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British mid-sized companies boost overseas turnover despite shadow of Brexit

27 March 2017

Mid-sized businesses boost overseas turnover by 50% in last five years while large and small businesses falter.

Critical that Article 50 negotiations consider needs of high-growth entrepreneurial mid-sized businesses say BDO.

Entrepreneurially-spirited mid-sized businesses have been the driving force behind the UK’s overseas turnover in the last five years, according to new research from accountants and advisers BDO, underlining the critical importance of these companies as the UK prepares to leave the EU. 
 
The research reveals that mid-sized businesses have grown international turnover by 50% since 2011 from £84bn to £127bn.  This growth significantly outstrips that of UK FTSE 350 and small businesses, which in fact have fallen 14% (£425bn to £366bn) and 25% (£13.9bn to £10.4bn) respectively.
 
Even throughout a volatile 2016 and with the shadow of Brexit negotiations looming, mid-sized firms remained confident and continued to grow overseas turnover; increasing overseas trade by 7% (from £119bn to £127bn). In comparison, the levels of overseas trade of FTSE350 and small businesses in 2016 fell 30% (from £524bn to £366bn) and 13% (from £12bn to £10.4bn) respectively. 

To ensure that this growth continues, BDO is calling on the Government to place ‘overlooked and undervalued’ mid-sized businesses (what BDO calls the UK economic engine) at the heart of its thinking as it prepares to invoke Article 50 later this month.  
 
While the UK’s economic engine consists of only 30,000 UK companies (1.5% of all UK companies) it contributes one third (£1.2tn) of all UK turnover. Yet despite driving overseas growth and making a significant contribution to domestic markets, the UK economic engine falls into a policy and profile gap: too big to benefit from government initiatives aimed at small firms but too small to win the attention that FTSE firms command from the media and policy makers.
 
In response, BDO has set out twenty-two policies which it thinks will put the UK’s mid-sized businesses at the centre of a ‘new economy’ which will thrive post Brexit.  For example, the ‘New Economy’ report suggests introducing a VAT zero rating on supplies to companies that export once Brexit negotiations are finalised and a call for the UK Government to battle hard for a variant of financial passporting as part of the Article 50 negotiations.  
 
Paul Eagland, Managing Partner at BDO, said:

“High-performing and entrepreneurially-spirited mid-sized businesses are the economic engine of UK international growth. Despite all the uncertainty of the past twelve months these companies have taken calculated investment risks and prospered. The success of these businesses should not be taken for granted and, with Article 50 being invoked in two days’ time, it is crucial that the Government factors the needs of these mid-sized businesses into their thinking ahead of negotiations”.


BDO’s New Economy report can be downloaded here: http://neweconomy.bdo.co.uk/.

Summary of key research

 

Turnover (£)

Turnover (2015)

Oversea Turnover (2011)

Turnover (increase on 2015)

Overseas Turnover (increase on 2011)

Economic engine

£127.81bn

£119.35bn

£84.96bn

6.62%

50.44%

FTSE 350

£366.49bn

£524.1bn

£425.46bn

-30.07%

-13.86%

Small businesses

£10.48bn

£12.06bn

£13.96bn

-13.04%

-24.87

Ends

Note to editors

Methodological notes

Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world. 

Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high growth businesses that fuel the economy.  

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed.  

BDO LLP

BDO LLP operates in 18 offices across the UK, employing 3,500 people offering tax, audit and assurance, and a range of advisory services. BDO LLP has revenues of £405m and is the UK member firm of the BDO International network.

BDO’s global network

The BDO global network provides business advisory services in 158 countries, with 68,000 people working out of 1,400 offices worldwide. It has revenues of $7.6bn.  

BDO’s research is based on an analysis of the FAME database of company information and business intelligence. 

Mid-sized companies were classed as being either (i) mid-market businesses (with a revenue of between £10m and £300m) (ii) AIM-listed businesses and (iii) private-equity owned businesses.  

Large businesses were classified as those on the FTSE 350.

And smaller businesses were classed as having a turnover of less than £10m.

Contacts    

Alexander Dickie or Alisa Charkova at Teneo Blue Rubicon on behalf of BDO LLP

Mob: 07876 287318
Tel:  0207 260 2700
Email: [email protected]