A recently-published report analysing the financial performance of companies in the AV market awards 141 of them a ‘danger rating’ – meaning that they will struggle to survive. The Plimsoll Analysis Audio Visual Equipment report claims to provide an up to date and comprehensive analysis of the top 499 companies operating in the market, allowing for benchmarking, identification of takeover targets and more.
Every company in the market has been rated as Strong, Good, Mediocre, Caution or Danger according to their latest performance. The written summary element is said to expose all the underlying strengths and weaknesses of each individual company: the rating provided for each company is described as a simple guide to their likelihood of failure, or success. Plimsoll claims that its methodology has provided an early warning of trouble ahead: 9 out of 10 companies' in administration were rated as caution or danger up to two years prior to their demise.
Beyond the 141 companies given a ‘danger rating’, 167 AV equipment companies are identified as prime takeover targets because they are overstretched and thus susceptible to a hostile approach.
Plimsoll says that a further sign of the intense competition within the UK AV equipment industry is that 133 companies continued to sell at a loss for the second year running. These serial loss makers are, according to Plimsoll, adding to the congestion in the market, often undercutting the rest of the market and driving down profit margins across the board.
Plimsoll has a stark warning. It says that the next 12 months represents something of a crossroads for these companies as they face two distinct choices; either they operate more responsibly or they run out of cash.