top 200 companies hertfordshire limited 2016 investing for...

Hertfordshire Limited 2016 Investing for growth

TOP 200 COMPANIES

Cambridgeshire Limited 2015 Accelerating profitable growth | Top 100 companies 1

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As the new Chair of Hertfordshire Local Enterprise Partnership (LEP) I am proud to be leading an

organisation which is focused on business-accelerated growth, and to be a champion for the county’s

future economic success.

Foreword

This annual Hertfordshire Limited report is an excellent

bellwether to measure local business health. Grant

Thornton is to be congratulated on collating such an

important piece of analysis.

As the facts here can attest, the Hertfordshire

entrepreneurial spirit is alive and well as evidenced by

robust growth in profits, job creation and remuneration.

This is most encouraging for future success. The details

afforded by this Hertfordshire Limited report allow the

opportunity to celebrate success and strengths, and

equally, to mark areas of potential challenge, all of which

are vital to the LEP’s mandate of ensuring that the

business voice remains at the heart of our work.

Hertfordshire has substantial assets and great potential,

which is why we state that it is Perfectly Placed for Business. Our proximity to London, a truly global city,

brings opportunities and risks in equal measure. We have

outstanding credentials in relation to film and TV

production; sustainable construction; life sciences; agri-

tech; and advanced engineering/manufacturing. In

addition, we define the geographical core of the UK’s

Golden Triangle, which is known around the world for

its truly outstanding science.

In themselves, these assets bring great opportunities but

no guarantees. It is crucial that we realise these

opportunities for the long-term benefit of the people of

Hertfordshire, particularly given the uncertainties

surrounding Brexit and world economic prospects.

This is the reason why the nearly £300 million funding

that the Hertfordshire LEP has secured to date is being

directed at key areas where we can make a tangible

difference to business:

• helping your employees get to their place of work

via improved road and rail connectivity and better

broadband communications

• creating healthy and prosperous town centres

with rejuvenation programmes in places such as

Hatfield, Watford and Stevenage

• building lasting connections between schools and

businesses by investing in the skillsets of school

leavers to meet local employers’ needs with our

Careers and Enterprise Company, Skillmakers and

Apprenticeships Ambassador Network programmes

• accelerating R&D for commercial success by

investing in science-led incubation centres such as

Rothamsted Research and the new University of

Hertfordshire Knowledge and Science Innovation

Hub as well as supporting the Building Research

Establishment

• unlocking new growth and job creation with our

commitment to a Growth Hub offering free impartial

advice, grants and loans to established businesses with

high growth potential; and we are investing in start-up

support

• encouraging new inward investment with the

creation of a new Enterprise Zone; supporting key

sectors to thrive, and growing the visitor economy

with Visit Herts.

We are fully committed to unlocking the full potential of

the talent of the people and businesses of Hertfordshire

and we look forward to working with a wide range of

partners to help make this a reality.

Mark Bretton

Hertfordshire LEP Chair

5

About Hertfordshire Limited

Hertfordshire Limited is part of an annual series of

detailed business analysis by county compiled by Grant

Thornton. This report and the benchmarks it highlights

have already become a key event in the county's business

calendar.

How Hertfordshire Limited is compiled

Hertfordshire Limited is a study of the county's 200

largest privately owned companies, based on turnover,

who have their principal trading address in Hertfordshire.

The population excludes companies that are listed or

owned by listed or overseas businesses, or by larger

corporates located outside of the region.

The report is compiled using the most recent publicly

available financial statements and the results are derived

from the current and previous year's financial

performance of the 200 constituent members (the

Hertfordshire 200) to allow a year on year comparison.

The aim of this analysis is to provide a yardstick against

which the county can assess its economic performance

and businesses can benchmark themselves against their

peers.

Welcome to Hertfordshire Limited 2016 – Grant Thornton's unique insight into the performance of

the Hertfordshire business community.

