Winners and losers in process plant engineering

Stockton-on-Tees, UK -- A new analysis of the process plant engineering market, from financial analysts Plimsoll Publishing, offers an answer to the question: Why do some companies fail and others prosper?

The secret to success -- or even survival – lies in having a finely-balanced recipe that includes good margins, low borrowing, responsible management and foresight, said the Stockton-on-Tees-based firm. This, it notes, overrides single factors such as strong sales (see Top 50 table below) or trading environment.

Plimsoll weighs up a range of factors impacting the commercial performance and financial strength of a company, based on four years’ figures. The resulting league table based on 243 leading firms shows 82 companies in a “strong position,” with a pre-tax margin of 10% and another 38 in a “good” sector, on 4% margins. Among the leaders under this analysis are Alfred McAlpine plc, Assystem Group, Vinci plc and WS Atkins.

On the other hand, Plimsoll rates 39 companies as mediocre, on 3%, and lists 51 others in a “caution” category, with minus -1% margins. Another 33 companies are in a “danger” range, on minus 11%, while almost 90% of UK companies currently in receivership were in the lowest two categories in the two years before their demise,

Some “64 of the 82 companies in the strong section are there for the second year running, proving that if you have a solid business where management is in control, you can maintain success irrespective of market conditions. The most successful firms are also largely free of debt, said David Pattison Plimsoll’s senior analyst.

“At the other end of the scale, there is no doubt in my mind that if the pundits are right and the UK market tightens towards the end of the year, then the 33 companies in the danger category will take the brunt of the downturn,” added Pattison

Process plant engineering: Top 50 companies by market share (just one of the success criteria In Plimsoll's analysis)