The UK Scientific & Laboratory Equipment industry – a review of 2009

As we approach the end of a turbulent 2009 for the UK Scientific & Laboratory Equipment industry, Plimsoll have taken a look back at the highs and lows of the last 12 months and looked forward to the threats and opportunities facing the market in 2010.

181 companies in the market are finishing the year in financial difficulty. David Pattison, author of the new Plimsoll Analysis: An assessment of the top 691 companies in the UK Scientific & Laboratory Equipment industry explains, “Having clung on through the bad times many of these struggling companies are going to run out of time and fail just before the recovery really takes hold. Sadly, some of them are just too weak to carry on and there will be a spike of failures in the New Year. On the flipside, their demise will bring a welcome reduction in competitive pressure for those left”.

However, among the gloom (which, lets face it; has been pretty deep in 2009) there have actually been some outstanding performers. Pattison says “A number of companies have managed to improve their performance in the latest year. They are part of a band of 345 companies that prove success can still be achieved in the Scientific & Laboratory Equipment industry despite difficult trading conditions. They also prove that bad companies
fail in a recession; good companies simply do not. These companies will lead the industry out of recession with some smart acquisitions and maintaining their recent success”.

Pattison is also convinced the market is due a prolonged period of consolidation with the number of companies in trouble leading to heightened takeover activity. He explains “With too many companies chasing weakened
demand it is inevitable that there are likely to be a number of high profile mergers and takeovers. In all honesty it’s long overdue. Once demand started to flag it was inevitable companies would be caught out. This period of
consolidation is needed to sort out the dead wood. We have named 81 companies as the best acquisition prospects in the market”.

He also reserves special mention for those reckless companies that continue to chase sales despite mounting losses, “There are a group of 86 serial loss makers still operating in the market. For the 2nd and even 3rd year running these companies have made a loss. Whether they are blatantly chasing sales or just trying to maintain their market share, something has to give. The recession has put prudence back at the forefront of boardroom strategy and these companies have to cut their cloth accordingly or face the consequences”.

Summing up, the new 2010 edition of the Plimsoll Industry Analysis shows a buffeted market emerging from recession with a third of companies making a loss and 1 in 3 companies in financial difficulty but as Pattison insists “If you are going to make a success of 2010, you need to learn the lesson of 2009. There are going to be big changes in the UK Scientific & Laboratory Equipment industry with lots of takeovers, a number of high profile failures and even the odd surprise or two along the way”.

The 2010 edition of the Plimsoll Industry Analysis individually assessing every company in the UK Scientific & Laboratory Equipment industry is available now. Readers of Labmate UK and Ireland will get a £50 discount if they call 01642 626400 and quote reference PR/AA10.

UK Outlook for laboratory equipment sales is down as GAMBICA launches UK Laboratory Purchasing Managers Index

GAMBICA, the UK trade association for companies in Instrumentation, Control, Automation and Laboratory Technology, has launched a purchasing trend survey for the UK laboratory supply industry.

The Laboratory Purchasing Managers Index (LMPI) is completed, on-line, by a targeted audience of laboratory purchasing managers and professionals, The LMPI survey aims to plot the trends in laboratory purchasing across the industry and will take place on a quarterly basis.

The first set of results, on data collected at the end of October/beginning of November 2009, showed that the industries’ purchasing intensions for chemicals and consumables, over the next three months, is not all doom and gloom.

The survey showed that purchasing of chemicals and consumables are likely to hold up and that some of the 16 sectors surveyed are actually planning to increase their spending.

All types of equipment plus service and repairs purchasing are forecast to be down.

Tim Collins the Director of the Laboratory Sector at GAMBICA commented “Clearly those who took part trust the association’s impartiality and confidentiality, as nearly 200 purchasers filled in the survey. We hope that we can continue to increase this number as time goes on. The survey is quick and easy, with those taking part getting the full results back, if they wish.”

The full results are available to GAMBICA members and those who submit data and ask to see the results. Future results will show trends added to the overall results.

More information about GAMBICA is available at www.gambica.org.uk

Employment tax break for new start ups given a cautious welcome by business group

A plan for a National Insurance (NI) tax holiday for new start-ups could create 60,000 jobs, it has been claimed by the Shadow Chancellor George Osborne at the recent Conservative Party conference in Manchester.

The tax break on employers’ NI contributions, which would apply to the first ten people recruited by a firm, was unveiled by the party as one of a series of measures it plans to introduce to ‘get Britain working’ should it win power in the next election.

The Forum of Private Business (FPB), which is campaigning against the 0.5% NI increase scheduled to take place in 2011 – when recession hit firms are likely to need to recruit again in order to meet demand and grow – is cautiously welcoming the latest proposal.

“For prospective employers, as one of a raft of measures aimed at getting Britain back to work and boosting the country’s skills base, abolishing National Insurance (NI) for new start ups stands out as today’s key announcement,” said Phil Orford, the FPB’s Chief Executive.

“At present, employers’ NI contributions are set to rise by 0.5% from 2011, just as small businesses are likely to be in a position to recruit staff in earnest. We will examine the savings that will need to be made to pay for this initiative, but welcome it in principle as a genuine stimulus to employment, small business growth and sustained economic recovery.”

According to the FPB’s recent quarterly Referendum survey of members, 37% of respondents said they would actively seek to recruit new employees in the coming year.

In its submission to the Government ahead of the Pre-Budget report, the FPB is calling for measures to support the smallest, most vulnerable employers at this critical time.

In addition to the delay, at least, in the 0.5% NI increase until the economy has recovered sufficiently to sustain it, the FPB wants a 12 month reduction in NI contributions for businesses with fewer than 10 employees.

The NI holiday would be available for the first two years of a new Conservative government. During his speech at the 2009 conference, Mr Osborne said that details of the savings that will be required to pay for it will be revealed shortly.