Smaller companies still struggling
08 / 06 / 2010
SMALLER aviation companies are struggling to recover from the recession, according to market analysts, Plimsoll.
In the UK, 75 small companies in the industry are in financial difficulty as the lingering effects of the credit crunch continue to bite hardest at the lower end of the market.
Plimsoll says smaller companies have not had the same facilities to ride out the recession as well as their larger counterparts.
Plimsoll’s senior analyst, David Pattison (right), said: “While large companies have relied on their size, brands and better access to cash, smaller companies have been left high and dry.
“We have given 75 small companies a danger rating. While conditions have improved of late, I fear a high proportion will fail. Whereas large companies can call on banks and parent companies or cut out loss-making parts of their operations, smaller companies are increasingly running out of cash. 123 companies are selling less than last year. Clearly they have seen demand for their products dip or, worse still, a new competitor has emerged. With their finances already stretched, they have little left in their arsenal to fight back.”
So what next for these small companies? “There are clearly too many small companies chasing too little market. The inevitable consequence is another round of consolidation with large competitors buying small companies at a discount. Of the 237 companies with assets of less than £3 million, we have identified 115 companies as being vulnerable to takeover.”