Plimsoll, the UK’s leading provider of company and industry-based analysis for over three decades, has developed a model of analysis that identifies strong performance in any company’s financial position. More importantly, it provides early warning to companies, across any market or sector, that are heading for financial difficulty.
Launched in 1987, the Plimsoll Model has proven to be an accurate predictor of company failure. 9 out of 10 previously failed businesses were rated as “Danger” by Plimsoll up to 2 years prior to their ultimate demise. Heeding Plimsoll’s early warning can be the difference between failure and survival.
Plimsoll applies this model to almost half a million companies in more than 1600 individual industry studies. Based on this comprehensive coverage of the UK economy, this quarterly study examines trends in performance and company stability.
From the almost 500,000 companies analysed, 1 in 3 have been rated as “Caution”, or “Danger”. These ratings provide early warning that companies are financially weakened. An injection of shareholder capital or sharp improvements in efficiency is needed to arrest their slide.
The Plimsoll Quarterly Health Check Statement provides some key analysis of where elements of weakness or strength exist. It also shows whether the picture is improving or in decline:
Year-on-year trend in performance
| % in Danger |
|
| Latest year |
34% |
| Previous year |
35% |
There has been a slight fall in the percentage of British businesses that are rated as "danger" by Plimsoll. This would reflect the emergence of the economy from the last of the COVID-19 restrictions and lockdowns.
| % Strong |
|
| Latest year |
50% |
| Previous year |
49% |
The percentage of companies achieving a strong rating has also increased. Further evidence that economic conditions have improved marginally in the latest year.
Performance by region:
Companies in Central London seem to be struggling with balancing commercial success and financial strength. With so much wealth concentrated in the capital and an outsized investment in infrastructure, what causes the capital to perform so badly?
Three of the five regions with the lowest percentage of "danger" rated companies were in Northern Ireland. What can the rest of the country learn from Ulster companies?
| Region |
% in Danger |
| London |
27% |
| Aberdeenshire |
26% |
| Cumbria |
25% |
| South Glamorgan |
25% |
| Oxfordshire |
24% |
| Surrey |
24% |
| West Glamorgan |
24% |
| South Humberside |
24% |
| Lincolnshire |
24% |
| Middlesex |
24% |
Performance by size of company:
The variance in companies rated as Danger by Plimsoll based on size is perhaps the largest shock as we emerged from the pandemic.
Larger companies are the most likely to be financially compromised and at risk of recessionary pressures. Is this why major companies from tech giants to car manufacturers are shedding jobs in 2023?
|
|
% in Danger |
| Less than £1m Assets |
22% |
| £1 - 5m Assets |
20% |
| £5 - 10m Assets |
21% |
| £10 - 50m Assets |
25% |
| Over £50m Assets |
37% |
Further down the economic hierarchy, SMEs appear to be much more stable than their multinational peers. The small business revolution looks set to continue for the foreseeable future.
Plimsoll produces individual studies on more than 160 different markets and hundreds of international industries. Each study provides a Plimsoll Model on each of the leading companies. You will be able to see instantly:
A Plimsoll Analysis is the only tool you need to better understand your competition, your market and your own place within it. To find out more, visit www.plimsoll.co.uk