Researchers find South Wales SMEs thriving, with £900m turnover growth in three years
A group of 244 high-potential SMEs in South Wales has generated over £900m combined revenue growth in the last three years, according to new research by BGF, the UK and Ireland’s most active investor.
The research looks at growth in turnover and employees among the UK’s private companies with revenues between £3m and £150m, a category of 13,286 businesses nationwide, of which 389 are based in Wales. South Wales SMEs make up nearly two-thirds of Wales’s high-potential businesses, with 244 companies headquartered across Gwent, South, Mid and West Glamorgan.
These South Wales-based businesses have experienced 17 percent combined revenue growth in the last three years, compared to the UK average of 14.9 percent. 59 businesses in this group in Mid Glamorgan have experienced more than 20 percent combined turnover growth since 2015, the 4th highest in the UK.
These companies have also created 1,104 jobs over the past three years, taking total employment by this group to 42,601 employees across the region. Mid Glamorgan also boasts the UK’s second highest increase in employees over the last three years (16 percent), more than double the national average (8 percent).
Ned Dorbin, an investor at BGF, said:
“It’s encouraging to see such impressive growth among high potential businesses across South Wales. These companies represent activity, productivity and progress and it’s important that they continue to have access to capital to unlock faster and more sustainable growth. With more funding and support to help ambitious businesses accelerate, the impact on industry, the economy and society as a whole is significant.”
The data has been released as part of BGF’s ‘Ready for Business’ campaign, which will see BGF confidently advocate for continued growth, committing to entrepreneurs and investing in the age of uncertainty.
Cardiff-based DevOpsGroup accelerates IT modernisation through Cloud adoption and digital transformation for customers such as ASOS, RBS and Skyscanner. Following impressive development since the businesses was set up in 2013, DevOpsGroup received a BGF investment of £3m in April 2018 to support further growth.
James Smith, CEO of DevOpsGroup, said:
“We are proud to have our roots in South Wales, which has proven to be a fertile ground for our growth ambitions and seen us expanding our service offering across the UK.
“DevOpsGroup is proof that SMEs are in fact thriving during this time of uncertainty, creating more employment opportunities and significantly contributing towards the local economy.”
Commenting on the research, Professor Dylan Jones-Evans, assistant Pro Vice Chancellor for Enterprise at the University of South Wales, said:
“This study shows yet again that not only do a small number of companies create a disproportionate amount of wealth and employment in the Welsh economy, but that growth is occurring across a range of sectors and across all parts of Wales.
“More relevantly, their development is being supported by the emergence of a strong entrepreneurship ecosystem which includes critical components such as BeTheSpark to encourage greater enterprise and growth, BGF to provide access to finance, and the university sector to supply the skilled graduates demanded by growing businesses.”
BGF’s ‘Ready for Business’ report is available to download here. The research looks at publicly-reported data. Given current reporting thresholds, this group of companies is likely to be much larger – BGF’s proprietary database indicates that there could be an additional 4,000 companies, increasing the size of this group by 30%.
BGF, the UK and Ireland’s most active investor, was founded in 2011 specifically to address a long-standing gap in equity funding directed into companies that have outgrown friends, family or angel funding but are not typically large enough to be courted by traditional private equity. BGF has invested £1.9bn in more than 270 companies since 2011, three quarters of which are based outside London and the South East.