A study of the financial health of 1,000 UK lighting businesses found that 235 were in need of capital injections, cost cutting or financial restructuring if they were to continue to trade. However the majority of those surveyed (535) fell into the safest category, showing that ‘the fundamental market is healthy’, Plimsoll said.
Senior analyst David Pattison said many lighting companies ‘are clearly operating under financial pressure and many risk being forced out of the market’. ‘It is clear from this study the lighting market is going through a period of great change and the market is highly competitive. If enough warning can be given, the management has time to get a survival plan in place to save the company,’ he said.
Plimsoll said its analysis method was tested on a sample of previously failed companies. Failing companies typically experience a fall in sales and profitability relative to investment and an increase in debt, it said.