Thursday, 25 July 2013

Your annual report – what it tells the buyer, if you allow it...

Last night we downloaded the latest annual report (2013) of a medium-sized UK food supplier from Companies House, and extracted the following:

                            2012          2011                  Buyer’s reaction:
                            £’000         £’000
Sales                   65,000       55,000  +18%     “We helped, how about a discount?”

Net margin          8.5%          9.1%                  “Double our 4.3%, we need more…”

Stockturn             21 times     19.6 times         “...helped by our forecasting/efficiency, gimmee”
(i.e. days stock     17 days      18.5 days)   (potential lapses in availability = deductions opportunity?)

Trade debtors       56 days      56 days           “...we pay you in 46 days, we want 10 extra days”

Trade creditors     39 days      26 days          “this shows you are now taking 13 days extra to pay
                                                                       for ingredients, to cover cost increases!”


Incremental sales for each
£1k trade spend = £11,7k                       “Your large net margin means you can afford to invest more”

Return On Capital Employed
                                22%          25%       "Compared with our struggle to hit 11.5%, you guys have it easy"


*****NB. In-use demo here will connect you to a scenario treatment of the buyer-seller dialogue in practice!


This is just for starters!
If you feel that your team might benefit from a live run-through of your open domain figures at Companies House, and their application in negotiation, why not email me on bmoore@namnews.com, or give me a call on 07977 273409?

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