“A buyers market for cash rich companies”: Tyre Industry Report

According to a new report published by financial analyst Plimsoll, one in seven companies in the UK tyre, exhaust and battery industry could change hands due to economic pressures and the presence of a number of cash rich competitors. The report suggests that the market is going into an extended period of consolidation, which could pave the way for a defragmentation of the sector, currently regarded as one of the UK’s most sprawling. Plimsoll’s David Pattison, author of the new Plimsoll Industry Analysis – Tyres, Exhausts & Batteries, explains: “In our report we analysed 535 companies with a turnover of over £1 million per annum and have picked out 140 that are primed to be taken over. Buying one of these businesses represents a massive opportunity for someone to enhance their share of the market. Either way, the market is set for a wave of takeovers in the next months”.

Plimsoll says that its report will tell you which companies are set to be buying and who will be selling. Readers of Tyres and Accessories are entitled to a £50 discount of this new special edition of the Plimsoll Industry Analysis – Tyres, Exhausts & Batteries. Call 01642 626400 for further details and quote reference PR/TI75.

Pattison continues, “I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market. With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyers market out there for cash rich companies.

“In the Plimsoll Industry Analysis we have identified 131 companies that have a sizeable cash reserve sat on their balance sheets that, due to record low interest rates, is generating nothing. One company has a £426 million cash pot; a whopping 80 per cent of turnover. These companies are now in the position to buy up large chunks of market share at rock bottom prices and make that money work for them. They must be like kids in a sweet shop at the moment – all those distressed competitors available at a fraction of their true value”.