Forklift News - Report advocates cost reductions

Plimsoll predicts companies offering low-cost alternatives will survive 2009 PHOTO: SHUTTERSTOCK

UK forklift companies offering low-cost alternatives will be the ones to benefit and prosper in 2009, according to a report from Plimsoll Publishing.

The report, Plimsoll Portfolio Analysis – Fork Lift Trucks, says these companies will capitalise as businesses and consumers seek to reduce costs.
Despite the challenges facing the UK economy, the outlook for 2009 will be ‘exciting’ for most in the industry.

Profit margins in 2009 will be under pressure from increasing price competition, but if companies take action now to reduce costs and accept their current level of business activity, they can profit in the new year.
Plimsoll predicts sales will fall by as much as 30% in 2009.

Plimsoll has published a guide to help managers understand the impact falling sales will have on their businesses.  The Recession Edition Report shows how a number of companies would still be able to make profits on 30% fewer sales by implementing major cost reductions, including cuts of up to 40% in staff numbers.

David Pattison, senior analyst with Plimsoll, says companies need to prepare for the coming year, and  "to act now, if they are going to weather this storm".

With sales declining, it is possible as many as 1,500 jobs will be at risk as companies try to reduce costs in line with sales.

"As unpopular as job losses and cost reducing is, businesses will have little choice," he says. "What we have been able to show in our work is that failure is avoidable, as long as necessary changes are implemented without delay."

Next year will see businesses acting more responsibly when it comes to debt and borrowing.  The Plimsoll report predicts banks and institutions will tighten their lending policies. "If 2008 has taught us anything, it was using other people’s money to run your company is a risky business," Pattison says. "Finance directors and executives need to think carefully about their finance needs for the new year and plan early."

The coming year will see almost a quarter of company directors pass retirement age. Pattison says there will be a wave of significant retirements. "This will drive a number of noteworthy companies to consider their independence."

Despite the threat of job losses and cost reductions, Pattison says 2009 will be an exciting year. "It will be a time to choose your enemy wisely and going on the defensive may well be the best defence.

"The key is the successful targeting of weakened, low-margin and heavily indebted competitors; their failure will be vital to other companies’ success."

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