Britain’s top 100 private equity backed firms boost profits

LoveFilm tops Buyout Track list

Businesses in the UK have almost doubled their combined profits over the last two years, according to The Sunday Times Deloitte Buyout list.

The list, which ranks the top 100 private equity backed companies in Britain according to growth profit, revealed the financial strength of the retail sector.  Of the 100 firms, 31 were online or high street retailers, with well-known brands such as Cath Kidston (18) and Jack Wills (37) on the list.

The DVD rental company and the outdoor equipment retailer Go Outdoors came top and second respectively in the list, with Lovefilm, seeing its annual profit growth rise to over 280% over the last year. Its 2009 profits came in at just under £16m – up from £1.1m in 2007, promoting its main shareholder, the online retail giant Amazon, to acquire the firm last month for £200m.

According the Buyout statistics, despite the recession, the 100 companies have grown their combined profits by an average of 48% a year over the last two years to £1.4bn.

Mark Pacitti, head of London corporate finance advisory at Deloitte, title sponsor of the league table, said: “Many private equity backed businesses in the UK have weathered the storm once again and shown that sustained growth is possible.”

A typical Buyout Track 100 company should have private equity houses holding at least a 20% stake in the business. The average two year profit growth should range from 25% to 180% per year, with profits ranging between £3m and £50m and sales from between £20m and £300m a year. Analysts expect that businesses with private equity will continue to grow through mergers and acquisitions (M&A) this year.

Pacitti added: “As the economy continues to strengthen and transaction confidence returns, deal volumes and corporate appetite for expansion through acquisitions will increase and I believe that many private equity backed businesses will remain at the centre of M&A activity.”

© Crimson Business Ltd. 2011



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