BPIF McInnes survey shows optimism

11 December 2006


A recent BPIF McInnes Corporate survey of UK labels companies showed 70 per cent of respondents expected consolidation in the sector to increase in the next two years. Forty-five per cent of these believe the process will be mainly driven by insolvencies, compared to 47 per cent who cite merger and acquisitions as the main force.

"Over 55 per cent of companies in this £500M market are actively pursuing or currently considering a merger, acquisition or disposal strategy,” says Marcus Clifford, managing director of BPIF McInnes Corporate, the BPIF's recently launched M&A service. “Most are looking for businesses to complement or supplement their own within the labels and packaging sector in the UK although a small proportion is looking overseas to the Continent.

“It was particularly pleasing to see that 56.5 per cent of companies had undertaken a strategic review to help formulate a plan of action and it certainly shows more management time is being spent on strategic issues,” he continues. “However, whilst more than half of the respondents were optimistic or very optimistic about their own businesses, only 12 per cent of respondents were optimistic about the sector as a whole.”

The survey was supplemented by sector specific data from the BPIF’s own Printing for Profit report, which confirmed that, whilst overall the sector performed below the national average for the printing industry, there are some extremely wide variations in performance. Over the past 10 years, larger companies have been growing faster than smaller companies (4.2 per cent compared to 0.1 per cent), whereas on average smaller companies are more profitable (9 per cent compared to 5 per cent).

“It’s clear that there is an opportunity for companies to use consolidation effectively to boost company performance and shareholder returns in this sector, however it must be underpinned by a clear and robust strategic plan whether it be for growth, differentiation or a new business model,” concludes Marcus Clifford.



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BPIF McInnes Corporate
Tel: +44 (0)20 7915 8408





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