Business analysts estimate UK packaging materials companies squander £1.4bn worth of profit a year, according to a market report by Plimsoll that also reveals how 592 players would make more profit if they were taken over.
The report finds that 32% of companies are making a loss, 17% are losing money for the second year running and 3% of companies made less than 3% return on investment. Almost 600 of the 800 companies covered would make more profit under new ownership, resulting in £1.4bn extra revenue in the industry, analysts conclude.
That money is currently being thrown away because of companies’ failure to control their losses and manage their businesses more effectively.
Senior analyst David Pattison says: “These results prove just why the packaging materials industry is currently hot with takeover talk and speculation about future ownership. It’s certainly no surprise that trade buyers and private financiers are taking a close look at the industry.”
The report says simple changes such as cutting out unprofitable sales, looking again at unnecessary stock levels, keeping control of trade debtors and reviewing productivity to achieve sales per staff of at least £120,000 would transform a business.
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