Consultancy and engineering businesses in rude health despite ongoing business challenges, according to the latest European benchmarking study.
Rising revenues, headcounts up and increasing profit margins are three of the key headlines from the latest Benchmarking study conducted for the Association for Consultancy and Engineering, the results of which were announced today.
This is the eighth year in which companies from other European countries have taken part in the benchmarking study and the results paint a positive picture, with firms of all sizes reporting positive numbers for turnover, staff and profits as well as reducing overheads, falling staff turnover and healthy forward order books.
The ACE Benchmarking Report shows an industry in rude health, examining trends and drawing wider conclusions based on the submissions of participating firms.
Key findings from the study include:
- 90% of UK and European firms increased their revenue in the last year and the median growth rate was 7.5%
- Average growth of larger UK firms (over 250 employees) was 10.3%
- 79% of SME firms increased their revenue in the last year
- Total profit of UK and European companies was up 10% on the previous year
- 57% of larger firms reported higher profit margins than last year
- Average profit for large firms went up from 5.8% to 7.4%
- Average profit for SME firms went up from 10.7 to 12.4%
Commenting on the results of the benchmarking survey, ACE chief executive, Dr Nelson Ogunshakin OBE, said: "On the whole, these are very encouraging results for our industry. Turnover is up, staff numbers are increasing and profits are continuing to rise, showing that consultancy and engineering firms are doing well in what has been a very challenging marketplace over the past 12 months.
"However, there will be some concern that year-end debtor days rose for UK firms to 83 days, showing that the issue of late payment still needs to be addressed. This can disproportionately affect SME firms and with 32% of all payments taking longer than stipulated in contract terms, it is something that requires attention by the whole industry."
Future work prospects remain healthy according to the benchmarking results, with year-end order books up by 11% for UK firms showing an equivalent of 9.5 months' work. European firms have an order book of 16.6 months' work.
The 90-page ACE Benchmarking report presents a comprehensive overview of the results of the 2017 benchmarking study and highlights trends across a number of business areas and draws a series of conclusions about the health of the sector. ACE commissioned The Centre for Interfirm Comparison to carry out the survey, who also produced separate confidential reports to each participating firm.