Shaw & Co launches its first 'Shaw Report' which analyses the energy & natural resources sector. It follows the recent publication of the same analysis of the technology, media and telecoms sector.
Shaw & Co, the specialist corporate finance advisory firm, has launched the fifth in a series of 12 in-depth sector reports that offer an industry’s SME business leaders a powerful benchmarking tool to aid their decision making.
The fifth report covers the Energy and Natural Resources sector (E&NR) marketplace and segments nearly 900 businesses with earnings in excess of £1m by size and subsector to track their performance, profitability, debt levels and M&A activity.
“The numbers for the UK Energy and Utilities subsector show a reasonable sales and margin performance."
Alexei Garan, Head of Debt Advisory, Shaw & Co, and editor of the report said: “The numbers for the UK Energy and Utilities subsector show a reasonable sales and margin performance. However, there have been large number of bankruptcies in the subsector and, thanks to continued volatility in global energy prices, yet more companies are likely to falter.
“That some of the largest companies in the sector are focused on renewable energy or sustainable resource recovery is encouraging, but these are still too few in number which highlights the huge task faced by the UK in fully transitioning to a more sustainable economy.
“In terms of borrowing, despite the commodity market driven cyclical trough in earnings within the Energy and Oil & Gas sectors, high leverage levels in these segments are uncomfortable for the lenders. This is exacerbated by the political and public pressure on the lenders to the sector to cut support for fossil fuels, which is only set to increase.
“Finally, with regards to M&A activity, the market is highly buoyant, but it is the general fragility of smaller companies in the sector, resulting from high levels of debt, that presents opportunities for even higher levels of M&A activity.”
A full copy of the report is available for free download here.
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