As the great American writer Mark Twain famously told us: “It’s difficult to make predictions, especially about the future”.
But while no one knows for sure what 2018 will bring, we at least have an inkling about where to focus our attention.
And that’s why Herald Business has singled out 18 businesses to watch in 2018.
We’re not saying they are the best firms in Plymouth or are going to have a stellar year, though, of course, they many of them will.
But they are all companies on the cusp of something big, or in sectors that are likely to have a tempestuous 12 months.
We’ve chosen one business per sector. If you think your business should be included in a subsequent list email: email@example.com
Devonport dockyard operator Babcock was booted out of the FTSE 100 in November 2017 – and replaced by takeaway app Just Eat.
The engineering giant saw investors quake at the prospect of potential defence spending cuts by the UK Government.
Perhaps there is no better bellwether for the Plymouth economy? It’s mainstay manufacturing company wobbles, while everyone is noshing away on fast food.
However, reports of Babcock’s demise may be premature. The company revealed, in its half-year report to the end of September 2017, a pre-tax profit of £181.9million – up a whopping 11.3 per cent from £163.5million a year before.
Revenue was also up, by 6.6 per cent, to £2,316.7million.
And the company, involved in building the carriers Queen Elizabeth and Prince of Wales, revealed an order book and bid pipeline of about £31billion.
Archie Bethel, chief executive, was upbeat and said there were increasing opportunities in the UK and internationally and Babcock had a long-proven ability to grow despite uncertain market conditions.
He said: “Our focus on technology-intensive critical services where barriers to entry are high has consistently enabled us to generate sustainable growth regardless of any decline in spending on original equipment.”
The construction firm has certainly been busy in Plymouth building the region’s tallest skyscraper and being involved in three other huge projects.
But with the £29.5million student accommodation tower at Beckley Point, the Derriford Research Facility at Plymouth Science Park, Plymouth Studio School, and the STEM building at City College Plymouth all being completed, will Kier be exiting the city?
The company has hinted to Herald Business that it is not done with Plymouth yet.
And with planning permission being granted for the £50million revamp of Plymouth Argyle’s Home Park, with a refurbished grandstand and ice arena priorities, industry sources say Kier is in the frame.
The company was linked with the project in 2013 when plans were first aired.
In 2017 Kier saw its annual pre-tax profit jump to £126million, up eight per cent from 2016’s £116million.
Revenue was up by five per cent too, to £4.27billion.
Kier employs more than 1,000 people across the South West, has its Plymouth base in Martin Street, and in 2017 revealed an order book worth £9.5billion.
The £20million takeover of Plymouth’s Sutton Harbour Holdings plc by FB Investors is likely to kick-start a bout of waterfront regeneration – and could make development of the former airport site more likely.
But first the company’s plan to turn the 113-acre former airstrip into a housing estate called Plym Vale must get past Government inspectors.
The examination in public of the Plymouth and South West Devon Joint Local Plan will start on January 30, 2018, and cover all important city developments – including the former airfield – due to be built between now and 2034.
SHH, long-lease holder for the former is airfield, expects an answer by “mid to late 2018”.
Meanwhile, its takeover deal means a proposed 10-storey high block of flats, bars and restaurants on Sutton Harbour’s waterfront, is closer to becoming reality because shareholders also approved the creation of £2.75million in new shares for FB Investors, which will now plough £2million into the skscraper project.
If the company is allowed to develop the airport site, it may then sell its lease and divert cash into its Plymouth waterfront assets.
Plans for a nine-floor block of luxury flats, called Harbour Arch Quay at Sutton Harbour’s North East Quay, have already been submitted to Plymouth City Council.
There are also plans for a £3million Boardwalk project, from near the Three Crowns pub along Vauxhall Quay towards the Sutton Harbour Marina, which has planning permission is still awaiting consent from the Marine Management Organisation. A decision is expected in 2018.
Also on the to-do list for SHH is redevelopment of land around Plymouth Fisheries, envisaged to become a restaurant-led tourist destination similar to Australia’s famous Sydney Fish Market.
SHH saw its pre-tax loss grow to £702,000 for the six months to September 30, 2017. This worsened from the £38,000 loss made in the same half-year period in 2016. Revenue was also down, to £3,473,000 from £3,633,000 a year earlier.