Inevitably there is a time delay between the availability of

the data used and the presentation of this report. The

report gives a fascinating insight into how Hertfordshire

has performed during these changing times and provides

a snapshot of the county's economy as businesses in

Hertfordshire respond to the challenges that lie ahead.

Following analysis of the 200 companies, eight sectors

were identified to form the basis of this report.

• Automotive and Motor Retail

• Business Support Services

• Food, Drink and Leisure

• Healthcare and Education

• Industrial and Manufacturing

• Property and Construction

• Retail and Wholesale

• Technology

5

6

Findings - Headline results

The companies in our report, which this year range in

turnover from just over £15m to £1.3bn, have posted a

healthy increase in sales of 12.3% but seen a slight

softening in net profit margins as EBITDA rises by 9.6%.

More strikingly, following a few years focused on paying

down debt, we have seen a significant rise in interest

costs, with gearing rising by almost 5%.

Once again, the Hertfordshire 200, has delivered healthy

employment growth, with the county’s largest private

businesses employing almost 103,000 people across the

UK. More significantly, average remuneration has risen

by 3.4% (compared to the 1.7% rise recorded in last years

findings) This suggests that the tightening labour market

(which we anecdotally highlighted in 2015) has started to

feed through to real terms wage inflation. This has been a

pronounced feature of a number of sectors, implying that

skills shortages are starting to be impact financial

performance.

A review of the consolidated balance sheet data suggests

that most of the increased debt has been deployed in

investment in fixed assets which have risen by 4.6%.

Conversely, the key working capital metrics of net current

assets, debtor days and stock turnover all demonstrate a

net improvement in performance in this area, with large

corporates in particular delivering a strong performance

in cash generation.

Whilst the investment trends identified are evident across

both large corporates and SMEs, the rise in fixed assets

and working capital improvements are most evident

amongst larger businesses who have demonstrated a

particularly strong performance in cash generation

through focused working capital management.

Another interesting feature of this years report is the fall

in cost capital experienced by the SME sector, which is in

line with improved security ratios and suggests that a

relatively competitive banking market is responding to the

underlying quality of the business when pricing debt.

Conversely, larger corporates have seen an increase in

their borrowing costs, reflecting the negative movements

on key metrics such as gearing and interest cover.

Once again the Hertfordshire 200 has delivered a positive statement for the business community in the

county, posting a healthy rise in turnover, profitability and employment. This does not tell the whole

story however, as there is a discernible shift in some other metrics which paint a picture of an economy

which has re-engaged in investment activity and is seeing a real terms increase in wages for the first time

for some years.

Results Summary CY £000 PY £000 Variance %

Turnover 15,382,815 13,694,370 12.3%

EBITDA 1,251,574 1,141,827 9.6%

Interest payable 162,230 135,153 20.0%

Average cost of capital 3.9% 3.7% 7.4%

Interest cover 7.71 8.45 -8.7%

Gearing 1.13 1.08 4.5%

Total Employees 102,971 97,343 5.8%

Total employee remuneration 2,680,090 2,450,982 9.3%

Average remuneration (£) 26,028 25,179 3.4%

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Balance Sheet Summary CY £000 PY £000 Variance %

