45 small companies in the fire protection industry are in financial difficulty as the lingering effects of the credit crunch continue to bite hardest at the lower end of the market, according to market analysts Plimsoll. The report states that smaller companies have not had the same facilities to ride out the recession as well as their larger counterparts.
David Pattison, author of the Plimsoll Analysis - Fire Protection (www.plimsoll.co.uk)
explains: "While large companies have relied on their size, brands and better access to cash, smaller companies have been left high and dry."
He continues: "We have given 45 small companies a 'Danger' rating. While conditions have improved of late, I fear a high proportion will fail. Whereas large companies can call on banks and parent companies or cut out loss making parts of their operations, smaller companies are increasingly running out of cash."
Pattison also points out how small companies are struggling to maintain their market share and being squeezed out of the market. "209 small companies are selling less than last year. Clearly they have seen demand for their products dip or worse still, a new competitor has emerged. With their finances already stretched, they have little left in their arsenal to fight back."
So what next for these small companies? Pattison says: "There are clearly too many small companies chasing too little market. The inevitable consequence is another round of consolidation with large competitors buying small companies at a discount. Of the 489 companies with assets of less than £3 million, we have identified 186 companies as being vulnerable to takeover."