Plimsoll Provides Guide to Surviving a 30% fall in Sales

Given the very real possibility that any of the UK’s 1000 telecommunications services companies could see their sales fall by as much as 30% in 2009, analyst firm Plimsoll has published a guide to help managers understand the impact this would have on the market and how each individual company would react.

The results show that, rather bizarrely, for many companies, a fall in sales would actually be good news. These firms would make more profit, be able to reduce their debts and it would put many on to a solid financial footing, a platform on which to prosper when business conditions normalise.

The latest Recession Edition Report shows:

– 197 companies would make more profit on 30% less sales, by implementing major costs reductions.

– 236 firms will struggle to cope as rising debts hamper their survival options

– Several companies could see staff numbers reduce by 40%, as costs come in line with sales. Up to 5000 more jobs could be at risk.

– 350 cash rich companies are in a strong position to weather the economic storm, giving them more time to adjust their business models.

Within the Recession Edition Report, each of the 1000 companies has been given a survival year strategy. Included with this is a targeted set of key performance indicators for productivity, debts, profitability and cash flow. A full graphical analysis highlights the changes each company must make to minimise the effect of the falling sales.

David Pattison, Senior Analyst with Plimsoll with 20 years experience, saw how Telecommunications Services companies coped through the last recession. “Companies need to act now, if they are going to weather this storm. As unpopular as job losses and cost reducing is, businesses will have little choice. What we have been able to show in our work is that failure is avoidable, as long as the necessary changes are implemented without delay.”

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