Product category:
Marketing + PR services
News Release from: Plimsoll Publishing | Subject: Portfolio Analysis - Fluid Handling Equipment
Edited by the Processingtalk Editorial
Team on 13 December 2006
Not so Happy New Year for Fluid Handling
suppliers
2006 has been a highly competitive year for the fluid handling equipment industry, and although some companies have been enjoying historically high margins, 2007 promises ever tougher times
2006 has been a highly competitive year for the fluid handling equipment industry, although some companies have been enjoying historically high margins But 2007 promises even tougher times, according to David Pattison, senior analyst with Plimsoll, one of the leading business performance analysts in the UK, France and Japan
This article was originally published on Processingtalk on 1 Jun 2004 at 8.00am (UK)
Related stories
The UK Instruments and Control Devices Market
Catch us if you can! That's the message 166 Instruments and Control Devices companies, the Chasers, will be putting out in 2004 to the rest of the UK Instruments and Control Devices industry
The future for UK fluid handling equipment supply
A study of the UK's leading fluid handling equipment companies has shown that few are fully in control of their overall business strategy
His findings are based on the Plimsoll 'Portfolio Analysis - Fluid Handling Equipment'.
No-one looking at the fluid handling equipment market over the past 12 months could describe it as a comfortable environment.
While growth was a healthy 5%, well above inflation, over two thirds of the of the 920 companies monitored by Plimsoll saw a fall in sales.
Further reading
UK environmental consultants market analysis
About 99% of last year's sales growth went to just 55 firms in the UK environmental consultants industry, according to the market analysis provided by leading industry commentators Plimsoll Publishing
A to Z of ATEX for instrumentation users
The ABB new "ATEX Jargon Buster" provides instrumentation users with a definitive guide to the ATEX Directive, which came into effect on 1st July 2003: send for your free copy today
Safety first and last, the target of IEC61508
ABB's Stuart Nunns and Roger Prew explain the ins and outs of achieving compliance with the IEC61508 standard, as it becomes a requirement for an increasing number of companies
This indicates that much of the growth is being shared by a select band of firms.
The effect has been that the industry has begun heading in a new direction, and the companies which have found themselves lagging behind have been slow to recognise this.
In 2007, this trend is set to continue.
I see growth slowing in the coming 12 months although still above 4%, with the small group of market leaders again capturing the lion's share and the others increasingly playing catch-up.
Overall margins in 2006 were 5%, with some companies enjoying a record 20% or more.
But I believe these margins will be squeezed in 2007, and at least a third of companies in the sector will lose money.
In common with the OECD, I don't see interest rates having a major impact.
This, of course, will have an effect on directors' fees.
Where these increased, it was well above the rate of inflation in 2006, averaging 18% on the previous year.
Things will be tighter between now and next December.
One interesting aspect of the year has been the number of newly appointed directors.
In the past 18 months, 406 have taken up new posts.
If they start to have an impact on company performance in 2007, competition could be even more intense.
Salaries in the industry have risen again, and the average now sits at GBP29600 - up 2% on the previous 12 months.This has largely been productivity driven, with sales per employee increasing from GBP108100 to GBP116300, so it is fair to say staff have earned the extra rewards.
Sadly, however, I think 2007 will see a wave of job losses, forced by modest growth combined with rising costs and, ironically, even better productivity.
I would not be surprised to see as many as 2800 jobs being cut.
Finally, the Plimsoll Portfolio Analysis - Fluid Handling Equipment indicates that a small number of companies have a large amount of cash at their disposal.
This, combined with the small amount of organic growth in the market, will allow some of them to consider acquisitions in 2007.
In the report, I have selected five companies I think will be taken over during the coming year.
The complete Plimsoll publication contains an individual analysis of each of the 920 companies in this sector and sets out their challenges for the next 12 months.
Copies are available from Plimsoll by quoting reference PR 12.
Readers of Processingtalk are offered the special discounted price of GBP300 instead of the usual GBP350.
Next month, Plimsoll will be reporting on their research of the new growth areas of the market.
• Plimsoll Publishing: contact details and other news
• Email this article to a colleague
• Register for the free Processingtalk email newsletter
• Processingtalk Home Page
Search the Pro-Talk network of sites
