North West listed businesses suffer £1.4bn loss, says Deloitte

Chris Robertson, Head of PLC activity at Deloitte’s North West

The North West’s listed businesses have struggled in the opening quarter of 2016, with the combined market capitalisation declining by a total £1.4bn, according to Deloitte.

The total market capitalisation of North West companies dipped to £36bn in Q1 2016, following a turbulent start to the year on the public markets. The manufacturing slow down in China caused the FTSE 100 index to fall 2.4 per cent at the start of 2016, while fears over China’s economic growth disrupted public market trading globally.

The business advisory firm’s North West Share Index shows that the region’s largest businesses, those listed on the FTSE350 suffered combined losses of £1.24bn. In total, 10 of the 16 North West companies listed on the FTSE experienced market cap decline, with each company losing an average of 8.26 per cent.

Outside of the FTSE, losses by North West companies were comparatively less severe, falling by £231m. The value of these firms declined by 0.68 per cent, only slightly ahead of the FTSE All Share’s performance of 0.8 per cent over the same period.

Despite these figures, a number of the North West’s companies continued to perform strongly. In particular, Bolton-based online retailer AO World plc witnessed a 14.67 per cent rise, increasing its market cap by £96.4m. This follows the firm’s move into new markets this quarter, branching out into the Netherlands in March.

Online clothes retailer Boohoo.com also performed strongly, increasing its market cap by 20.96 per cent over the first three months of 2016. The firm recently acquired a property based on China Lane, Manchester, close to its head office, to expand its Manchester headquarters. Another notable performer is Dechra Pharmaceuticals, which added a total of £151m to its total market cap on the back of strong interim results and a strategic acquisition.

Chris Robertson, Head of PLC activity at Deloitte’s North West office, said: “Considering the huge global decline at the beginning of the year, it is unsurprising to see an effect on the value of the region’s companies this quarter. However, despite this, it is impressive to see many of the region’s businesses still performing strongly, with a large number experiencing double digit percentage growth.

“It has been a tough time for many listed companies, as market confidence is being affected by the possibility of a Brexit and the current economic slow down. Nevertheless, we expect to see the market stabilise in the near future, with North West companies bouncing back to reach growth levels they witnessed in the successful periods of 2015.”