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Domestic gloom offset by export growth

Mar 20 2012
Small business turnover decreased by 3 per cent between Q3 and Q4 2011 according to The Cashflow Barometer, a quarterly report from Invoice and Asset Based Lender, ABN AMRO Commercial Finance.

Small businesses also saw a reduction in average customer numbers in the same period, falling by 7 per cent.

This slight contraction in performance comes despite an overall year on year (YoY) growth of 3 per cent between 2010 and 2011.

Peter Ewen, Managing Director of ABN AMRO Commercial Finance, comments, “This dip in Q4 mirrors a lot of the economic statistics we are seeing at the moment. Things haven’t improved as much as we hoped and businesses will need to fight hard to get back on track in the first half of 2012.

“It’s important that businesses get the support they need from government, advisors and lenders to help them stabilise and spot growth opportunities.”

The Cashflow Barometer is a quarterly indicator of the financial performance
of UK small businesses, based on analysis of 700 companies.

Sector Slowdown

The fourth quarter also showed slight decreases in performance in manufacturing, services and engineering sectors.

Turnover in manufacturing and engineering firms decreased by 4 per cent and 1 per cent respectively while turnover for services firms contracted by 3 per cent.

Similarly, recruitment turnover dipped by 3 per cent in the same period following an increase of 11 per cent between Q2 and Q3.

The average number of customers per company also fell by 8 per cent in engineering and 2 per cent in manufacturing.

Despite increases between Q2 and Q3 2011 of 8 per cent and 7 per cent, the number of customers of services and recruitment companies contracted again by 9 per cent and 5 per cent respectively between Q3 and Q4 2011.

Peter Ewen comments, “The shaky economic picture is reflected in these key business sectors. The overall trend is upwards but growth is slow and continued expansion is by no means guaranteed.

“Businesses must have their wits about them to come back from an uncertain fourth quarter and seek stability in 2012.”

Export Growth

Despite a contraction in domestic turnover, small businesses are seeing significant export growth with YoY turnover up by 83% to the end of 2011.

While export turnover dipped by 4% in the fourth quarter this followed increase of 42 per cent between Q2 and Q3.

Average invoice payment times have also improved, falling by 2% YoY from 64 in 2010 to 62 in 2011.

Peter Brinsley, international manager at ABN AMRO Commercial Finance commented, “Whilst these stats highly positive, most firms are starting from a low base in exports. Many businesses have been forced to seek overseas opportunities for the first time as they continue to struggle at home.

“This said, the fact that SMEs are increasingly enjoying international, and emerging market, success is certainly a step in the right direction. For example, we are seeing particular international uplift in recruitment and metal sectors across EMEA markets.”


Notes to editors

About The Cashflow Barometer Report

The Cashflow Barometer is comprised of statistics from almost
700 ABN AMRO Commercial Finance customers. All companies in the sample fall into the BIS definition for small businesses – under £5.6m turnover and fewer than 50 staff. Percentage changes are based on mean averages for monthly turnover, customers, time taken to pay invoices and invoice numbers for the years 2007-11. The percentages included are percentage changes between two values.

About ABN AMRO Commercial Finance PLC (formerly Venture Finance PLC.)

ABN AMRO Commercial Finance is an award-winning Invoice and Asset Based Lender and part of the ABN AMRO Commercial Finance Group. Established in 1989, the company provides Factoring, Invoice Discounting, Export Finance, Structured Finance, Asset Based Lending and numerous related services to start-ups through to £250m turnover organisations. Providing consistent support via its 200+ staff and 11 regional offices, ABN AMRO Commercial Finance helps clients manage working capital, refinance, restructure, fund business opportunities and expansion, purchase new equipment and finance M&As.

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