27.6.2023 | Tax

Transport SME's report cashflow increase and overall confidence in the sector

A recent report has highlighted some good news for small and medium-sized transport businesses. 

A recent report has highlighted some good news for transport small and medium-sized enterprises.

‘An SME Recovery’ – a survey of transport SMEs from across the UK revealed growing expectations for cashflow to improve – leading to increased investment by businesses.

Cashflow to increase

Conducted for Paragon by Opinium, the research found that 45% of transport SMEs predict that their cashflow will improve substantially over the next three months, rising to 49% over the next six months and 51% over the next year. Though, only 23% of SMEs had seen their cashflow improve over the previous three months.

In other good news, it is felt that turnover should improve – 44% of businesses reported rising turnover levels during the first quarter of the year.

47% expect turnover to improve further during the second quarter, compared to 27% that expect a fall.

Investment boost and electric vehicles on the rise

That means that investment is on the increase, with 55% planning to maintain current investment levels and only 13% expected to reduce spending.

The renewed investment will also see the number of transport SMEs investing in electric vehicles rise from 18% over the last six months to 53% across the next six – the same proportion as those set to invest in traditional fuel vehicles.

Report’s investment stats:

  • Recruitment: 27% up to 51%
  • HGVs: 25% up to 53%
  • LCVs 20% up to 53%
  • Electric Vehicles: 18% up to 53%
  • Equipment: 13% up to 55%
  • Machinery: 13% up to 47%

Beatons Director Stephanie Hammond said the report by Paragon appears to signal lots of good news for transport SMEs, adding:

“This is just one survey, but overall the current climate for SMEs in the transport industry seems positive. This particular report shows that businesses are able to look to expand or at least steady the ship and move forward positively.

“Beatons is delighted to hear this but would advise diligence to all transport SMEs as they look for growth whilst balancing the books and remaining vigilant over their company’s health in the coming months.

“Increasing workforces and making investments are good business boosts, and your accountant can make sure that these steps are fulfilled economically and with future finances in mind.

“It’s important to ensure that your finance team are supported to make the right choices and safeguard the finances of the company for the future.”

Workforce boost and sector confidence

The report revealed that 29% of businesses are planning to recruit over the next six months, though 20% said they would have to reduce.

Overall, more than half of transport SMEs said they had confidence in the prospect of their businesses and the sector in general, though respondents did have concerns over smaller but key issues within the industry.

The UK economy still remains a concern, with just 39% reporting confidence in the country’s finances.

Seeking finance

As many as 44% of transport SMEs said they had sought additional financing over the last three months, with 52% of those businesses requiring over £100,000.

Stephanie Hammond said:

“Finance options are, of course, part of running a growing business, but it’s always prudent to ensure that any loans have been sufficiently calculated and that the business can cope with the demands of finance options.

“As you consider the growth of your transport SME, taking professional advice can be a sensible step, helping to identify strengths which will reassure that financing is right to help the business grow, but also to raise awareness of weaknesses and look at ways of improving and maintaining cashflow.

“Beatons is excited for the future of transport SMEs and looks forward to working with those who are the lifeblood of this vital sector to help further boost the health of growing organisations.”

For advice, please contact Beatons friendly team at info@beatons.co.uk or call on 01473 659777.