UK resellers are riding the storm

Two out of five UK resellers are in a “strong” position financially after upping their game in response to the recession, according to Plimsoll.

The analyst ran the rule over the UK’s top 1,000 ICT resellers and awarded 375 – or 38 per cent – its top rating for their “outstanding performance”.

On average, members of this elite boast profit margins of 3.8 per cent and have seen their sales rise by three per cent. They are typically operating debt-free.

David Pattison, senior analyst at Plimsoll, said: “These firms have really upped their game in these difficult times and they are concrete proof that necessity is the mother of invention.”

Some 140 resellers – 14 per cent of the total – were handed a rating of Good. A Mediocre rating was awarded to 193 firms (19 per cent), 118 (12 per cent) were given a Caution rating, while 17 per cent are languishing in the Danger zone, meaning their very survival is in question.

Pattison expressed concern over the 292 firms rated as Caution or Danger.

“Their management are now operating under severe financial pressure where even normal trading is proving hazardous,” he said. “Many of these firms seem likely to be sold off; they are at an extremely high risk of failure unless they turn their performance around fast.”