Zero growth, sliding profits and escalating debts will signal the end for many ceramic goods companies. Consolidation will be essential as supply continues to outstrip demand, says a new report published by Plimsoll Publishing Ltd.
Plimsoll’s annual financial health check of the top 1,000 companies in the UK ceramic goods industry reveals that 51% of companies rated have now deteriorated in overall financial strength from last year. Each company in the industry is given a rating based on its overall financial strength as follows:
• Strong - companies proving sound financial management during the past four years
• Good - companies of sound financial strength during the past four years
• Mediocre - performance in these companies are in transition
• Caution - companies with a weakening financial position
• Danger - performance in these companies must change in order to survive.
Thirty-six of the UK’s top 97 ceramic goods companies now have a ‘danger’ rating. ‘Strictly speaking a company cannot stay in our ‘danger’ rating,’ says
David Pattison, Senior Analyst for the ceramic goods industry ‘They will either improve or disappear. The ‘danger’ rating can be a great opportunity to rebuild or for a new owner to take a company over.’ Pattison believes that acquisitions in the ceramic goods industry are inevitable and essential for the future of the market.