In its latest UK label industry report, Plimsoll Publishing identifies 167 emerging label converters that have increased sales by a minimum of 3 percent in the last 12 months and expect more growth in 2006. However, overall market growth is erratic. It averaged 3.9 percent in 2004, but is thought have reached only 1.7 percent in 2005. Of the 491 companies analyzed by Plimsoll, the performances of 170 of them were overshadowed by the activities of 167 higher growth companies. Many of the poorer performing companies saw sales fall by 12.4 percent in the same period.
“This is absolute evidence of how most of the growth in the market is going to a select group of companies,” said David Pattison, senior analyst on the project. However, it is not simply a case of the larger companies forcing out smaller competitors. Some of them are doing well, although this has less effect on the overall market.
Companies turning over less than £3 million ($5.32 million) grew on average by only 0.3 percent, compared to the industry average of 1.7 percent. Of those reviewed 51 percent increased their sales, while 86 companies saw average increases of 30 percent.
“There seems to be a buoyant market among the smaller companies, but the competition is more focused. They tend to be less concerned with the overall market and more concerned with their immediate competitors,” says Pattison. “However, the analysis contains a note of caution for those who saw sales drop. The average was -15.3 percent, which suggests the effect can be severe when a decline begins.”
The 720-page report contains a four-year financial analysis of each of the 491 companies surveyed. It is intended to help managers spot trends in the overall market, identify threatening competitors, or aid those seeking acquisition prospects. It costs £305 ($540), but Plimsoll will give Label & Narrow Web readers a 5 percent discount when ordering. Contact Melissa Aston at +44-1642-626400; e-mail at firstname.lastname@example.org, or visit www.plimsoll.co.uk for more information.