Plimsoll Publishing's latest research reveals struggling firms are seeing reduced ROI and a significant drop in pre-tax profit margin

Almost a third of the UK’s computer maintenance and repairs companies are struggling to break even according to analyst firm Plimsoll.

However two thirds are still delivering outstanding returns, Plimsoll claims. The analyst looked at the financial performance of each of the top 1000 UK computer maintenance and repair firms and analysed their latest profitability figures.

According to the research a third of the companies, none of which can be named, averaged only a –3.1 per cent pre-tax profit margin; this is down from last year when the average was 0.0 per cent. The owners of these companies are going through tough times with an average return on investment (ROI) of –12 per cent, down from –9 per cent last year. Also over one in five of these companies have reported a loss for the year and for 21 per cent of these companies this is now their second year of loss making.

David Pattison, senior analyst at Plimsoll said: “We are seeing from these numbers just how tricky the recent trading period has been for companies to return a profit, and how many are really struggling.

“Yet at the same time over two thirds of companies assessed seem untouched by recent cost increases and competitive pricing. They have been able to record fantastic results.”

This view is supported by the research. Over two-thirds of the 1000 companies surveyed make 70 per cent margins on average, and owners are enjoying a 39.9 per cent ROI. In addition, 16 highly profitable companies are enjoying their fourth consecutive year of profit growth.

Pattison added: “Losing money might not be a complete disaster for your company, but it is likely to cause long term damage as your investment is constrained and your ability to retain staff becomes compromised. These companies may well find that they will not be able to keep pace with those companies who have the profits behind them to finance investment.”