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Brittelstand beats Mittelstand in race for growth

18 April 2017

  • Annual turnover growth of UK mid-sized businesses out performs that of German, French, Spanish and Italian medium-sized firms.
  • UK mid-sized firms generate more profit than the mid-sized firms of leading European economies but French profit growth outstrips UK

British mid-sized businesses have shrugged off Brexit uncertainty by growing faster than their German, French, Spanish and Italian counterparts over the last 12 months, according to new research published by accountants and advisers, BDO.

The research reveals that UK mid-sized businesses grew turnover by nearly 4% in one year to £1.2tn. This compared to a 1% increase in turnover to £1.4tn for the equivalent German firms – the country whose mid-sized businesses generate the most revenue.

Spain’s mid-sized businesses grew turnover by 0.63% to £570m.   Italian mid-sized firms saw a contraction in revenue growth of -1% to £911m while growth for the equivalent businesses in France stayed flat with a contraction of -0.01% to £1tn.   

The longer term trend tells a similar story. Over the last five years the UK’s mid-sized businesses have grown their revenues by 34.7% just a shade ahead of Germany at 34.6%.  The equivalent businesses of France, Italy and Spain grew revenues 20%, 16% and 12% respectively over the last five years.

British mid-sized businesses are also the most profitable across the top five EU economies generating profits of £97bn (profit growth of 19% in one year) compared to Germany’s £67bn (up 2%), France’s £62bn (25%), Italy’s £35bn (4.7%) and Spain’s £22bn (a contraction of -10%). 

Despite performing well in comparison to its European peers, 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 Brexit negotiations begin.  

BDO has set out twenty-two policies which it thinks will put the UK’s economic engine at the centre of a ‘new economy’ which will thrive post Brexit.  It’s ‘New Economy’ report calls for a radical simplification of the UK tax structure (aligning Income Tax with National Insurance and a moratorium until 2020 on any new tax changes unless they simplify the system) and for investment in smaller ‘shovel-ready’ infrastructure projects.

Paul Eagland, Managing Partner at BDO, said:

“High-performing and entrepreneurially-spirited mid-sized businesses are the economic engine of UK 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 much uncertainty ahead with Brexit negotiations, advancements in technology and regulatory changes, it is crucial that the Government factors the needs of these mid-sized businesses into their policy thinking”.

BDO’s New Economy report can be downloaded here.

As well as campaigning for future policies to help entrepreneurial mid-sized businesses we are also offering the practical expertise to help businesses now.   

BDO’s ‘Business in the UK - A Route Map’ – is a guide intended to provide advice and information to business owners just starting out in the UK or more established businesses looking to invest here – those looking to enter the UK market and those expanding their presence here.  The guide explains all businesses need to know about investing in the UK.  The guide provides links to key sources. It includes an introduction to the UK as a location to invest, its key sectors, infrastructure and skills; advice on the choice of business structure; setting up a business in the UK; business finance and key regulatory requirements and more. It can be accessed here:

Summary of key research

 

Turnover (£)

1 year turnover increase

Five year turnover increase

Profit (£)

1 year profit increase

UK

£1.25tn

3.83%

34.78%

£97.68bn

19.09%

France

£1.06tn

-0.01%

20.39%

£62.20bn

25.43%

Spain

£574bn

0.63%

11.7%

£22.16bn

-10.13%

Italy

£911bn

-1.35%

15.5%

£35.75bn

4.72%

Germany

£1.48tn

0.99%

34.61%

£67,45bn

2.31%

- Ends –

Note to editors

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 International

The BDO International 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. 

Methodological notes

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

Mid-sized companies for each country were classed as being either (i) mid-market businesses (with a revenue of between £10m and £300m) (ii) AIM-listed businesses (or the equivalent leading secondary market in each country) and (iii) private-equity owned businesses. 

The secondary market chosen for each country is:

  • UK: AIM
  • France: AlterNext
  • Spain: Alternativo Bursatil
  • Italy: AIM Italia
  • Germany: Market Max

Contacts

Elliott Grady
Head of External Communications, BDO

Mob: 07812 666010
Email: [email protected]

http://www.bdo.uk.com/news.html
http://twitter.com/BDOaccountant