2015 reaching new heights …with the mid-market leading the way plus FD AGENDA: Finger on the investment trigger? WOMEN IN THE BOARDROOM: Representing Yorkshire INTERNATIONAL: Exports on the up TAX: Good headlines, but watch the small print EDUCATION AND SKILLS: A growing crisis? MANUFACTURING: Making things happen FOOD AND DRINK: Sales up, profits under pressure key figures What is the sales up, cash up, Yorkshire Report? investment up, employment up TOTAL CURRENT YEAR PRIOR YEAR CHANGE Turnover £102bn £96bn 6.9% taking the region’s temperature Overseas Turnover £9.5bn £8.8bn 7.7% Profit (Loss) after £2.29bn £2.34bn (2.5%) As a proud region with a strong sense of identity, Yorkshire Tax has its own distinct economy. So why shouldn’t it have its Number of 620,000 591,000 4.9% very own annual review? That was the thinking behind the Employees first BDO Yorkshire Report and now, eight years later, we Net Cash £3.2bn £2.3bn 43.7% have charted the region’s performance during some of the Average Salary £19,000 £18,000 2.2% most turbulent economic times in its history. Dividends £1.7bn £1.0bn 69.6% Average Director £178,000 £150,000 18.1% This year we’ve expanded our fictional Group so it is Remuneration * now made up of Yorkshire’s biggest 250 companies (by Gearing Ratio ** 91.7% 85.6% 7.1% revenue). We aggregate the figures for their most recent Current year and prior year figures have been rounded up in this table and percentage published accounts (with year ends between April 2013 change is based on actual figures prior to being rounded up * Based on the number of current directors and March 2014), and then make a comparison using ** Gearing Ratio = (Long Term Debt + Short Term Loans – Cash) / Shareholder Funds previous year’s results to create a barometer of economic health for our region. Please note - we refer to the top 250 companies collectively as ‘the Group’ throughout the report and, as the Group’s composition changes every 12 what’s inside months, year-on-year comparisons may not be like-for- like. Welcome 01 The Yorkshire Powerhouse 02 Financial highlights 04 FD agenda 05 Business finance 06 M&A 07 Women in the boardroom 08 Tax 09 International 10 Education and skills 12 Innovation 13 Manufacturing 14 Food and drink 16 Transport and infrastructure 18 Technology and media 19 Retail 20 Meet the team 21 Company profile 22 The 250 Group 23 Basis of preparation 24 2015 | THE YORKSHIRE REPORT 1 The region has recovered well Welcome and is growing strongly, with cash in the bank, investment and employment all rising. Yorkshire’s vibrant economy is fuelled by businesses of all sizes, and to reflect this we have made some exciting changes to the report. For the first time, the Group is made up of the region’s Top And the future looks bright. All the major political parties are 250 companies. That means it now includes more mid-market committed to creating a ‘Northern Powerhouse’ and investing firms that are not only vital to the region’s success today, but in Yorkshire and the surrounding area. The Treasury has set could become the giants of tomorrow. a target to raise the long term growth rate of the north (currently around 3.7%) to equal that of the UK (4.2%). Even Yorkshire’s mightiest firms started off small and, as a champion of the mid-market, BDO is committed to providing But does this match the scale of our ambitions? We think we hands-on support to help local businesses grow successfully. can do more than just match that of the UK. To do this our The figures support this move, demonstrating that mid- report also suggests a number of policies that will deliver market firms are leading the way in many areas. Profits, growth. From zero-rating VAT on supplies to companies that overseas sales and employee numbers have all risen quicker export as well as investing in apprenticeships and skills, policy for mid-market companies than they have for the largest. makers can have a big impact on the future success of the region. So what’s the big picture? The region has recovered well and is growing strongly, with cash in the bank, investment and I hope you enjoy this report and it provides useful insights for employment all rising. The challenge is to leverage that cash you and your business. These are exciting times for Yorkshire to take the next step - grabbing those bigger opportunities businesses. that can accelerate growth and increase margin. TERRY JONES Lead Partner | Yorkshire 2 THE YORKSHIRE REPORT | 2015 TheYorkshire Powerhousea regional review It’s all happening in Yorkshire. The region PHASE TWO HS2 is bursting with new developments and Proposals of Phase Two of HS2 are expected to benefit economic promise. So