Financial and business services companies are showing confidence about their long-term growth prospects in spite of the current economic climate, according to research from Santander Corporate Banking. Directors of companies with annual revenues of up to £20m are expecting, on average, to increase their turnover by 108% in the next five years.
The findings are an encouraging sign for the sector, with nearly as many directors (34%) highlighting the active pursuit of growth as an immediate short-term priority for their business as those who are focused on survival (35%). Furthermore, one in seven (15%) directors say their business has never been in better shape. However, while the sector is increasingly focusing on growth, many companies are still looking to cut costs, with 27% identifying this as an immediate priority.
Nationwide, smaller companies are most optimistic about their growth prospects with the average company with a turnover of less than £500,000 expecting to grow their business three-fold (by 202%) over the next five years.
However, larger companies also have ambitious expansion plans, with businesses turning over between £5m and £20m expecting to grow by an average of 86%.
Businesses in Scotland and Northern Ireland are most optimistic about their growth prospects over the next five years, expecting to grow by 194% on average. Businesses in the south east (136%) and South Wales and the southwest (123%) also show strong levels of optimism. However, businesses in the northwest, West Midlands and North Wales are less optimistic, expecting to grow by around 50% over the same period.
Despite the general optimism, financial and business service providers say the tough trading environment represents the biggest challenge, cited by over a third (38%) of directors as preventing them from growing.
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