Fixed Assets 5,009,347 4,788,512 4.6%

Current assets 5,817,676 5,018,573 15.9%

Current liabilities 4,289,643 3,328,950 28.9%

Net current assets 1,528,033 1,689,623 -9.6%

Total Equity 3,671,071 3,432,921 6.9%

Total Debt 4,132,162 3,698,888 11.7%

Average Stock turnover days 68 67 1.0%

Debtor days 48 51 -6.1%

Cash 1,140,452 926,210 23.1%

Large CY £000 PY £000 Variance % SMEs CY £000 PY £000 Variance %

Turnover 11,975,272 10,564,734 13.4% Turnover 3,407,543 3,129,636 8.9%

EBITDA 962,161 869,493 10.7% EBITDA 289,413 272,334 6.3%

Interest payable 140,659 110,948 26.8% Interest payable 21,571 24,205 -10.9%

Average cost of

capital 4.0% 3.5% 12.0%

Average cost of

capital 3.6% 4.2% -13.8%

Interest cover 6.84 7.84 -12.7% Interest cover 13.42 11.25 19.2%

Gearing 1.38 1.31 5.5% Gearing 0.53 0.55 -2.6%

Fixed Assets 3,874,021 3,681,914 5.2% Fixed Assets 1,135,326 1,106,598 2.6%

Current assets 4,404,033 3,762,055 17.1% Current assets 1,413,643 1,256,518 12.5%

Current liabilities 3,322,115 2,502,531 32.8% Current liabilities 967,528 826,419 17.1%

Net current assets 1,081,918 1,259,524 -14.1% Net current assets 446,115 430,099 3.7%

Total Equity 2,563,983 2,389,101 7.3% Total Equity 1,107,088 1,043,820 6.1%

Total Debt 3,540,246 3,126,193 13.2% Total Debt 591,916 572,695 3.4%

Average Stock

turnover 74 54 36.1%

Average Stock

turnover 65 73 -11.3%

Debtor days 37 40 -5.6% Debtor days 52 56 -6.2%

Cash 771,797 611,733 26.2% Cash 368,655 314,477 17.2%

Large corporates have turnover more than £50m for the purpose of this

analysis

SMEs are businesses with turnover less than £50m for the purpose of

this analysis

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8

T

Overview of the Hertfordshire 200

117 30

Turnover range:

<£20m £20m – £100m

53

sectors by turnover

Food, Drink and Leisure

Property and Construction

Business Support Services

of the Top 200

companies

increased

EBITDA

1

2

3

increase in turnover >£100m

Turnover

£15.4bn

xx%

144 of

Top 200

companies

increased

revenue

TOP 3

131

9.6% Increase in EBITDA

TOP 5 sectors by number of companies

Food, Drink and

Leisure

Business Support

Services

Retail and

Wholesale

Healthcare and

Education

Property and

Construction

EBITDA

£1.2bn

8

9

Watford

(22)

xx

Location of Top 100 St Albans

(19)

Hertford (18)

Stevenage (13)

Borehamwood (13)

Other (103)

LARGE CORP

13.4%

SME

EBITDA increase

6.3%

LARGE CORP

EBITDA increase

10.7%

Average Remuneration

SME

8.9%

£26,028

3.4%

TURNOVER

GROWTH XX

Employment

102,971

employees

64 Large

Corporates*

*Large corporates are companies

with a turnover greater than £50m

Large corporate debt

increase 13.2%

SME debt increase

3.4%

Hemel Hempstead (12)

9

Average Remuneration increase

10

Turnover

increase

69.2%

Total number

of companies

Turnover

Total number

of employees: 2,855

EBITDA

£78m

EBITDA

increase

63.4%

Average

Remuneration £27,629

Average

Remuneration

per employee

increase by

The UK new car market continues to go

from strength to strength with new car

registrations up 2.5% year on year and

used car sales up 7.9%. The key driver for

the exceptional growth in this sector

however, is the rapid expansion through

acquisition of St Albans based Motor

Fuel Group, the second largest independent

forecourt operator in the UK.

12

£

£1.7bn

Automotive

11

Business Support Services

Total number

of companies

Turnover

increase

30,029

£23,600

8.6%

decrease in

fixed assets

11.9%

EBITDA

39

EBITDA

increase 8.6%

Average

Remuneration

Turnover

£2.5bn

This sector makes up just under one fifth of the Top 200

population; the second largest in the report. It has seen

an 8.6% increase in turnover, with a corresponding

improvement in EBITDA and an increased average

remuneration of 5%, driven by a rise in employment of

just over 10%. This is a relatively well diversified sector

encompassing recruitment, facilities management and

other support services, that has performed well in

maintaining margins despite a significant real terms

increase in wage costs.