The firm’s debt pile has increased too, with net borrowing now standing at £22,965,000, up from £22,458,000 recorded at the end of March 2017.
Millbay-based practice Architects Design Group has been responsible for many of Plymouth’s most outstanding buildings – but must face 2018 without one of its founders after Ian Potts retired at the end of 2017, following 32 years at the company.
But it will soldier on under co-founders Marc Nash and Phil Burgess, and will be involved in some highly important Plymouth projects.
The company has already come up with designs for the nine-storey Harbour Arch Quay, which if approved will sit in between Pinnacle House and Salt Quay House, on Sutton Harbour’s North East Quay.
ADG has also designed the forthcoming £7million factory extension at Plymouth’s HellermannTyton plant, after the firm saw a 60 per cent growth in business in the past two years and now needs more space and staff.
It is understood ADG is involved in another huge city project, yet to be revealed.
These new buildings will add to a portfolio which already includes the Fish Market, at Sutton Harbour; the Sherwell Centre, North Hill; Plymouth Foyer, Stonehouse; the Azure apartment complex on the Hoe, Berkeley Square, Plymouth University’s Peninsula School of Dentistry, at Derriford; the Gaia Spa at Boringdon Hall Hotel, and the £13million Regional Centre of Excellence for STEM at City College Plymouth. ADG has also been involved in delivery of the master plan for the regeneration of Mount Wise.
Three hundred call centre jobs are being created in Plymouth by outsourcing giant Sitel in January and February 2018 as the firm strengthens its new base in the city.
The jobs are on a short-term contract, but Sitel stressed “other opportunities” are likely to arise for workers in 2018.
The new workers will join 500 staff already at Sitel’s huge contact centre base at the Ship, the former home of The Herald, in Derriford.
Those people are working on a contract to supply customer service support for up-market department store chain John Lewis.
The new contract is with a FTSE 100 company, one of the largest firms in the UK, but the name is being kept under wraps at the moment.
US-headquartered Sitel inked a 10-year-deal to lease the former office section of the Ship in September 2016. The contract, which took more than a year to finalise, was thought to be Plymouth’s biggest inward investment in more than a decade.
IThe past two decades have been boom times for the outsourcing sector in the UK and globally, with the annual value of contracts worldwide growing to $US37billion in 2016 from $US12.5billion in 2000.
The world market is expected to rise again in 2018, but in the UK there are fears it may hit a Brexit-related wall. In December 2017, Serco, another outsourcing giant spotlighted strong growth in overseas markets was offsetting slower prospects at home – because of Brexit.
It warned Government cutbacks and political uncertainty were responsible for the UK market growing at a slower rate than elsewhere.
Department store chain Debenhams is a cornerstone of Plymouth’s city centre – but for how much longer.
The retailer nationally saw share dip 15 per cent in the first week of January 2018 after it warned annual profits would be lower than expected because of disappointing trading over the vital Christmas period.
The retailer revealed underlying pre-tax profits were now likely to be between £55million and £65million this year. Analysts had been expecting profits to be about £83million.
Like-for-like sales in the UK fell 2.6 per cent in the 17 weeks to December 30, 2018 amid a “volatile and competitive” market.
Though the company has never said it has any plans to close in Plymouth, that hasn’t stopped speculation about the future of such huge department stores, as they are assailed by online shopping, out-of-town retail parks, static wages affecting demand, and Brexit-related incoming cost hikes.
In November 2017 it was revealed Debenhams was planning to close two town centre stores, and similar large retailers Alders and BHS have already disappeared from the high street.
Debenhams profits tumbled by 40 per cent in 2017 – but there was a spike in online sales perhaps enticing the retailer to view that as a more lucrative area.
And in 2017, Nick Holman, respected head of dispute resolution at Vickery Holman, in Plymouth, speculated that huge blocks of city centre shops, including the likes of Debenhams and House of Fraserdepartment stores, could be ripe for demolition and redevelopment.
He said the buildings could be torn down and replaced with a more modern scheme which could see people living above shops and said similar projects had been carried out in other cities, pointing to Exeter’s Princesshay, which was knocked down and rebuilt as a new shopping centre in 2007.