Research report 2017 - Fast Track

Research report 2017

SME Export Track 100 research report 2017

Britain's small and medium-sized (SME) companies with the fastest-growing international sales

Sponsored by

1

i


CONTENTS

© 2017 SME Export Track 100

INTRODUCTION Top 10 SME Export Track 100 companies

1 1

EXECUTIVE SUMMARY Overview of the 2017 league table Key themes

2 2 2

KEY STATISTICS International sales breakdown Overseas markets Sector breakdown Industry breakdown Regional breakdown Staff and job creation Main ownership Foundation dates Brexit

3 3 4 5 6 6 7 7 7 8

KEY THEMES & SELECTED COMPANY PROFILES New exporters Building a distribution network Ecommerce Innovaton and R&D Targeting emerging markets Exporting for growth Emerging brands

9 9 10 11 12 13 14 15

2017 SME EXPORT TRACK 100 LEAGUE TABLE

16

METHODOLOGY Qualification criteria Research approach Disclaimers

20 20 21 21

SPONSORS & MEDIA PARTNER

22

ABOUT FAST TRACK Compiler & publisher The authors Fast Track

25 25 25 26

CONTACT DETAILS

26

fasttrack.co.uk


1

INTRODUCTION This is the third year of The Sunday Times SME Export Track 100, which ranks Britain’s one hundred small and medium-sized (SME) companies with the fastest-growing international sales over their latest two years. Lloyds Banking Group is the title sponsor, the main sponsors are DHL Express and Heathrow Airport, and it is supported by the government’s Exporting is GREAT campaign.

The No 1 company is naughtone, which makes contemporary chairs, sofas and tables to furnish Nike, Google and Amazon offices

SMEs are defined as companies with total sales of £5m to £25m in their latest year of available data; whereas, our International Track 200 ranks larger exporters with total sales of more than £25m. This year's league table reflects the importance of Europe and North America to SME exporters at a time of political uncertainty following Britain's vote to leave the EU and the election of Donald Trump as US president. Eighty-five of the companies sell to the continent, making it the most popular market, followed by North America (77). The 100 companies have achieved, on average, international sales growth of 72% a year over their latest two years of accounts to a total of £677m on combined total sales of £1.2bn. They export to all corners of the globe and employ more than 8,000 staff, having added almost 3,000 jobs over the last two years. Featured companies include emerging brands such as drinks manufacturer Fentimans (No 30), watersports equipment designer Red Paddle Co (No 51), hobby retailer Crafter's Companion (No 52) and footwear designer Butterfly Twists (No 83).

Top 10 SME Export Track 100 companies Rank Company [2016] Activity

HQ location

Annual int'l sales growth Year end over 2 yrs§

Int'l sales £000

Total sales £000

Staff Comment

1

naughtone North Yorkshire Furniture designer & manufacturer

May 16

279.0%

*†4,480

*†9,617

24

Its contemporary furniture features in Google's San Francisco offices

2

Duronic Romford Consumer products manufacturer

Oct 16

274.22%

*4,315

*10,789

45

Is planning to expand into the US, India and the Middle East Helps global banks to migrate their services to the cloud

3 Xceed [56] IT management consultancy

Central London

Nov 15 180.93%

10,131

20,239

141

4

October Films TV programme maker

Central London

Oct 15

175.12%

18,366

23,325

75

Opened an office in New York in 2014, helping it attract commissions from US TV networks

5

AerFin Aircraft & spares services

Caerphilly

Dec 15

159.17%

†9,264

†15,332

40

Last November it delivered a reconditioned Embraer 170 to Austrian airline People’s Viennaline

6

Quinshield Carmarthenshire Dec 15 Industrial building manufacturer

149.05%

3,218

8,546

101

Has made more than 23,000 glass-reinforced products since it was set-up in 1993

7

Stiltz Lifts Lift manufacturer

West Midlands

Dec 16

145.97%

*3,186

*8,370

100

Its freestanding lifts have been retrofitted into homes in more than 20 countries

8

Anthesis Consulting Group Sustainability consultancy

Oxford

Dec 15

135.23%

3,743

6,893

100

Has made ten acquisitions, including companies in Germany, Sweden, North America and the UAE

9

Holovis Special effects developer

Leicestershire

Jan 16

131.77%

8,603

10,286

61

Created a 3D virtual reality planetarium at the American Museum of Natural History in New York

Mar 16 129.27%

*4,789

*6,164

42

Apple sells its headphones through its stores and website

10

RHA Glasgow Personal audio product designer

§ compound annual growth rate in int'l sales between 2013/14 and 2015/16 * supplied by company


† annualised figure

fasttrack.co.uk


Growth in international sales

EXECUTIVE SUMMARY

Number of companies in each range of compound annual growth rate (CAGR) of international sales over the latest 2 years

