FPE Capital Smaller Company Growth Survey 2018 shows companies strongly positive on growth, hiring and investment

FPE Capital UK Smaller Growth Company Survey 2018

A study commissioned by FPE Capital (“FPE”) and carried out by research students at the Cambridge Judge Business School

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A study commissioned by FPE Capital (“FPE”) and carried out by research students at the Cambridge Judge Business School provides insight into business sentiment within high growth businesses on their current opportunities, challenges and issues.

The Smaller Company Growth Survey highlights that sampled companies demonstrate strong confidence in their growth prospects – with over 85% of respondents “very confident” about the year ahead and their prospects. 53% are planning to grow their employee base at a faster rate than last year, and 59% are planning to increase their internal investment at a faster rate than last year.

Against this positive backdrop, the survey isolates recurring themes and also some clear divergences of opinion. Companies were asked to identify their top 3 challenges in the current market, with Brexit only coming in third.

One issue highlighted by the majority of sampled companies is the shortage of developer skills for technology enabled businesses.

Typical of the innovative approach being taken by growth companies to address this issue is the strategy used by Cirencester based human capital management (HCM) software business Kallidus, an FPE portfolio investment. Kallidus continues to invest significantly in its technology in the highly attractive HCM sector.

Following investment from FPE, Kallidus has recruited a new CTO and built its technology and product development team aggressively from 26 to 42. Operating in a locality with a constrained skill pool, Kallidus invested in a satellite office in Bristol to access younger technology talent (now employing 9 staff) and has grown a major operation in Bulgaria, with 8 dedicated employees.

Kallidus’s CEO Rob Caul emphasised the importance of these developments:

“We had pretty much exhausted the local market, so these new offices in Bristol and Bulgaria have been key to driving our growth and technical expertise. As the economy has seen higher employment so skilled tech developers have become less willing to travel long distances to work – so we have gone to them.”

The next two most pressing issues highlighted by the Survey were the availability of finance/funding for growth, and macro-economic factors, of which Brexit risk was the most often referenced. And despite the technology driven nature of many of the businesses questioned, that old bugbear of business rates produced the most emotional responses.

David Barbour, Managing Partner of FPE Capital said of the Survey:

“We have been focussed on helping smaller UK companies with their growth and expansion since 2008. This has given us a privileged view of the changing attitudes and concerns of founders, entrepreneurs and management teams with high growth companies across the last ten years, from the credit crunch through to the current more positive economic environment, albeit tempered by the imminent prospect of Brexit.

“Whereas many surveys focus on quantitative statistical outputs, we have rather sought deeper insights through lengthy one to one interviews with a range of founders, entrepreneurs and CEOs within growth companies.

“I am therefore delighted that confidence amongst the companies in our Survey is so high, but equally that we have been able to give the companies in this key part of the UK economy a voice to express some of the less reported issues they face.”

ENDS

For further information, please contact:

For FPE:

David Barbour, Managing Partner, FPE Capital +44 (0)20 3912 8801

Kelsey Traynor/Patrick Hanrahan, MHP Communications +44 (0)20 3128 8100

FPE Capital LLP is a growth-focused private equity investor in the UK lower mid-market. It targets businesses with recurring revenues that offer significant growth potential in large markets undergoing structural change. In October 2017 it closed its latest fund at £100m. It is authorised and regulated by the Financial Conduct Authority. www.fpecapital.com