Leanest companies driving the industry forward

Citation

(2000), "Leanest companies driving the industry forward", Aircraft Engineering and Aerospace Technology, Vol. 72 No. 6. https://doi.org/10.1108/aeat.2000.12772faf.010

Leanest companies driving the industry forward

Leanest companies driving the industry forward

Keywords: Plimsoll, Aerospace industry

The new economy of the aviation equipment industry will be driven by efficiency, according to the latest publication from Plimsoll, the Plimsoll Portfolio Analysis: Aviation Equipment, 2nd ed., 2000.

In its latest publication, Plimsoll provides a first-ever ranking of the most efficient UK aviation equipment companies. Analysing 816 companies, the highest scoring Top 50 are driving the industry forward in efficiencies scoring three times the industry average. These companies have created "lean" businesses with the most efficient use of capital. Anite Telecoms Ltd was named as one of the most efficient companies in the aviation equipment industry.

Plimsoll analysed companies on how effectively a company can turn their assets into sales and profits. Based on a combined measure of the return of sales and profits on total investment, the companies with the leanest assets and best profits scored the highest.

Plimsoll found that the variation in the size of companies within their Top 50 listing was immense. One of the biggest companies to make it in was Smiths Industries plc, with sales of £1.3 billion in their latest year. One of the smallest was J.S. Chinn Project Engineering Ltd with £1.0 million in sales. Despite their size, this company actually ranked 38 places higher than Smiths Industries plc in its efficient use of capital. It is not the case that bigger is better; indeed 16 companies included in the Top 50 have sales of less than £5 million.

Slingsby Aviation Ltd, with sales of £6.5 million, showed the biggest improvement in its use of capital. Currently ranked No. 28, this company has moved up 313 places from last year. Worthy of note were the 17 companies not included in the efficiency index due to their high cash reserves. If not for these reserves, companies like Vickers plc currently ranked at No. 61 would have been in at No. 19.

For the remainder of the aviation equipment industry aiming for the elite Top 50, conservative estimates suggest these companies will need to see sales increase by at least 27 percent. Don Turkington, managing director of Plimsoll Publishing Ltd said, "For most of these inefficient companies, consolidation, selling assets and reducing in size would be vital to compete in the future of the industry".

Of the 333 industries in the UK Plimsoll analysed, the aviation equipment industry ranked No. 100 overall. The radio industry, was ranked number one as the most efficient in its use of capital. Yet seven companies from the aviation equipment industry matched or bettered this top average.

A free listing of the Top 50 most efficient companies in the Aviation Equipment industry, as well as full analysis of 816 companies, can be obtained for £305 by calling Plimsoll. Tel: +44 (0)1642 257800; Website: www.plimsoll.co.uk