£170m

Average Remuneration

increase by 5.6%

11

12

Turnover increase

2.0%

40 Total number

of companies

Turnover

Average

Remuneration

EBITDA

EBITDA

decrease 5.1%

This sector, encompassing food manufacture, hospitality

and tourism is the largest within our report,

representing 27% of total turnover, and has delivered

a mixed set of results with a small rise in turnover

being offset by a fall in EBITDA as labour costs rise

in real terms and margins come under some pressure.

£21,539

£4.1bn

Sector

Gearing

1.32

Average

Remuneration

increase 2.5%

Food, Drink & Leisure

13

Total number

of companies

EBITDA

£73m

Turnover

decrease

EBITDA

decrease

20.1%

£793m

It has been a difficult year in Social Care with the

introduction of the National Living Wage and

uncertainty over public sector funding. This

challenging landscape is evident in the drop in

turnover and significant margin pressure

underpinned by a relatively large rise average

remuneration.

Debt increased by

6.4%

5.2%

21

Turnover

Total number of

employees

11,960 Average

Remuneration

increased by

4.1%

Healthcare and Education

13

14

EBITDA

decrease

Remuneration

increase

Industrial and Manufacturing has seen a turnover

increase of 3.8%. Significant employment growth

and pressures in the labour market have seen a

real terms increase in average remuneration of

4.2% which has subdued EBITDA performance.

3,123

Total number

of employees

Total number

of companies

EBITDA

Employee growth

19

£42m

£485m

7.2%

£33,373

Average

Remuneration

Turnover

0.3%

Industrial and Manufacturing

15

The sector, which remains an important feature of the

Herts economy, has had a strong year with a significant

increase in turnover and an impressive rise in

EBITDA, notwithstanding wage inflation of over

10%, fuelled by the shortage of skilled labour in the

industry.

Property and Construction

Turnover

increase

Average

remuneration

Fixed assets

Turnover

16.3%

Total number of

employees

£291m EBITDA

17,257

£33,054

42% EBITDA

increase

£828m

Total number

of companies

37

£3.9bn

Employee growth

9.2%

%

15

16

Consumer spending has continued to fuel an

impressive growth in both turnover and

EBITDA and has also driven an increase in

employment of almost 5% with a corresponding

rise in average remuneration of 4.7%.

Retail and Wholesale

Employee growth 4.5%

£1.1bn

Turnover

increase

Total

number of

employees

6,222

8.8%

Total debt increase

2.2%

EBITDA

increase

8.9%

EB

ITD

A

£203m

21 Total number

of companies

24hr

Average

Remuneration

£30,312

Tu

rno

ve

r

17

Total number

of companies

EBITDA

increase

Employment increase

7.8%

11

Average

remuneration

£51,295

EBITDA

£39m

Total number of

employees

Tu

rno

ve

r

£152m

1,8

83

Technology

Remuneration

increase

5%

Turnover

increase

12.6% 0.9%

£5

21

m

Turnover growth in this sector has not been

translated to increased profitability as a

significant rise in employment and average

remuneration has impacted the cost base . The

Technology sector has the highest average

remuneration of £51,295.

17

18

Vibrant Economy Index

Prosperity Dynamism and

Opportunity

Inclusion, and

equality

Health, well being

and happiness

Resilience and

sustainability

Community, trust and

belonging

We have an economy

that is producing

wealth and creating

jobs.

Our economy is

entrepreneurial and

innovative, with a skill

set that can drive

future growth.

Everyone benefits

from economic growth.

The gap between

richest and poorest

narrows, regional

disparities reduce, and

there are opportunities

for all.

People are healthy

and active, leading

fulfilling lives which

provides individual

prospects.

Our economy has a

neutral impact on the

natural environment

and our built

environments are

resilient places we

want to live in.

Vibrant communities

have a lively and creative

cultural life, and a clear

identity that all its people

are proud of. People feel

safe, engage in

community activities and

trust the integrity of

businesses and

institutions.

