Businesses in Northamptonshire are beginning to succumb to the pressures of both economic and Brexit uncertainties, a new report has revealed today.
The Northamptonshire Limited report – which is compiled by leading financial and business advisors, Grant Thornton – is an in-depth, annual health check of the top 100 privately owned businesses in the county. The 2019 report revealed that fortunes for local businesses have been mixed over the past 12 months – while some companies have performed strongly, others are facing challenging times.
For the first time, this year’s report has focused on sustainability and Grant Thornton has partnered with the University of Northampton to investigate how businesses in Northamptonshire are reporting on their Corporate Social Responsibility (CSR) activities.
The headline findings show that profits have decreased by 7%, from £344m to £311m, the first time in seven years Northamptonshire Limited has shown a fall in this area.
However, there are some promising signs within the findings. Turnover increased by 6% from £5.34bn to £5.65bn, and there are also strong signs of an appetite for future growth with a net increase in fixed assets of 6.2%, to £1.4bn. Meanwhile, the total number of employees has risen by 2.5% (to a total of 25,616) and average salaries have grown by 4.5% to £35,190.
Mike Hughes, who leads the Advisory team at Grant Thornton’s Northampton office who presented the findings, said: “Businesses in the county are known for their strength and resilience, but the lingering uncertainties over Brexit and current economic challenges seem to have finally taken their toll. Of the 100 firms we looked at, only 51 saw an increase in profits compared to 61 last year and a peak of 73 a couple of years ago, although this is reflective of what we are seeing in other regions.
“That said, it’s not all bad news. There are businesses which have performed incredibly well – 13 of the top 100 saw profit increases of more than 50% and have clearly been able to benefit from the new market conditions. Meanwhile an increase in the number of employees, and a 4.5% average salary increase will help the local economy. Ongoing investment in assets such as plant, equipment and vehicles is also evidence that businesses have confidence in future growth.”
This year Grant Thornton has worked with the University of Northampton to investigate how many businesses within the top 100 are actively undertaking CSR activities and where this effort is focused. While half of companies are reporting CSR activities, 50% are not, which is potentially a missed opportunity for businesses to demonstrate their broader contribution to society.
Mike Hughes said: “Customers, employees and stakeholders are demanding strong credentials in this area. Businesses that demonstrate their commitment to progressing the environmental and social agenda will retain a competitive advantage, which is particularly important in the current challenging economic climate.”
The University of Northampton’s research also showed that of the 50% of businesses who are reporting CSR, only a quarter focus on local issues. Again, this could be another missed opportunity for businesses to connect with their local community and attract and retain employees.
Adrian Pryce, Senior Lecturer in Strategy and International Business who carried out the investigation, said: “There appears to be an opportunity – as well as a growing need – for the county’s leading businesses to engage more with local issues and causes to ensure a healthy community in which to operate, recruit and sell. There are corporate as well community benefits from business taking a more strategic, focused and local approach to its CSR, the potential for which is not being fully captured.”
Now in its seventh year, Northamptonshire Limited gives a unique insight into the performance of the top 100 privately owned businesses in the county. Compiled by using the most recent publicly available accounts (as at September 2019), the report provides a yardstick against which the county can assess its economic performance. It also offers businesses the opportunity to benchmark themselves against their peers.
This year’s survey encompassed companies with revenues ranging from £13m to more than £600m, and the findings were presented at a breakfast event at the Northampton Saints Rugby Club. Speakers included Mike Hughes, director at Grant Thornton’s Northampton office, and Adrian Pryce from the University of Northampton.