The UK's top growth companies in 2009
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With fast-growing turnover and profits, these 50 UK-based companies are doing more than their fair share to revive the nation's flagging economy. Here's the full list of this year's Business XL Rising Stars.
With fast-growing turnover and profits, these 50 UK-based companies in 2009 are doing more than their fair share to revive the nation's flagging economy.
Business XL magazine's annual Rising Stars research identifies the top 50 fast-growing UK companies in 2009 (full methodology here). It is the only such ranking to take into account both profit and turnover growth, as well as assessing future prospects through interviews with the featured companies. This year the Rising Stars have combined sales of £1.3 billion and profits of £147 million.
Turnover: *£23.1m (+15%)
Pre-tax profits: *£4.2m (+24%) *pro forma for year-end 2009
Sector: IT Based: Lancashire
‘If you’re admitted into a hospital, you have a one in eight chance of suffering an adverse event that is related to your treatment,’ says Stephen Critchlow, the urbane CEO of Ascribe. It’s a sobering thought, but it’s a problem that Ascribe is addressing through the software it supplies to primary and secondary healthcare providers in the UK and overseas.
‘The biggest, most compelling reason to use Ascribe’s solutions is the safety aspect – we reduce errors,’ states Critchlow. With clients in Ireland, Malaysia, Hong Kong, Australia and New Zealand, and the NHS seeking to overhaul its IT systems, this Bolton-based business has grown its revenues by just under 50 per cent for three consecutive years. Critchlow says Ascribe could ‘double its profits overnight’ but the strategy has been to invest heavily in infrastructure to develop the business instead.
Critchlow decided to delist the company from AIM last year after he became frustrated by its low market cap, although he is full of praise for the junior exchange. ‘It served a purpose. We used paper to acquire companies and we had three years where it was absolutely right for the business. But there was this silly thing that once we got below a market cap of £50 million, people just seemed to pull their money out for no reason.’
Since delisting, Ascribe has made two acquisitions, which brings the total number to ten since 2004. Critchlow is on the lookout for more and has ambitions to take the company onto the Main List. ‘We’d need a market cap north of £200 million,’ he says.
Turnover: £19.2m (+54%)
Pre-tax profits: £5.8m (+98%)
Sector: IT Based: London
Type “free games” into Google and Miniclip comes up top. The company, which offers free-to-play games to its community of 50 million users, has grown organically over the past nine years without ever spending any money on acquiring user data or advertising, according to CEO Robert Small. ‘We believe that investing in our games is the best way of growing our user base and that the returns we get from this will outweigh any money we could potentially spend on advertising,’ says the Ernst & Young Entrepreneur of the Year for 2008. The company makes money from advertising deals with companies such as Kellogg’s, Warner Brothers and Lego, and is expanding aggressively. ‘It’s a great time to be hiring with the talent pool being pretty deep at the moment,’ adds Small.
Turnover: £28.0m (+47%)
Pre-tax profits: £2.0m (+46%)
Sector: Cleantech Based: Gloucestershire
‘More customers and more windmills,’ is the reason new-age traveller turned entrepreneur Dale Vince (right) gives for his company’s fast growth. Launched in 1995 as the Renewable Energy Company and later rebranded as Ecotricity, the business started with £1,000 of Vince’s own savings. After building his own wind-monitoring tower, he shot to success when Scottish Power asked him to build a ‘shed load’ of the same product. No fan of VCs, because they are just ‘in for the short term’, Vince has plans to expand the company by adding gas systems as another energy source in six months’ time. ‘In ten years’ time we are looking to be the seventh biggest energy company in the UK,’ he says.
4. Alan Cristea Gallery
Turnover: £7.4m (+36%)
Pre-tax profits: £1.3m (+26%)
Sector: Media Based: London
Alan Cristea started planning for the recession 18 months ago. This is his fourth. ‘You have to learn to behave differently,’ he says. ‘Obviously there is a negative side: you do have meetings going through your costs item by item, but the important thing is to follow that up with a meeting where you are having creative ideas.’ The big mistake is to concentrate solely on cost cutting. ‘I’ve known quite a few people in the art trade who hold out in the recession by depleting their staff and their stocks; then when the upturn comes the camel’s back finally breaks.’ Cristea’s approach is paying off. While all the senior staff ‘instantly’ agreed to take pay cuts, the gallery achieved record sales in June, with 80 to 90 per cent of turnover coming from new works by living artists. Cristea, who headed a management buy-out of the business 15 years ago, has never borrowed money and this cautious approach to growth promises to pay off as the company weathers the recession.
