Over 200 UK hardware businesses could be at risk of financial collapse according to analyst firm Plimsoll.
The financial think tank studied the financial performance of 1500 UK computer hardware businesses and discovered 209 companies rated as ‘danger’, meaning they are suffering from low and declining margins and uncontrolled rising debts.
At the other end of the scale 524 hardware companies rated as strong, equating to 35 per cent of the total questioned, with 301 companies in the ‘caution’ bracket, 277 in ‘Mediocre’ and 189 in the ‘strong’ bracket.
David Pattison, senior analyst at Plimsoll said: “The simple message is change or risk failure. At these high risk companies, the managers need to act quickly to get their firms back on a decent financial footing.
“It seems inevitable that we will see a period of consolidation. Job losses and certainly cost cutting are essential if these companies are to survive. Personally, I would not rule out a series of takeovers. Most of these companies are blissfully unaware of how exposed to acquisition they are.”
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