Research reveals impact of Covid-19 on SME profit levels
New research commissioned by MBH Corporation plc, a UK headquartered listed diversified investment holding company that acquires successful, strong-performing small to medium enterprises across multiple geographies and sectors, reveals that 1 in 5 SMEs still expect to make a profit in 2020, with 24% expecting to break even and the remainder believing they will either make a loss, or are unsure.
Of the 40% of companies that do anticipate making a loss this year, many are optimistic about returning to profit. More than half (57%) are confident they will be back in the profits by 2022 and just under half of those expect a return to profitability as soon as next year.
| When businesses that expect to make a loss in 2020 expect to return to profit | |
| Never | 5% |
| 2021 | 25% |
| 2022 | 32% |
| 2023 | 12% |
| 2024 | 4% |
| Beyond 2025 | 3% |
| Don’t Know | 18% |
Callum Laing, CEO of MBH Corporation plc: “Despite the challenges, small business owners are an optimistic lot when it comes to the future. Although never easy, many of the businesses we talk to have survived the Global Financial Crisis and other downturns and are confident they will survive this too.
The UK has many successful and well-run businesses that will not only survive this crisis but come out the other side stronger. We hope the government, associations and the public will continue to do everything they can to support them.
“As a publicly listed holding company of SMEs, we know that there are many attractive and well run companies out there. So far this year eight great companies have joined us and we are looking forward to welcoming several more before the end of 2020”
MBH targets well-established companies that are predominantly debt free, delivering around GBP0.5m-GBP10m EBITDA and are generally still run by their founders.
By leveraging its unique Agglomeration™ strategy, MBH can create substantial shareholder value through the consistent and accretive acquisition of excellent companies. With Agglomeration™, profitable companies convert their private shares into public shares or bonds in MBH Corporation plc in a perpetual earn-in model. Company owners are then incentivised to accelerate their growth trajectory using the resources of the plc including expertise, skill transfer of best in class practices, cross-selling to other group companies and where appropriate, zero cost funding for new growth projects.
Each group company retains its autonomy and follows appropriate Corporate and Financial Governance. Business owners are also incentivised financially to enhance shareholder value through a share bonus scheme aligning their interests with public shareholders.
