The study warns that a combination of stock piling cash, difficult growth, low interest rates and ageing directors has left 131 companies ripe for acquisition as the sector consolidates, evolves and starts to prosper again.
David Pattison, senior analyst on the project, said: “On one hand, 211 cash rich companies have been stockpiling cash and their problem is that the built up cash could give them a real headache. Low interest rates mean this cash will be sitting idle on the balance sheet and not generating a return. It really needs to be put to good use and an acquisition seems an obvious option.”
Some simple findings from the Plimsoll analysis found that:
Pattison continued: “Then on other hand, 131 businesses in the management consultancy market are showing classic acquisition criteria. They are all declining in financial strength, many have an ageing board and are still privately owned. These companies will need the support of their current owners or investment to ensure they have a future and many have acquisition potential. Given the circumstances, it’s quite possible that perhaps some of the directors will be looking to retire or even consider a sale.”
- Almost 22% of directors will be over 60 by the end of the year
- 211 companies have over £5m of cash on their balance sheet
- 488 firms are still operating as independents
- 49% of organisations did not increase in sales
- One in four companies are running at a loss
- 290 of the 1,000 businesses analysed have seen their debts increase
The Plimsoll analysis, which is also available in an online format, provides an individual profile of each of the UK’s top 1,000 management consultants companies.
It offers an overall financial rating, a valuation as well as an acquisition attractiveness assessment on each company, and helps understand up-and-coming competitors in the market.
For more information on this report or any of Plimsoll’s titles please contact Chris Glancey on 01642 626 419 or alternatively email [email protected]
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