We use cookies to ensure that we give you the best experience on our website. If you continue without changing your settings, we'll assume that you are happy to receive all cookies from this website.
OK
what are cookies?

Research from Wyelands Bank, set up to help small and medium businesses, shows UK mid-sized food and drink manufacturers could be missing out on £35bn in revenues due to insufficient access to finance.

The research of UK mid-sized food and drink manufacturers, turning over £10m to £300m, shows that nearly nine in 10 (87%) are held back because of a lack of finance.

Difficulties raising finance to support their growth have stopped them from winning new contracts and that has stifled new job creation.

Each food and drink firm said that the difficulties raising finance meant they had missed out on an average of £27.4 million in revenues and an average of 20 new contracts. These would have enabled each firm to create 31 new jobs.

These figures suggest that the 2,480 mid-sized food and drink manufacturing businesses in the UK have collectively missed out on 25,300 contracts. These would have created 35,365 jobs and some £35bn in revenues.

The Wyelands Bank research shows that difficulties in raising finance also prevent 67% of food and drink firms from investing in new equipment or technology. Three fifths (59%) have also been held back from entering new markets and nearly half (46%) have been prevented from moving to a new site or premises.

Iain Hunter, CEO of Wyelands Bank, said, “Our research shows that UK mid-sized food and drink manufacturers are not able to grow to their full potential without greater access to finance. But that finance has not been available as traditional banks are too often unable to help.

“Helping mid-sized food and drink businesses unlock growth would help tackle the UK economy’s productivity challenges. Mid-market firms can have a disproportionate effect on growth and job creation, but first they need to be understood as individual businesses.

“It takes time and effort to understand a firm’s specific challenges, and identify how to help them. This must then be underpinned by a range of flexible financial solutions to help shape the right answer.”

The picture across all sectors
When looking at all sectors of mid-sized manufacturers in the UK, the research shows that shows that nine out of ten firms (89%) are held due to a lack of finance. Each of these firms across firm said that the difficulties raising finance meant they had missed out on an average of £20m in revenues and an average of 11 new contracts. These would have enabled each firm to create 10 new jobs.

These figures suggest that the 23,000 mid-sized manufacturing businesses in the UK have collectively missed out on 163 thousand contracts. These would have created 175 thousand jobs and £183bn in revenues.

Iain Hunter, CEO of Wyelands Bank, said, “Wyelands Bank was set up to help mid-sized manufacturing firms address these issues. We focus on getting to know the customers we work with so we can tailor the solution to the specific need.

“Mid-sized manufacturing firms, turning over £10-300 million, are often too big to benefit from the attention that is rightly given by policy makers to small businesses. Yet they are generally not big enough to benefit from the economies of scale of larger firms.”

According to BDO, the business advisory firm, over the past five years businesses this size have delivered revenue growth of 32% and profit growth of 45%. This compares with FTSE350 companies whose revenues have shrunk by 0.6% and whose profits have fallen by 40% in the same period. Over that time, small-business revenues fell by 2% though profits rose by 6%.

BDO also shows that growth in these firms has created more jobs than large and small businesses combined. In the last year mid-market firms created 534,900 new jobs compared with 191,000 by small businesses and a loss of 157,000 by the FTSE350.

(source: Wyelands Bank, image: pixabay)