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Takeovers predicted in heating contractor sector

Major heating contractors will acquire smaller companies in a bid to maintain growth as the economy slows, predicts Plimsoll. It has based its claims on research and analysis carried out on the sector.

Plimsoll says the top end of the heating contractors is the most congested part of the market, with 66 per cent of the total market shared by the top 15 players,

The research said: “As the market tightens the major players have started to review their strategic options. They will look at the emerging sectors within the market and target their acquisition strategies at a group of 160 high growth, high-margin players that are leading the industry.

“The major players need to establish their position in these markets quickly, despite the reluctance to spend cash. The penalty of not moving in now is too high for each of them.”

In overall terms, Plimsoll reports that the sales growth running at 6.2 per cent, which is up on the previous year. However, it predicts 2009 will see very little growth for most companies.

Plimsoll also argues that 74 of the firms it researches are heavily indebted, leaving them most at threat as the economy slows.