Overview of the 2017 league table

3

100%–150%

14

75%–100%

12

50%–75%

33

30%–50% 200% 2 150%–200%

2

31

• The vast majority of companies (85) sell to mainland Europe, making it the most popular market, followed by North America (77) and Asia (37) • The top countries for overseas sales are the US (68 companies), followed by Germany (29) and China (18) • Manufacturing is the largest sector (50 companies), followed by services (43 companies) and retail (14)

5

• Consumer goods is the largest industry (23 companies), followed by engineering (15), media, entertainment & marketing (13) and technology & software (11)

Characteristics of a typical SME Export Track 100 company International sales Average growth over two years

72% pa

International sales in 2015/16 £6.8m International sales in 2013/14 £2.7m

Total sales Sales in 2015/16 £12.4m Sales in 2013/14 £7.5m

Staff Typical number of staff

25 – 100

Typical increase in staff over two years 12% pa

Company characteristics HQ region Sector

London (22), southeast (22) Manufacturing (50)

Founded 1988

Key themes New exporters: One third of companies have only recently started exporting or actively pursued export growth [page 9] Building a distribution network: A key route to market for 35 companies has been to build relationships with overseas partners [page 10] Ecommerce: 16 companies sell their products directly online, and by investing in ecommerce to reach new international customers [page 11] Innovation and R&D: More than half the companies have invested in product innovation or R&D, enabling them to build a niche and win business with multinational customers [page 12] Targeting emerging markets: Whilst the vast majority of companies (97) are primarily selling in conventional export markets in Europe or North America, some are also targeting non-traditional markets [page 13] Exporting for growth: For 27 companies growing exports have offset declining sales in the UK [page 14] Brand Britain: The league table features several brands that are becoming well known, both in the UK and overseas [page 15]


fasttrack.co.uk


3

KEY STATISTICS International sales breakdown • Companies on the league table are required to have total sales between £5m and £25m in their latest year, to have international sales of at least 20% of total sales, and to be profitable • The minimum average growth rate in international sales over the past two years to qualify was 28%. Actual international sales growth rates for the 100 companies range from 28% to 280% Payment hardware provider Miura Systems (No 23) had both the highest total sales and highest international sales on the table

Latest total sales

• 19 companies had triple-digit growth in international sales, which compares favourably with last year (23 companies) when the league table criteria did not require companies to be in profit

Number of companies in each range 10

£20m–£25m

• The 100th ranked company is medical device developer Medtrade. Its international sales grew 28% a year, from £11.1m in 2014 to £18m in 2016

20

£15m–£20m

30

£10m–£15m

40

£5m–£10m

Latest international sales

£15m–£20m

• Some companies made the vast majority of their sales overseas. They include Andusia (No 89), which ships 300,000 tonnes of waste a year to energy-from-waste sites in the Netherlands, Germany and Norway, and decorative plastics manufacturer McGavigan (No 77), which generated 97% of its sales overseas last year

1 6 13

£10m–£15m

36

£5m–£10m

• Payment hardware provider Miura Systems (No 23) had the highest total sales (£24.8m) and international sales (£21.4m). Data security software developer Foregenix (No 59) had the lowest sales at £5.2m • Combined international sales for the 100 companies were £677m and total sales were £1.2bn

Number of companies in each range £20–£25m

• The top-ranked company, furniture designer and manufacturer naughtone, grew international sales 280% a year, from £0.3m in 2014 to an annualised £4.5m in 2016

44

£1m–£5m

• Average operating profits are £1.4m. Of the companies that publicly disclose profits, the company with the highest profit margin is medical device developer Xiros (No 75), which made an operating profit of £3.6m on total sales of £10.9m

Top 5 companies with the largest international sales Company Rank Activity

FYE

Int'l sales £m

23

Miura Systems Payment hardware provider

Dec 15

20.2

77

McGavigan Dec 15 Decorative plastics manufacturer

18.8

October Films TV programme maker

Oct 15

18.4

Alba Power Turbine maintenance services

Dec 15

18.1

Medtrade Medical device developer

Feb 16

18.0

4 18 100


fasttrack.co.uk


4

Overseas markets • The vast majority of the companies (85) sell to mainland Europe, making it the most popular market, followed by North America (77) and Asia (37) • 48 companies focus their sales on one or two continents. However, more than 20 companies' markets are spread across four or more continents. For example, recyclable packaging manufacturer Vegware (No 50) has offices in Europe, Australia, Asia and North America PKL Group (No 20) provided temporary kitchen units at last year's Rio Olympics

• By country, the US is a major market for the most companies (68) followed by Germany (29), China (18) and Australia (18) • 35 companies have customers in one or more of the emerging markets, for example PKL Group (No 20) supplied temporary kitchen units to last year’s Olympics in Rio, Brazil. This theme is explored further on page 13

Main overseas markets of the SME Export Track 100 companies*

85

77

EUROPE

NORTH AMERICA

37 7 8

SOUTH AMERICA

AFRICA

22

ASIA

MIDDLE EAST

26 AUSTRALASIA

* map shows the numbers of companies targeting each market


fasttrack.co.uk


5

Sector breakdown The SME Export Track 100 companies operate in a range of sectors. Due to the breadth of their activities, 24 companies are considered to operate in two sectors. For example, Elstead Lighting (No 63) is both a light manufacturer and a wholesaler, as it distributes lights made by a US supplier across Europe; brush manufacturer Kent Brushes (No 87), also retails its brushes direct to consumers online.