much so, in fact, that Yorkshire with a new station at Leeds New Lane, slashing it can be hard to keep track. journey times to Birmingham to 57 minutes and London to 1 hour 23 minutes. While debate rages over the future of the Which is why we are summarising some of the top initiatives initiative, initial estimations predict that HS2 could boost and regional investments. Take a look at what is going on in South Yorkshire’s economy by up to £0.9bn every year and your neck of the woods… West Yorkshire’s by £1bn.3 NORTHERN POWERHOUSE The Government has cemented its commitment to building the ‘Northern Powerhouse’ to boost growth, prosperity and ensure our recovery is sustainable for the long term. Rumour has it that Yorkshire already creates more jobs than in the whole of France. We play a large part in building a northern economy that punches its weight in the world. With the aim of joining the northern cities together, Osborne is WESTFIELD’S BRADFORD DEVELOPMENT under pressure to invest £15bn in transport, infrastructure 2014 saw construction commence at Westfield’s £275m and science. Commitments have also been made to cut Bradford Broadway development, which is on course to journey times on trains between Leeds, Bradford, Sheffield, be delivered in autumn 2015, creating a vibrant new retail Manchester, Liverpool and Hull.1 destination at the heart of Bradford.4 MAJOR ROAD INVESTMENT Yorkshire is benefiting from £2.3bn in road investment which will transform the major corridors of the M1, M62 and A1, creating an estimated 1,500 construction jobs. The funding will see smart motorways extended westwards along the M62, crossing the Pennines to link Leeds and Manchester. This will be the first major increase in trans-Pennine capacity since 1971. The last non-motorway section of the A1 is to be upgraded between Redhouse and Darrington, reducing congestion and creating a new corridor to the North East.2 CITY REDEVELOPMENT Leeds City Council have approved plans to convert the former Yorkshire Post site on Wellington Bridge Street in Leeds which will provide around 50,000sqm of office floorspace, 200 homes and a range of other uses, including cafes, shops and leisure facilities.5 The Government has also pledged £3.7m for the renovation of the derelict police headquarters in Leeds, and £3.5m to Sheffield’s former Co-op store to create a six- floor business incubator and tech hub respectively. 2015 | THE YORKSHIRE REPORT 3 TheYorkshire Powerhousea regional review NORTH YORKSHIRE SOUTH YORKSHIRE TOP 250 BUSINESSES: 36 | TURNOVER: £10.3BN TOP 250 BUSINESSES: 53 | TURNOVER: £11BN • With over 55,600 businesses based in the area, 85% • Sheffield City Region is to benefit from a £180m EU employ less than ten people.6 funding programme which is designed to enhance • Tourism in York continues to go from strength to economic growth, create jobs and boost skills training in strength. 2014 was a record year for hotel occupancy the area.13 with 83% of hotel rooms occupied and the second best • The Sheffield City Region’s economy has an output of year ever for attractions with 3,057,079 visitors going more than £28.2bn.14 through the doors of York’s attractions.7 • In Sheffield, nearly 30,000 people work for themselves, • The York, North Yorkshire and East Riding Growth which equates to around one in ten people over the age Deal has secured £122.2m in Government funding of 18.15 which will support the LEPs ambition to become a • Plans for the first Advanced Manufacturing Innovation national and international centre for food, agri-tech District in the UK are moving forward in the Sheffield and bio-renewables as well as promoting business City Region, creating Europe’s largest research-led growth investment, infrastructure investment and skills advanced manufacturing cluster.16 creation. It is estimated that up to 5,000 jobs could be created and 5,000 new homes built.8 WEST YORKSHIRE EAST YORKSHIRE TOP 250 BUSINESSES: 132 | TURNOVER: £72.4BN TOP 250 BUSINESSES: 29 | TURNOVER: £8.4BN • The Leeds LEP agreed a £1bn Local Growth Deal in 2014 • The food and drink sector is one of the largest sectors with the Government to help accelerate economic in Hull and provides employment for around 45,000 growth and create new jobs across the region. The deal people across the Hull and Humber sub-region.17 includes £627m to deliver the LEPs Strategic Economic • The Port of Hull is one of the UK’s leading foreign- Plan and £420m to deliver the West Yorkshire Plus trading ports, handling in excess of 12m tonnes of Transport Fund.9 cargo each year and nearly one million passengers take • 66% of the world’s turbo chargers are manufactured in advantage of the ferries.