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Competitive pressure 'pushes commercial cleaning firms into loss'

Published 15th May, 2015 by Neil Nixon

Competitive pressure 'pushes commercial cleaning firms into loss'

The latest profit report from Plimsoll Publishing has looked at the UK's top 942 commercial cleaning firms and assessed each on their profitability and financial health. The report found that, despite average margins up on last year, 34% of commercial cleaning firms are recording a loss. However, some companies are seeing impressive sales increases.

David Pattison, senior analyst on the project, said: “The difficulty for any business working in a very competitive market is to balance sales and profits. These figures show that, despite a relatively encouraging market, it still remains very difficult to make a good profit.”

Of the 942 companies analysed in the report:

• Average profit margins are up from 3.0 to 3.4.
• 323 companies record a loss.
• 154 companies recording a loss for the second year.
• 181 firms are now considered at high financial risk.

Pattison added: “It would appear the pressure in the market to maintain sales is having a large impact on the ability of some companies to make a profit. The consequences of not delivering a profit at first glance would seem quite minor, however, with 154 firms recording their second year of successive losses and 181 firms rated as now being at high financial risk, time may well be running out for some of these firms. A round of consolidation would seem to be inevitable. In fact we have highlighted firms we feel are most exposed to takeover.”

As a sign that it is not all doom and gloom, the study highlights 516 companies as 'exceptional' performers. These firms, despite the pressure in the market, have recorded record profits and sales increases. The report uses these as example companies of the success that can be achieved even in a saturated market place.

Copies of the report are available by calling Plimsoll Publishing Ltd on 01642 626 419 or emailing c.glancey@plimsoll.co.uk.