New research by MBH Corporation plc, a UK headquartered diversified investment holding company listed on the Frankfurt and Dusseldorf Stock Exchanges that acquires successful, well established small to medium sized enterprises across multiple geographies and sectors, reveals many SMEs in the UK share a positive outlook for the near future despite the continuing impact of Covid-19.
Some 12% of SMEs surveyed described the outlook for their business over the next two years as ‘very positive,’ with a further 40% describing it as ‘positive.’ By comparison, only 4% view their business prospects in the next two years as ‘very poor.’
How would you describe your outlook for your business over the next two years?
| How would you describe your outlook for your business over the next two years? | Very positive | 12% |
| Quite positive | 40% | |
| Average | 30% | |
| Poor | 12% | |
| Very poor | 4% | |
| Don’t know | 3% |
This positivity is further reflected in the number of SMEs expecting to make a profit or break even in 2020. The research shows 57% of SMEs expect to do this despite the pandemic, and 8% believe they will make a ‘big profit.’ Comparatively, just 12% of SMEs expect to make a big loss.
However, those companies predicting a loss in 2020 expect to return to profit in relatively short order with 16% anticipating being profitable again in 2021, and a much higher 46% by 2022.
As they recover and return to profit, the plans SMEs have for their businesses are ambitious with 32% looking to increase investment in their infrastructure (e.g. technology and buildings),23% plan to hire more staff and 31% intend to launch new products and services as the economy returns to health.
Callum Laing, CEO of MBH Corporation plc:
“ This research is really pleasing for us to see as it clearly reflects the optimism at play in the UK SME market and highlights the scale of opportunities available for investors here as these smaller companies can be nimbler and more innovative in responding to the challenges at play this year.”
MBH Corporation recently published its half year results for 2020, which revealed revenue growth of 31% to GBP27.4 million (1H 2019: GBP21.0million) and a stable net profit of GBP0.7 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 13% to GBP1.5 million (1H 2019: GBP1.3 million). (2)
MBH currently has 20 very successful and profitable small businesses in its portfolio and, as part of a continued growth drive, is looking to acquire more companies of a similar nature.
MBH targets well-established companies that are predominantly debt free, delivering around GBP0.5m-GBP10m EBITDA and are generally still run by their founders.
By leveraging its unique Agglomeration™ strategy, MBH can create substantial shareholder value through the consistent and accretive acquisition of excellent companies. With Agglomeration™, profitable companies convert their private shares into public shares or bonds in MBH Corporation plc in a perpetual earn-in model. Company owners are then incentivised to accelerate their growth trajectory using the resources of the plc including expertise, skill transfer of best in class practices, cross-selling to other group companies and where appropriate, zero cost funding for new growth projects.
Each group company retains its autonomy and follows appropriate corporate and financial governance. Business owners are also incentivised financially to enhance shareholder value through a share bonus scheme aligning their interests with public shareholders.
