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'One in six catering equipment firms could change hands'

20th Jul 2009 - 00:00
Abstract
One in six companies in the UK catering equipment industry could change ownership as a result of the current economic climate, claims a new study by financial analysts Plimsoll.
With a surprising number of "cash rich" competitors waiting in the wings, the market could be set for a prolonged period of consolidation. David Pattison, author of the new 'Plimsoll Industry Analysis – Catering Equipment', explained: "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." Pattison continued: "In the Plimsoll Industry Analysis we have identified 88 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 £41 million cash pot; a whopping 80% 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". "The UK Catering Equipment market is still widely regarded as one of the UK's most fragmented sectors. In our report we analysed 414 companies with a turnover of over £1 million per annum and have picked out 145 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." Readers of Cost Sector Catering are entitled to a £50 discount of this new special edition of the Plimsoll Industry Analysis – Catering Equipment. Call 01642 626400 for further details and quote reference PR/HP23.
Written by
PSC Team