Chief executive and financial officers of mid-market businesses expect securing finance to become easier during the next year with technology, media and telecommunications (TMT) the most bullish sector, a poll finds.
Chief executive and financial officers of mid-market businesses expect securing finance to become easier during the next year with technology, media and telecommunications (TMT) the most bullish sector, a poll finds.
A survey of 150 CEOs and CFOs from UK-based mid-market companies with revenue of between £25 million and £250 million shows that 55 per cent expect the financing environment to improve, while 31 per cent say it will remain static and 14 per cent expect it to deteriorate.
But according to the study, ‘The Finance Flow’, compiled by Grant Thornton, when asked when improvement will be felt, almost one third (31 per cent) of respondents report that they do not expect to see any improvement until the second half of 2012 or later.
Of all the sectors, TMT was the most optimistic about securing finance for their activities. More than three quarters (76 per cent) of decision makers in the sector expect to see an improving financing environment, while only 5 per cent expect it to deteriorate and 19 per cent expect it to remain static.
By contrast, only 47 per cent of respondents in the retail sector expect the financing environment to improve in the next 12 months, compared to the past 12 to 18 months. One in five (23 per cent) see it deteriorating while 30 per cent expect it to remain static.
‘Many mid-market firms in the UK are still very defensive when it comes to pursuing growth opportunities. This is partly due to their lenders being so cautious, leaving businesses reliant on internal cash to stagger on,’ says Wendy Hart, corporate finance partner at Grant Thornton UK.
Overall, most company leaders will seek finance for working capital, which is followed by capital investment and acquisitions.
The study showed that of the 45 per cent of respondents that did not expect to see an improving financing environment this year, 37 per cent expected to see an improvement in the second half of 2012 and 33 per cent did not expect conditions to improve before 2013. This means that 31 per cent of all respondents don’t expect to see any improvement before the second half of 2012.
The survey also showed that the number of respondents planning an initial public offering on the stock market has jumped to almost 9 per cent compared to only 1 per cent a year earlier.