Indicators:

• Total GVA (£m)

• GVA per job (£000)

• Mean workplace

weekly pay (£)

• Knowledge-driven

employment (%)

• Businesses turning

over >£1 million (%)

• Businesses turning

over >£100 million

(%)

• Foreign owned

businesses (%)

Indicators:

• Business formation

rate (%)

• High level skills (%)

• Knowledge workers

(%)

• Patents granted

(per 100,000 pop)

• GCSEs A*-C

achieved (%)

• Higher education

employment (%)

• R&D employment

(%)

Indicators:

• Deprivation (score)

• Inequality (score)

• Average income (£)

• Child poverty

(score)

• Housing affordability

(score)

• Employment rate

(%)

• Benefit claimant

rate (%)

• Homeless

households (per

000 households)

• NEETs (%)

• Housing benefit

claimant rate (% of

all households)

• Long-term

unemployment (%)

• Fuel poor

households (%)

• Unemployed

inequality (ethnicity)

Indicators:

• Sports participation

(adults) (%)

• Adults overweight or

obese (%)

• Life satisfaction

(score)

• Life worthwhile

(score)

• Happiness (score)

• Anxiety (score)

• Diabetes prevalence

(%)

• Average life

expectancy (yrs)

• Child obesity (Year

6) (%)

• Mean hours worked

differential

Indicators:

• Air quality (score)

• Recycling rate (%)

• Co2 emissions per

capita (Kt Co2)

• Energy consumption

(GWh)

• New residential

addresses created

in National Flood

Zone (%)

• Previously

developed land

usage (addresses

per ha)

• Dwellings

completed (no.)

• Households on LA

waiting list (%)

• Planning

applications (no.)

Indicators:

• Community assets

(per 1,000 pop)

• Cultural amenities (per

ha)

• Living alone, aged

over 50 and over (%)

• Valid voter turnout (%)

• Violent crimes (per

1,000 pop)

• Ethnic diversity (score)

We believe that our economy should benefit society as a whole, taking into account not only financial

growth and economic returns within an area, but also a wider set of characteristics. Our Vibrant

Economy Index measures the current position in 324 English local authority areas across six baskets

of socio-economic indicators, to provide an indication of the vibrancy of the area.

19

Hertfordshire Scorecard

Prosperity

Dynamism and

Opportunity

Inclusion, and

equality

Health, well

being and

happiness

Resilience and

sustainability

Community,

trust and

belonging

Vibrant

Economy

Index

Broxbourne 74 132 134 112 242 195 133

Dacorum 63 208 57 94 69 124 77

East Herts 183 85 16 79 26 53 43

Hertsmere 37 103 60 126 129 51 55

North Herts 112 74 44 51 149 30 49

St Albans 104 53 18 1 153 8 11

Stevenage 54 120 164 232 277 164 180

Three Rivers 61 173 49 110 184 113 92

Watford 25 244 83 88 270 91 101

Welwyn

Hatfield

35 8 132 115 181 131 31

Average of

county 75 120 76 101 168 96 77

Comment The lack of a strong correlation between prosperity and

the other baskets suggests that focusing solely on

improving a place’s economic performance will not

necessarily have a meaningful impact on improving

performance in other baskets, or filter through quickly

enough to the most excluded. This multidimensional

nature of vibrancy means that local areas need to consider

which element/s are most important to them to change.

In an age of austerity, there is no doubt that local place-

shaping will be best managed by localities themselves

determining what is important to them and devolution

offers an opportunity for this to happen faster. Creating

vibrant societies isn’t simple, and as we’ve seen recently,

policies to increase growth don’t necessarily translate into

societies that feel they are making progress. Creating

economic and societal change where businesses,

communities and people can thrive, needs the public,

not for profit and business communities to be united, if

the vision for growth is to be more sustainable and

widely shared.

