Squeezed margins threaten survival of many companies


Posted on April 1st, by editor in Caring Times. No Comments

Getting a pre-tax profit margin above “average” is proving harder given that the residential homes industry average of profit making has fallen from 8% in 1993 to a 1997 average of 6.6%. This represents a serious decline in pre-tax profit margins. However, becoming a top company in terms of pre-tax profit in the industry, and staying on top, is even more difficult. The latest Plimsoll Portfolio Analysis – Residential Homes, April, 1999 has found that of the top 50 profit makers in 1993 only 5 are now in the current top 50. Interestingly, the average pre-tax profit margin of these top 50 has stayed the same – 21% in 1993 and 21% in the latest year. Even though these are excellent margins, this finding seems to indicate that the best profit makers cannot increase their margins any more. Another finding is that since reaching the top 50 in 1993, seven of these companies have recorded a loss since that date. This is in line with the rest of the industry. Around half of companies analysed had made at least one yea





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