Turnover: £5.2m (+58%)
Pre-tax profits: £1.6m (+65%)
Sector: IT Based: Surrey
A developer of web-based software for financial advisers and banks, Intelliflo has grown from seven employees when it started five years ago to 55 today. CEO Nick Eatock reveals that the company is owned ‘almost entirely’ by its founders and staff. It was also one of the first players in its market to capitalise on the growth potential of software-as-a-service. Eatock is sanguine about Intelliflo’s prospects. ‘With the FSA’s ideas [for financial services regulation], the one thing for certain is that there’ll be lots of change. For any technology company, especially a web-based one, that’s a good thing,’ he says, adding that 1,000 refinements are made to Intelliflo’s software every year. A deal with financial adviser network SimplyBiz (a former Business XL Rising Star) promises further growth, with members of the organisation receiving Intelliflo’s software at a subsidised price.
Turnover: £36.7m (+50%)
Pre-tax profits: £8.0m (+44%)
Sector: Health Based: Cambridgeshire
Dubbed the “Amazon.com of antibodies”, manufacturer and online retailer Abcam does not quite enjoy the household-name fame of its book- and DVD-selling peer, but its growth in the past few years is phenomenal – £17.1 million profits are expected for the year to June, up from less than £5 million in three years. The Cambridge-based company’s shares have continued to soar over the past two years, putting it in a tiny minority among its AIM-listed peers. Prospects appear bright, with a new processing facility helping to deliver the improved profit margins management had expected.
7. Woodford Holdings (Volac)
Turnover: £60.3m (+26%)
Pre-tax profits: £5.6m (+113%)
Sector: Food Based: Hertfordshire
Volac (wholly owned by Woodford Holdings) established a reputation for producing milk powders for calves and lambs in the 1980s. The raw material is liquid whey, a by-product of cheese making. More recently, Volac has moved into the higher-margin business of separating the protein from the lactose (sugar) in the liquid whey, which has allowed it to enter the human food market while continuing to sell an element of its products as animal feed. According to communications manager Andy Richardson, ‘It’s a unique business model that effectively uses all the components of the liquid whey.’ Run by MD James Neville, the grandson of the company's founder, Volac has joint ventures in the Netherlands and Malaysia.
Turnover: £53.5m (+62 %)
Pre-tax profits: £5.0m (+156%)
Sector: Telecoms Based: Lancashire
The UK’s most acquisitive company has been at it again in the past couple of months, snapping up the telecoms arm of bombed-out IT equipment provider Redstone for £17 million, and rivals AT Communications Group (ATC) and Eurotel for £20.5 million. Prior to joining AIM this July via an £81 million reverse takeover of telecoms company Freedom4 Group, Daisy had made 24 acquisitions (it ranked six in last year’s Rising Stars). Matthew Riley, founder and chief executive of Daisy, who made his fortune through the Freedom4 deal, shows no sign of slowing down, declaring, ‘We plan to be the UK’s leading telecoms service provider.’
9. Advanced Medical Solutions
Turnover: £20.3m (+21%)
Pre-tax profits: £2.9m (+54%)
Sector: Health Based: Cheshire
Wound treatments specialist AMS, having broken even four years ago and almost tripled earnings in the following two years before a mere 50 per cent gain last year, still has fantastic potential for further gains. Boss Don Evans, who left huge rival Johnson & Johnson to join the company over a decade ago, says the launch of its Liquiband “skin superglue” product into a $170 million US market next year is a ‘step change on the horizon’. The company has also recently gained US regulatory approval for a new silver polyurethane wound dressing. Growth has so far come from white-labelling its range of chronic wounds treatments for larger partners and selling its cut-price range to cash-conscious providers like the NHS, where usage of AMS’s range has risen from under 100 to half the 800 hospital trusts in the UK.
10. Digital Marketing Group
Turnover: £56.7m (+11%)
Pre-tax profits: £3.1m (+45%)
Sector: Media Based: London
The brainchild of chief executive Ben Langdon, a visionary in this particular sector, AIM-listed DMG has swiftly established a track record of meeting its numbers, even amid the most arduous advertising industry conditions in living memory, and with many smaller company peers issuing profits alerts.
Turnover: £16.2m (+25%)
Pre-tax profits: £5.0m (+82%)
Sector: Electronics Based: North Yorkshire
Established as a maker of communications devices for divers (hence the name, Deep Sea Electronics), DSE’s focus soon changed to the manufacture of electronic control devices for diesel generators. ‘We have 90 to 95 per cent of the UK market, but that is a limited size. The real growth area for us is in the 60 to 70 countries where our products are distributed,’ says marketing manager James Maynard.
