A Good Time to Blame the Industry – Plimsoll Analysis

Industry analysts Plimsoll Publishing asks, if the market suffers a recession this year, which companies in the Tyre Manufacturers and Distributors sector will be most affected and which couldn’t care less? It also asks which companies are already at risk and will use any talk of a slow down to bury bad news? The new publication (Plimsoll Portfolio Analysis, Tyre Manufacturers & distributors 3rd Edition 2005) examines the current financial state of the top 240 companies in the sector and the study has revealed four distinct profiles of company behaviour.

Each of the companies were assessed on their sales and profitability in their last two years’ trading and the results were as follows:

16 per cent are at most risk as they are already affected and experiencing a slow down in the market. Both sales and profits have fallen in the last period.

39 per cent are doing well and seem unaffected, showing no signs of recessionary behaviour. Both sales and profits have increased.

19 per cent are showing sales of caution. While profits have improved, sales have declined.

26 per cent seem intent on capturing market share whatever the cost. While sales have increased, profits have fallen.

Another question asked by the analysis include “Has the company improved margins in the last period?” with the results being:

Improved margins: 42 per cent of companies
Same margins: 21 per cent of companies

Falling margins: 37 per cent of companies

The question “Has the company’s debt position increased in the last period?” revealed that 33 per cent of companies had seen debt levels fall, 44 per cent have the same level of debts as last year, while 23 per cent have seen total debts increase.

David Pattison, senior analyst at Plimsoll, commented: “I think the game of blame the industry will start soon. Let’s face it, it’s an ideal time to rush any bad news out and managers can use talk of a recession to cover up problems that go back years. The reality is that there is a lot of success out there and these struggling companies are simply being outplayed by the competition.”

The 415-page publication can be obtained from Plimsoll.co.uk or by calling 01642 626 400. Cost of the analysis is £305 and readers of Tyres & Accessories will receive a five per cent discount upon ordering.