambitious mid-sized businesses are overlooked and undervalued by the Government. Too big to benefit from incentives aimed at SMEs and too small to attract the attention that FTSE companies can command, mid-sized businesses fall into a policy gap.
BDO is calling for mid-sized businesses to be placed at the heart of a post-Brexit ‘new economy’ which focuses on regional balance and sustainability. Policies around tax simplification, infrastructure investment and improving access to skills all feature as part of BDO’s New Economy report, and would play a major role in helping the UK’s mid-sized businesses grow and create jobs.
Stuart Lisle, BDO Partner and Chair of the Brexit Taskforce, says: “Mid-market, AIM-listed and private equity owned businesses are the unsung middle of the UK economy.
“Too big to benefit from incentives aimed at SMEs and too small to grab attention like FTSE companies, entrepreneurial mid-sized businesses fall into a policy and profile black hole.
“Yet it is these ambitious businesses that drive the economy and will have a key role to play in the success of the UK’s post-Brexit future.Government must now, more than ever, put the needs of these businesses at the heart of their post-Brexit planning.
“Measures such as creating a simplified tax system, investment in the right infrastructure projects and improving access to skills would all have a major part to play in further boosting the opportunities of our mid-sized businesses helping them create jobs and economic wealth. But it will also help the other sectors to be more successful too”.