Avison Young’s UK company tracker
Q1 2024 bulletin
In 2023, the number of company expansions and acquisitions across the UK was higher than the number contracting, highlighting that there are corporate opportunities to capitalise on, despite troubled market conditions.
2023 key takeaways:
- 1302 companies acquired other businesses, 4% lower than 2022.
- 1646 companies expanded, which is 12% lower compared to the previous year.
- However, contractions were 104% higher year-on-year.
Despite the economic turbulence and uncertainty in 2023, the overall number of corporate expansions and businesses acquiring exceeded the overall number of companies contracting for a second consecutive year. But the turbulent conditions, namely persistent inflation, and rising interest rates, have driven a significant surge in corporate casualties. Our analysis confirmed both acquisition and expansion activity had decreased since 2022 (acquisitions were 4% lower and expansions were 12% lower than in 2023) whilst contractions were 104% higher year-on-year driven by the difficult market conditions. But which sectors have felt the most pain and who weathered the storm?
Across all acquisitions, the financial services sector saw the greatest level of activity, standing at 223 separate company transactions, growing on 2022’s total by 6%. Some significant deals included the acquisition made by HSBC of SVB UK and Irwin Mitchell’s acquisition of WJM. At the other end of the spectrum, acquisition activity across the leisure sector was 40% lower year-on-year, as the sector continues to recover and evolve in the post-pandemic era. When assessing expansions, the surprise sector was retail given the challenges that this sector continues to face. Despite contractionary activity measuring 93% higher than 2022 (the largest decline across all the sectors analysed) there was some positive news as the data showed 216 counts of expansions by retailers, largely led by discount supermarket retailers Aldi and Lidl, who continue to grow their portfolios. As the sector continues to evolve, battling ever-changing consumer behaviour, expansion appetite for some occupiers slowed (17% lower year on year) with many retailers reassessing their operational portfolios, by rationalising their estates.
In conclusion, sectoral challenges persist alongside stubborn economic headwinds which are dampening corporate activity. However, the fact remains the same that the number of company expansions and acquisitions has outweighed contractions in 2023. Moreover, where contractions have happened, most are not leading to administrations; and where there are casualties, this presents opportunities for opportunistic businesses to capitalise on. Looking ahead, we are cautiously optimistic 2024 will be a turning point for the market; one spurring confidence and tangible corporate and investment activity.
Across all acquisitions, the financial services sector saw the greatest level of activity, standing at 223 separate company transactions, growing on 2022’s total by 6%. Some significant deals included the acquisition made by HSBC of SVB UK and Irwin Mitchell’s acquisition of WJM. At the other end of the spectrum, acquisition activity across the leisure sector was 40% lower year-on-year, as the sector continues to recover and evolve in the post-pandemic era. When assessing expansions, the surprise sector was retail given the challenges that this sector continues to face. Despite contractionary activity measuring 93% higher than 2022 (the largest decline across all the sectors analysed) there was some positive news as the data showed 216 counts of expansions by retailers, largely led by discount supermarket retailers Aldi and Lidl, who continue to grow their portfolios. As the sector continues to evolve, battling ever-changing consumer behaviour, expansion appetite for some occupiers slowed (17% lower year on year) with many retailers reassessing their operational portfolios, by rationalising their estates.
In conclusion, sectoral challenges persist alongside stubborn economic headwinds which are dampening corporate activity. However, the fact remains the same that the number of company expansions and acquisitions has outweighed contractions in 2023. Moreover, where contractions have happened, most are not leading to administrations; and where there are casualties, this presents opportunities for opportunistic businesses to capitalise on. Looking ahead, we are cautiously optimistic 2024 will be a turning point for the market; one spurring confidence and tangible corporate and investment activity.
Figure 1 – All sector Activity
Source: Avison Young, UK Activity Report
Figure 2 – All sector index, Rolling 12-month
Source: Avison Young, UK Activity Report
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