Research reveals optimism amongst successful SMEs

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 despite the financial and economic impact of coronavirus, nearly a third (30%) of well-established successful SMEs still expect to see their profits increase over the next 12 months. A further 10% expect to see no change to their profitability over the next year.

Over the longer term, the sense of optimism is even higher, with nearly half (46%) of the SMEs surveyed predicting their profitability will increase between now and 2023. This rises to 52% when looking at the next five years.

However, there are inevitable plans for SMEs to have to reduce headcount as an unavoidable consequence of the global pandemic. Some 96% of those surveyed said they intend to reduce their headcount over the next two years, with 48% predicting a fall of over 20%.

Over the next 24 months, what changes will you make to your business/what changes do you think will be made to the business you work as a result of the coronavirus crisis?

Callum Laing, CEO of MBH Corporation plc: “Coronavirus has had a devastating impact on businesses around the world. However, SMEs can often be nimbler and more innovative than larger companies when responding to challenges, and our research reveals that despite the current crisis there are many SMEs that are still performing well and who are optimistic about their future. As an investor, there are still many very well-run smaller companies that represent strong value opportunities and exciting growth prospects.”

Recently, MBH Corporation PLC released its annual report for the year ended 31 December 2019, revealing that it achieved a sales growth of 306% to GBP 50.8m (2018: GBP 12.5m) and a net profit of GBP 3.6m – an increase of 190% compared to the previous year (2018: GBP 1.3m). It also confirmed its first dividend of EUR 0.5 cents corresponding to a dividend yield of 1%.

MBH’s target well established companies that are generally 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 at an agreed multiple.

Fixed for 365 days, 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 by following appropriate corporate and financial governance, and business owners are also incentivised financially to enhance shareholder value. As shareholders, they benefit personally from this.