Mid‐sized firms lead the way for UK business as others stagnate

Mid‐sized businesses are outperforming other UK public limited companies, yet new research claims they are unsupported in doing so.

Accountancy firm BDO has said the sector is vastly undervalued, especially as it helped to create nearly 535,000 jobs in the last year.

That compares favourably to losses of 157,000 roles at FTSE 350 firms and growth at small businesses of around 191,000 jobs.

In addition to the job growth, mid‐sized firms have also expanded at a faster pace and seen greater profit across the last five years than businesses of other sizes.

While revenues have leapt by 32% to £1.3 trillion, profits have also risen by 45% to £111 billion at the UK’s mid‐sized firms.

This puts them firmly ahead of larger and smaller enterprises where revenues fell by 0.6% and 2% respectively in the same time frame, with profits falling by 40% at larger firms and rising by 6% among smaller businesses.

Despite accounting for just 0.5% of all UK firms – equating to around 29,000 businesses – mid‐sized businesses provide more than one third of total UK revenue, alongside one in three private sector jobs.

However, the role of mid‐sized firms is being overlooked according to BDO and this has caused concerns that the UK economy could suffer in the long‐term.

The firm has suggested the mid‐sized companies – categorised as being a mix of those with revenues of between £10 million and £300 million, being AIM listed or private‐equity owned – fall into a policy gap.

It is suggested that they are too large to benefit from policies for small firms, but not large enough to command attention in the same way as FTSE 350 businesses.

Despite the strong performance noted among mid‐sized firms, a rising number of larger and small businesses are facing up to a rising threat of insolvency and financial difficulty.

The high‐profile collapse of Carillion has severely impacted upon the construction sector, while knock‐on effects have been felt along the supply chain, with the retail and manufacturing industries also facing the strain.

By Phil Smith


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