Turnover: £27.1m (+27%)
Pre-tax profits: £1.9m (+95%)
Sector: Engineering Based: South Yorkshire
Brian McConnell founded engineering company Hydrock in 1996. It now has more than 400 staff. While admitting that the recession has affected orders, McConnell says his decision not to make redundancies has paid off. ‘Now we are well placed to take advantage of the upturn because, unlike our competitors, we didn’t carve chunks out of our staffing costs and still have all the right people on board,’ he says, adding that Hydrock is currently in talks with eight companies about potential acquisitions.
13. Redhall Group
Turnover: £86.7m (+52%)
Pre-tax profits: £4.4m (+102%)
Sector: Support services Based: West Yorkshire
Strong organic growth and selective takeovers are the hallmarks of engineering support services star Redhall. With proven entrepreneur David Jackson at the tiller, the AIM darling (number 11 in last year’s Rising Stars) is building its brand and swelling its order book through ever-strengthening ties with a loyal client base including Sellafield, the MoD and the Atomic Weapons Establishment.
14. Balhousie Care
Turnover: £15.0m (+74%)
Pre-tax profits: £1.5m (+15%)
Sector: Health Based: Scotland
‘We’re one of the fastest-growing companies in Scotland,’ says Tony Banks, chairman of Balhousie Care Group. The Forfar-based care homes manager has used the recession to its advantage, acquiring distressed businesses to complement its organic growth. ‘Falling property values don’t affect us too much because we’re not planning on selling and it means everything is cheaper for us,’ adds Banks.
Turnover: £3.1m (+56%)
Pre-tax profits: £1.0m (+82%)
Sector: Health Based: South Yorkshire
The words profit and spin-out rarely go together but that’s what Simcyp has achieved for its most recent year-end. Formed in 2001 as a spin-out from Sheffield University, this drug testing technology company assesses the reactions of virtual people administered with virtual drugs. However, the company’s growth is also down to its consultation work. ‘In the past 12 months we’ve had lots of orders on that basis,’ says MD John Evans, who adds that he sees ‘nothing in our foreseeable future that will require support from VCs’.
Turnover: £15.9m (+28%)
Pre-tax profits: £2.9m (+47%)
Sector: IT Based: Hertfordshire
Software provider Thunderhead helps companies to add branding to their correspondence and marketing literature through automated processes. Having secured contracts with the likes of Direct Line, Barclays and, recently, the Bank of America, the company’s customer base is going from strength to strength as it expands into new sectors and countries. Thunderhead draws additional strength from being self-funded with no debt.
17. European Electronique
Turnover: £30.7m (+19%)
Pre-tax profits: £1.3m (+99%)
Sector: IT Based: Oxfordshire
‘Even though we’re in a recession, there isn’t a slowdown in government,’ says Mark Holton, general sales manager at European Electronique. The ICT provider has been helped through the downturn by lucrative contracts in the public sector, where it does ‘85 to 95 per cent’ of its business, according to Holton.
Turnover: £9.3m (+42%)
Pre-tax profits: £1.4m (+54%)
Sector: Media Based: London
Brainjuicer founder John Kearon isn’t letting the recession curb his enthusiasm: ‘We want to compete with WPP, not be bought by them.’ Bold words indeed, but it’s certainly full steam ahead as plans for next year include opening the company’s eighth and ninth global offices in Brazil and China. It’s optimistic stuff from the market research group but we definitely like their style (Brainjuicer came in at 32 in 2008).
19. Caretech Holdings
Turnover: £67.7m (+27%)
Pre-tax profits: £7.7m (+34%)
Sector: Health Based: Hertfordshire
Founded by brothers Farouq and Haroon Sheikh (executive chairman and chief executive respectively), Caretech provides social care, supported living and other services for people with learning difficulties who are unable to live alone. The group’s latest financials, for the half-year to March, were nothing short of excellent, showing turnover nurtured 30 per cent higher to £39.5 million – significantly, the rate of organic growth was very healthy at eight per cent – and a 47 per cent pre-tax profits surge to £5.7 million (Caretech was 40th in last year’s Rising Stars).
20. M&M Direct
Turnover: £74.1m (+18%)
Pre-tax profits: £5.6m (+32%)
Sector: Consumer Based: Herefordshire
Described by CEO Steve Robinson as ‘an internet version of TK Maxx, but with the look of a proper full-price retailer’, M&M Direct sells excess stock from famous brands at competitive prices and has grown its business through the downturn largely through word-of-mouth. ‘Because we don’t want to destabilise any existing market, we don’t shout about what we do,’ says Robinson, adding that a recent customer survey revealed more than 99 per cent of the company’s customers would recommend it to friends and family. M&M has recently launched a euro-denominated version of its website.