UK: One in three companies in the laundry and drycleaning sector could fail, according to a report produced recently by financial analyst Plimsoll.
The study looked at 651 top companies in the industry and placed each company in a category – strong, good, mediocre or danger – according to its financial performance over the last four years.
In arriving at the categories the report looked at pre-tax margin, debt as a percentage of sales and retained profit. Although 212 were rated as strong and a further 54 as good, 209 were listed in the danger category, and an additional 127 were classified under caution.
“I believe the laundry and drycleaning industry has too many companies chasing too little market,” commented David Pattison, Plimsoll’s senior analyst. “The companies rated as danger have been in decline for years. Many of these companies are at a stage where their debts are severely restricting the ability of the management to make even normal business decisions.”