Customers in India and Taiwan buy Kent Brushes (No 87) handmade brushes online

Sector breakdown

Construction 4 Retail 14

Wholesale 16

The largest sector is manufacturing (50 companies), followed by services (43). • Manufacturers (50 companies) include laser designer M Squared Lasers (No 78) and packaging maker Loadhog (No 37). This sector also counts 12 companies that outsource their manufacturing, for example Gymshark (No 41) has partner factories in China and Bangladesh to make its activewear clothing designs • Services (43) encompasses a wide range of industries, from special effects developer Holovis (No 9) to car dealership consultancy ASE Global (No 73) • Wholesalers (16) include Pet Brands (No 28), which supplies customers in 58 countries with everything from cat collars to bird feeders, and Highland Outdoor (No 74), which supplies 2,500 outdoor products to retailers across Europe • Retailers (14) include Butterfly Twists (No 83), which sells its shoes in 60 countries, and online bike retailer Merlin Cycles (No 98)

Services 43

Manufacturing* 50

• Construction (4): include M&M Contractors (No 24), an infrastructure services provider that specialises in subsea cabling, and building insulation developer Siderise Group (No 60)

Note: companies can operate in more than one sector. * includes 12 companies that outsource their manufacturing


fasttrack.co.uk


6

Industry breakdown

Industry breakdown

• Consumer goods is the best represented industry, with 23 companies (up from 17 last year). This category includes personal audio products designer RHA (No 10) and umbrella maker Grant Barnett (No 35)

Consumer goods 23

• Engineering also features strongly on the league table with 15 companies (up from 11 last year), including switchgear manufacturer Baldwin & Francis (No 68) and turbine maintenance firm Alba Power (No 18)

Engineering 15

Media, entertainment & marketing 13

• Media, entertainment & marketing is the third largest sector (13). It includes film and TV producer Angst Productions (No 56) and creative agency Pulse Group (No 92) • A further 11 companies are in technology & software, including IT reseller LA Micro UK (No 67) and cloud collaboration software developer HighQ (No 19)

Technology & software 11

Business services 9

Regional breakdown

Food & drink 9

The southeast is the most popular region for company HQs (23 companies), closely followed by London (21). The northeast (13 companies) and Midlands (10) are the next best-represented regions.

Healthcare 8 Automotive & transport 7

Regions with export strength in particular areas include:

Building-related 3 Other 2

–– Scotland, where all of the nine companies are manufacturers. Six own their manufacturing operation and three outsource to partners. They include Clyde Space (No 58), which makes satellites in Glasgow, and Edinburgh-based Vegware (No 50), which partners with factories in UK, Ireland and Taiwan to make its recyclable packaging

Regional breakdown of UK HQ

Scotland 9

Northwest

9

Northeast 13

N. Ireland 2

Midlands 9

The region with the lowest representation on the table is Northern Ireland, with two companies. They are County Tyrone-based CDEnviro (No 11), which develops recycling technology for customers in Europe, North America and Australia, and County Antrim-based subsea cabling firm M&M Contractors (No 24).

East 3

Wales 4

Southwest 7

–– London and the southeast are home to eight of the 11 technology & software companies. They include London-based HighQ (No 19), and Farnborough-based Exclaimer (No 95), which has over global 50m users of its auto-signature software

London Southeast

21

23


fasttrack.co.uk


7

Staff and job creation • The 100 companies employ more than 8,000 people, with typical staff numbers ranging between 25 and 100 • The largest employer is decorative plastics manufacturer McGavigan (No 77), which employs 324 people at its headquarters in Glasgow and bases in Japan and China. The smallest is film and TV producer Angst Productions (No 56), which has just 7 staff

Dilshad and Barinder Hothi have increased headcount at their training firm, The Knowledge Academy (No 81), by more than 100 people since 2014

• The companies have collectively increased their total staff by almost 3,000 over the past two years. For example, headcount at training provider The Knowledge Academy (No 81), topped 178 last year, compared to 76 in 2014

Number of employees

Main ownership

Number of companies in each staff range

• Entrepreneurs and founders majority-own more than half (59) of the companies. For example, Bridgend-based Siderise Group (No 60), is owned by non-exec chairman Steve Bond, who started the building insulation developer in 1972

10

>150 125–150

6

100–125 75–100

13

50–75

22

25–50

28

10–25