In Focus: Financial clout
Our Profit 50 feature, highlighting the area’s most profitable companies, always makes for fascinating reading but this year’s list - featured in the November issue of Midlands Business Insider – is especially interesting because it reveals which firms have made decent money during a recessionary period.
The sectors represented are broad and the regional giants such as E.ON, Next, Halfords and Severn Trent are all present as you might expect. But there are also some less familiar names such as Birmingham entertainment software firm Centresoft and plastic products packaging company Linpac, a new entry at number three in the list.
Perhaps the most discernible trend in the list is the strength of financial services firms. Birmingham insurance and pensions firm Phoenix Life tops this year’s Profit 50 chart having reported a pre-tax profit of £790.1m in the 12 months to year end 2009. Elsewhere, Stratford’s NFU Mutual is a new entry at number five in the list whilst Solihull mortgage company Paragon is at number 15.
Financial services dips under the radar somewhat when we talk about regional growth sectors but it is a very large employer in the West Midlands. A company such as LaSer UK in Solihull, for example, employs 650. I live in Solihull but didn’t even know it was there until fairly recently when I spoke to its MD Stephen Hunt.
LaSer UK, which is owned by global investment bank BNP Paribas and retailer Galeries Lafayette, provides credit cards, store cards and customer marketing programmes for many household name retailers.
The aforementioned NFU Mutual has 300 offices in rural towns and villages throughout the UK and an incredibly loyal customer base - some 93 per cent of general insurance customers renewed their policies in 2009.
Such companies provide jobs - often highly skilled jobs - in the area and prove that a different model is possible from having a smart head office on the high street and shipping all the back office functions to the Far East. Service and loyalty feature high up on the mission statement of these local firms.
They also seek little if anything in terms of government support and subsidy. All they require is a central location, good accommodation and a large pool of talented people to recruit from at reasonable labour costs. The West Midlands provides all of these things.
It offers real growth potential for this area - remember too that Brindleyplace in Birmingham is full of financial services back offices including one for Deutsche Bank, one of the city’s biggest inward investment wins in recent times. Solihull too is proving a popular home for these sorts of businesses.
If we are looking for the occupiers and inward investors of the future, financial services is a sector in which we can already demonstrate a winning hand.
