Author: Paula Fagan, Marketing Manager
This is the fourth article in our Clarity series where we look at UK SME viability and vulnerability across sectors and regions to provide professional advisers and business owners with powerful insights. In this article, we look at variations in recent SME performance and risk profiles to unlock potential for SMEs by region.
This is the fourth article in our Clarity series where we look at UK SME viability and vulnerability across sectors and regions to provide professional advisers and business owners with powerful insights. In this article, we look at variations in recent SME performance and risk profiles to unlock potential for SMEs by region.
Exploring regional inequality
Our Clarity data reveals that UK regions continue to have significant variation in recent SME performance and risk profile. Regional fortunes in the UK remain extreme in the extent to which incomes, productivity, and even job-creation vary from region to region.
Regional inequality in the UK is a multi-faceted problem with structural and strategic causes. Even with all the right policy measures in place, improvement will, therefore, be incremental; quick wins will be few and far between.
Comparing UK regions to unlock potential
Our Clarity research compares regions using a series of financial performance ratios that speak to an SME's financial health, which are correlated with stress/distress and growth indicators. The quantifiable and trackable early warning signs and growth indicators identified by Clarity are based on more than 30 years of data gathering.
Our latest research reveals that the capital efficiency of SMEs in the North East has fallen sharply this year and now lags its high-performing neighbour, the North West. Just as capital efficiency in the North East is deteriorating, our research reveals that SMEs in the region have the lowest pre-tax profitability in the UK. Returns trail their counterparts in the South East by more than 10%.
At the other end of the performance spectrum is the Midlands, with the West recording the highest return on capital employed (ROCE) of any region and the East also comfortably outpacing the UK average. However, many SMEs in the West Midlands are struggling to sustain liquidity and growth.
Further analysis by region can be found in Quantuma’s new report ‘Clarity in uncertain times’. Designed to support professional advisers and business owners, this data rich report examines SME viability and vulnerability across sectors and regions, equipping professional advisers and business owners with powerful insights. The Clarity report signposts the way forward for regions, indicating short- and longer-term areas of focus to help unlock potential for regional SMEs.
The way forward - Clarity in uncertain times
We have recently launched our latest programme of insight and support powered by our unique data asset, Clarity. Developed by an expert analytics team, the Quantuma Clarity data tool provides analysis of SME’s performance against growth and distress factors to provide professional advisers and business owners with powerful insights, to allow them to unlock potential.
Our latest report
To request your copy of ‘Clarity in uncertain times’, our data rich report comparing SME viability and vulnerability across sectors and regions, please click below.
