Northern Ireland is home to a large number of successful private sector businesses. Recent accounts, reflecting business in 2019 and early 2020, show a continuing rise in the profitability of key businesses. Before the onset of the current recession as a result of the coronavirus pandemic and lockdown, the larger profit earners had enjoyed a four-year period of improving results.
The outstanding features of this update of the 100 most profitable businesses are:
The continued improvement in profitability until early 2020
The emergence of new information on the profitability of investments in renewable electricity generation
The evidence of the more profitable Northern Ireland businesses has been taken from accounts registered prior to August 15 this year. These accounts are lodged over the course of the year and within 10 months of the closing date of the accounts. Consequently, as the evidence for the Top 100 was collected in mid-2020, much of the latest financial evidence relates to trading years ending in 2019 or early 2020.
Companies have been placed in the Top 100 because they were one of the businesses earning the highest levels of pre-tax profit though other performance indicators are used elsewhere.
The pre-tax profit figures include any exceptional items specified in the profit and loss accounts. Where several companies, or subsidiaries, were owned by the same shareholder(s), the list of the Top 100 uses the consolidated group results. If practical, the editing process has added together the several businesses in a group.
The cut-off point to qualify for inclusion in the Top 100 is easily defined. When our records of the performance of local businesses are arranged in rank order of profitability, the 100 with the highest pre-tax profits are listed. Consequently, because a single performance indicator is used for selection, some well-known companies currently with more modest annual pre-tax profits fall just outside the lower limit.
Year by year, the minimum level of pre-tax profit for inclusion in the Top 100 has been rising:
2017: £3.2m, up 39%
2018: £4.2m, up 31%
2019: £4.4m, up 5%
2020: £4.9m, up 11%
The fact that the increase in the level of pre-tax profits to qualify for inclusion has been rising faster than inflation confirms that, for the more successful local companies, business has been improving, at least before the impact of the pandemic in 2020. There is a large number of businesses with results falling close to the cut-off point at £4.9m. Another 13 businesses earned between £4.0m and £4.9m. Two of that group were part of the Top 100 last year when their profit results were marginally higher in 2018 than more recently.
The published pre-tax profits figures show that in the most recent trading year, typically, the average business in the Top 100 increased their profits by over 12%. They produced a wide divergence in the trading outcomes.
Businesses making the largest contribution to incomes
14 more than doubled their profits. Three moved from loss making back to profit
18 gained an additional 0 – 9%
13 gaíned an additional 10-19%
10 gained an additional 20-39%
13 gained an additional 40-99%
29 reported a profit reduction
Names new to the Top 100 include energy-related firms EP, which is the new owner of Kilroot Power, GNI (UK), trading as Gas Northern Ireland, Greencoat, a UK-wide wind farm owner and NTR Energy, also a wind farm owner. EOS IT, specialising in video networks, and MRP Land, a property development company, are also new entries.
Other new arrivals include locally registered businesses whose results have improved, including timber processor Balcas, hotel group Beannchor, BSG Civil Engineering, Cooneen by Design, Foyle Food Group, Germinal Holdings and construction groups Northstone, PJ Conway and Gilbert Ash.
And 24 names have disappeared from the Top 100 although they are still significant trading entities. Golden Vale, which trades across Ireland, did not publish (as far as we are aware) figures for their business in Northern Ireland. Nor are Northern Ireland figures available for the banking group AIB.
Two businesses disappeared from the list as they now operate as part of the Breedon construction group after they were sold by the former Lagan Group. And there are 14 of the 24 who are still trading profitably having recorded profit figures below the qualifying minimum of £4.9m. For businesses which did not qualify this year, one feature is noteworthy. No business, included last year, has closed. Many have earned smaller profits, or profits which were below the new minimum qualifying figure, but there have been no closures.
A summary of the year:
The headline grand totals
The 100 local businesses which recorded the highest pre-tax profits produced the following aggregate results:
Total pre-tax profits £1,802m
Total adjusted for 1 major exceptional result:£1,715m
Total adjusted profits a year ago: £1,618m
Profit increase, after adjustment: 6.0%
Profit increase, without adjustment: 17.0%
Employment this year: 72,358
Employment last year’s review: 80,190
Employment change: 10%
Businesses coping with unusual conditions
Compiling the evidence from the recent annual reports of many businesses has shown many similar cautionary statements on their expectations as they cope with Covid-19 and Brexit. The statements below are taken directly from typical annual reports but have a more general application for the anticipation of developments in 2019, 2020 and 2021.
 A manufacturing business
“The group is acutely conscious of Covid-19 risks and is fully compliant with all HSE requirements and procedures for the workplace. In addition where possible any employee who is able to work from home does so. Risk assessments and policies are updated continuously to ensure that we provide the highest level of safety for our employees.
“The group has seen a downturn in demand across most sectors to which we initially responded by reducing output through utilisation of the Government’s Statutory Retention Pay Scheme. The group has however been able to re-purpose equipment and resource to manufacture critically required PPE for the NHS. This has helped to bridge the shortfall in revenues and has also enabled the majority of the workforce to be re-engaged….
“The group secured a Coronavirus Business Interruption Loan to ensure that cash reserves are available through this difficult period. It has not been necessary to use these funds as yet and they will be repaid in due course.”
 An engineering business
“The financial statements of the entity have been prepared based on continuing activity. The activities started to be affected by COVID-19 in the first quarter of 2020. The entity has continued normal operations throughout this period, manufacturing products considered essential during the pandemic. This major crisis constitutes a post-closing event, with no impact on the value of the company’s assets and liabilities in the accounts at September 30 2019. However, given the recent nature of the epidemic and the measures announced by the government to help businesses, the company is not able to assess the potential quantified impact. … management is not aware of any material uncertainties that call into question the entity’s ability to continue as a going concern.”
 A manufacturing business
“At the time of writing this report it is unclear how the future relationship with the EU will be structured or how the Northern Ireland Protocol will operate. Indeed, it also appears uncertain that the UK will leave at the end of the transition period at December 31 due to the Covid-19 crisis. As a result, it is extremely difficult to plan for the implications of the new structures.
“Further contingency plans will be drafted to mitigate risks and challenges as the impact of Brexit becomes clearer.”
 A food processor
“The current situation with regards to Brexit creates some uncertainty for the group and company, although with relatively low risk. The Group and company are in a strong position to react quickly at the appropriate time when the future UK/EU relationship becomes clear, in order to provide the highest level of services to our customers.”
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