In the context of the 324 local authority areas, the

performance of the Hertfordshire area is positive, with

an average Vibrant Economy Index across its ten local

authorities that places it in the top quartile in England. St

Albans is ranked the 11th most vibrant economy in

England, with Welwyn and Hatfield also in the top 10%.

North Herts, East Herts and Hertsmere perform

consistently well across many of the baskets. We look

forward to assessing in the future how the focus on

rejuvenation in Stevenage and Watford by the

Hertfordshire LEP improve the vibrancy of those

locations.

19

20

The 'ones to watch'

As part of our analyses, we have identified a number of exciting growth businesses that are currently

outside the Hertfordshire 200. The 25 companies below stand out to us, as having the potential to

join the Top 200 in future years.

Company

Birkin Cleaning Services Limited

Brandt Kitchens Limited

Chameleon Information Management

Services Limited

D.W. Windsor Limited

Dysk PLC

G.B. Kent & Sons plc

G.T. Towing Limited

GC Project Management Limited

Glanville Consultants Limited

Heverin Haulage Limited

Hfis plc

Itri Limited

Company

Kain Knight Limited

Lightning Packaging Supplies Limited

Limelight Sports Group Limited

M.H. Goldsmith & Sons Limited

Oakman Inns And Restaurants Limited

Pakex (UK) plc

PCC plc

PMC Soil Solutions Limited

Stanmore Implants Worldwide Limited

Total Construction Limited

Veruth Holdings Limited

Verex Group Limited

Wilden Services Limited

20

21

• UK member firm of Grant Thornton

International Limited

• 26 offices nationwide

• £521m turnover

• Services over 40,000 individuals privately

held businesses and public interest entities

• 185 partners and 4,500 people

• Winner of the Accountancy Firm of the

Year – Larger clients – 2016 (FD

Excellence Awards)

• 42% FTSE 100 are non-audit clients

About Grant Thornton

Grant Thornton is one of the world’s leading organisations of independent assurance,

tax and advisory firms.

More than 42,000 Grant Thornton people, across over

130 countries, are focused on making a difference to

clients, colleagues and the communities in which we live

and work. The UK Grant Thornton member firm

provides services to over 40,000 privately held

businesses, public interest entities and individuals.

It is led by 185 partners and employs more than 4,500 of

the profession's brightest minds.

Grant Thornton International Limited

These firms help dynamic organisations unlock their

potential for growth by providing meaningful, forward-

thinking advice. Proactive teams, led by approachable

partners in these firms, use insights, experience and

instinct to understand complex issues for privately owned,

publicly listed and public sector clients and help them to

find solutions.

Grant Thornton UK LLP

• Fastest growing of world's six largest

accounting organisations

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• World's most attractive employer s

(Universum 2015)

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brand, global values – consistent

global service

• Winner of Global Firm of the Year –

2015 (The British Accountancy

Awards)

21

22

St Albans client space - Work, Connect, Collaborate

If you imagine part executive business lounge, part

collaboration suite and a dedicated, changing event

space…with good coffee thrown in - you won’t be far

wrong.

Our client space in St Albans is the perfect place to:

Work differently:

• An innovative space for our clients, contacts and the

local business community

• A creative and dynamic environment helping to

promote agile working

• Hold strategic board level discussions in our dedicated

‘CEO Room’

• 30 seat theatre/presentation room

• Our café and kitchen seats 10 - 12 and caffeinates

thousands

• Standing desks, sound insulating meeting booths,

write on our glass walls

• Wi-Fi with no pesky dead spots

• We even have printers…if you just have to print!

Connect:

• Meet other businesses and local business people

• Share ideas and problem solve

• Regular, thought provoking events that you won’t

want to cancel

Collaborate with others:

• Need help? - we may know someone who can

• Co-create projects with like-minded people

• Meet new businesses every time you come in

• You may bump into a few Grant Thornton people

too!

To come in and see us contact:

Laura Bailey

T: 01727 221233

E: [email protected]

@StAlbans_Herts

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