Most UK plant engineering companies need new (or better) ownership

London -- Most UK process plant engineering companies would be better off under new ownership, according to a new Plimsoll Publishing report, which also found that: 27% of companies are making a loss; 10% are losing money for the second year running; 4% of companies made less than 3% return on investment.

As many as 180 of the 243 companies covered by the study would make more profit under new ownership, resulting in £1.2bn extra revenue in the industry as a whole, said Plimsoll. That money, it said, is currently being thrown away because of companies’ failure to control losses and manage their businesses more effectively.

These results prove just why the process plant engineering industry is currently hot with takeover talk and speculation about future ownership, according to David Pattison, the senior analyst on the project.

“It’s certainly no surprise that trade buyers and private financiers are taking a close look at the industry – some of these process plant engineering businesses have huge potential that is not being realised at the moment, said Pattison. “We’ve heard a lot about private equity firms recently, and this is one industry where they could reap rich rewards.”

The report, meanwhile, identifies a number of areas for improvement within the industry sector. These include cutting out unprofitable sales and unnecessary stock levels, keeping control of trade debtors and reducing borrowing. More companies should also target productivity to the point where sales per staff member are at least £120,000 -- a key business measure that often goes unchecked, said Plimsoll.