One in four UK label companies ‘making a loss’

One in four companies in the UK label industry is making a loss as economic conditions continue to take their toll, according to a new study by industry analyst Plimsoll.

The study reveals how many of these 109 loss-making companies have simply had an isolated bad year, and how many are ‘burying their heads in the sand’.

David Pattison, author of the new market, said: ‘More and more companies are making a loss for the first time in their history. Many can rightly claim to be victims of difficult trading conditions. A quick refocus on profitability would ensure this an isolated occurrence.’

However, overall conditions are no excuse for a band of serial loss-makers in the market, says Pattison: ‘57 companies are making a loss for the second, even third year running and are simply selling at prices their business cannot sustain. They have put off making the painful decision that more prudent companies made a while ago. No one wants to trim costs, lay off staff, cancel dividend payments and the like but carrying on regardless is now unviable. They can no longer bury their heads in the sand.

‘I congratulate management teams that have made the often difficult and unpopular decisions. They have cut their cloth according to the market conditions and are more stable for it. Those failing to do so are running out of time and cash. Without a big increase in demand they cannot support their pricing strategy much longer. Watch out for a number of failures among the companies we have identified.’

The new Plimsoll Analysis – Labels provides an assessment of 407 companies in the market.

Readers of Labels & Labeling are entitled to a GBP £50 discount of this new edition of the Plimsoll Analysis – Labels. Call (+44) 1642 626 400 for further details and quote reference PR/PI25.

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