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Nine food firms make UK list of Top 10 privately owned companies

03 April 2012

On 5 April, Real Business and Investec will publish their analysis of the UK’s fastest growing 100 mid-sized private companies1, and nine of them are from the food and drink sector

The list, compiled from data filed at Companies House, reveals that the companies that make up the Investec Hot 100 have collectively achieved an average compound growth rate of 44% over the past four years and an average turnover of £150 million in their last financial year.

The corresponding figures for the nine companies in the food sector in the Investec Hot 100 are 34% and £60 million. The UK’s fastest growing company1 is Alternergy, which operates in the solar power industry. It is one of the principal wholesale/distribution companies in the sector and has a compound annual growth rate of 130%.

The Investec Hot 100 companies are spread across the UK and different sectors, but the research has identified three key factors behind their success. First, many operate in a defensive sector such as discount retailing and bridging loans, which works well when cash is restricted.

The second key factor is conducting work that big companies and the public sector can’t, won’t or shouldn’t do any more. The third factor is having an international focus based around proprietary and/or disruptive technology.

Between them, the Investec Hot 100 companies represent over 14 different sectors, with 16 companies in IT, software and telecoms, and financial and professional services while 13 are in the outsourcing and care services and ten are in energy, gold and commodities.

Nicola Mallard, consumer goods analyst at Investec, said: “The nine food and drink companies in the Investec Hot 100 are fairly diverse in nature, but would clearly fit in the “defensive” category. However, even expenditure on food and drink has come under pressure in this latest consumer downturn so it is all the more encouraging to see such strong growth from these businesses.”

Matthew Rock, founder-editor of Real Business, said: "Real Business has published the Hot 100 for the past 15 years, and the 2012 report is one of the most revealing insights ever into the high-performance mid-sized companies that are so critical to Britain's economic prosperity.

"The big lesson from this year's research is that, even in a tough climate, Hot 100 companies stay relevant. They adapt to the dramatic social, demographic and technology changes that are reshaping our world. As one market declines, they possess the high-energy leadership and finely tuned antennae to shift decisively into new growth areas."

Positive outlook
Research2 amongst 24 of the Hot 100 companies reveals that they are extremely positive about the future. 71% expect ‘significant’ improvement in their business prospects and 75% anticipate a slight or significant improvement in their operating profits. When asked which sources of finance they would draw on over the next 12 months, 75% said ‘retained earnings’. 17% intend to raise external equity finance.

Some 77% plan to target international markets next year, but this is not because they fear about the future of the UK economy – only 17% anticipate that it will have a significant impact on their ability to grow.

In terms of what this sample of the Hot 100 see as the key to their success, there does not appear to be a ‘silver bullet’. The factors most frequently quoted are ‘delivering exceptional customer service’ and ‘innovation’, quoted by one in five (21%). This is closely followed by ‘focus’, ‘investment systems’ and ‘team’, which were quoted by 17% of those interviewed.

Equally there is no great consensus about what would help them grow even faster. Here, the most common factors quoted are ‘access to better skilled staff’ and ‘access to further funding’ – both quoted by a quarter (25%) of respondents. This was closely followed by ‘more capable managers,’ and ‘assistance to enter new overseas markets’, quoted by 21% of those surveyed.

The full report on the UK’s Investec Hot 100 will feature in the Spring issue of Real Business, which will be published on 5th April. It can also be viewed at www.realbusiness.co.uk.


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