David Pattison, senior analyst at Plimsoll Publishing Ltd, commented: "There is clear evidence of stagnation at the top of the market: 12 of these Top 39 companies failed to increase sales above inflation compared to 17 last year. With many also experiencing rising costs, their future direction now looks uncertain."
He went on to say: "Size does not necessarily lead to success in the sound equipment industry. 10 of the leading companies did not make a profit last year. Despite their size, they are less profitable than the smaller market players. Only six of the top 100 companies have shown profit growth in three consecutive years. Two companies have not made any profit over the same period!"
23% of directors have been in the job less than three years. They are either in holes they did not dig or getting praise they do not deserve. There is also an ageing set of directors. 20% of the top 39 sound equipment company's directors are aged over 60. They are well paid, with average earnings of £39,000 per annum.
The top end of the sound equipment industry is heavily congested, with no room for any of the major companies to breathe. In other markets where this has been the case, supermarkets for example, there has been a series of major acquisitions to clear the air. Smaller companies are at little risk of takeover by any of the majors - they simply don't offer any strategic opportunity.
Pattison says: "It's a clash of the titans scenario - I predict we might see at least two of the UK's top 39 sound equipment companies having to merge or be taken over. In fact it's so likely we have put 15 on the danger list."
The full 201-paged analysis including a four year financial health check of each of the Top 39 UK sound equipment companies is available for £500 by calling the number below or visiting the website. Readers of LSIOnline receive a 5% discount when ordering.
(Sarah Rushton-Read)
