Yorkshire’s mid-market companies served up a £500m increase in profits last year, according to the BDO Yorkshire Report 2018.
The annual bellwether for corporate Yorkshire revealed an 85% rise in earnings after tax at the region’s 200 mid-market businesses.
BDO LLP, the accountancy and business advisory firm, said the achievement was due to operational effectiveness and commercial management.
The outstanding profit performance contributed to a 25% increase in dividends to £600m over the period.
Analysis of the top 250 companies, which includes the mid-market and the 50 largest firms, shows they are sitting on £7.2bn in cash reserves, an increase of 51% on the previous year.
Mark Langford, partner at BDO Leeds, said: “This is a sign of strength, but it is also a sign of uncertainty.
“There is lots of ‘dry powder’ money out there, in private equity funds, institutions and banks, waiting to be invested.
“We believe that uncertainty in the national and international landscape is delaying decisions in boardrooms.”
Business investment is seen as key for increasing productivity and ensuring long-term prosperity.
Langford pointed to the 15% fall in mergers and acquisitions activity over the last year as another sign of the cautious outlook.
The volume of deals fell to 467 from 547, according to the report.
The cautious outlook is also reflected in overall revenue figures, which remain broadly flat at £107bn for the top-250 list.
“Companies aren’t going for growth for the sake it,” added Mr Langford. “They have concentrated on operations instead. They are being as lean as possible. They are in a holding pattern."
International growth is the standout growth story; overseas turnover increased by 18% to £10.5bn among the 250 companies. Meanwhile, manufacturing is the standout growth sector, helped again by the weak pound driving up increases in revenue and profit.
Retail was robust and the leisure sector also grew, boosted in a large part by Hull City AFC’s year in the Premier League.
Langford said: “The Yorkshire Report 2018 shows the enduring strength and importance of the region’s mid-market in driving wealth and prosperity.
“They are creating value for shareholders and employing more than 150,000 people across Yorkshire and beyond.
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