David Pattison

Almost two-thirds of the forklift companies in the United Kingdom are ripe for take-over, according to a new study.

Company valuation specialist Plimsoll Publishing has found that the industry is wasting GBP211 million (USD433,267,556) worth of profit every year.

The latest analysis of trading among the UK's 400 major players indicates that 22 companies are making a loss, 13 are losing money for the second year running and four made less than 3% return on investment.

Analysts interpret their results to indicate that 296 of the 400 companies covered would make more profit under new ownership, resulting in GBP211 million (USD433,267,556) extra revenue in the industry as a whole.

"At the moment, that money is being simply thrown away because of companies' failure to control their losses and manage their businesses more effectively," says David Pattison, the senior analyst on the project.

"These results prove just why the forklift trucks industry is currently hot with takeover talk and speculation about future ownership. It's certainly no surprise that trade buyers and private financiers are taking a close look at the industry - some of these ... businesses have huge potential that is not being realised at the moment," he says.

"We've heard a lot about private equity firms recently, and this is one industry where they could reap rich rewards."

Last week, Forkliftaction.com News reported that fund manager Fidelity International Ltd had purchased 2% of Italian forklift attachment maker Bolzoni SpA., raising its stake to just over 4%. (Forkliftaction.com News #318).

Using its proprietary analysis, Plimsoll identifies a number of strategies that could transform some of the struggling businesses.

These include cutting out unprofitable sales. In some cases, a 10% drop in sales could actually improve profitability, analysts argue.

Management is also urged to re-examine unnecessary stock levels and keep control of trade debtors to free up cash.

In addition, Plimsoll advocates reviewing productivity "to the point where sales per staff member are at least GBP140,000 (USD287,476)".