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Special report: Rising stars - the UK's hot 100 for 2013

Mark Leftly sees the finer things of life reappearing in the annual list of fastest-growing private businesses

Mark Leftly
Thursday 06 June 2013 19:59 EDT
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Asushi takeaway, a media bartering firm and a developer of historical homes feature in this year's Investec Hot 100, published by Real Business. Wasabi, Miroma International, and the City & Capital Group have little in common, but share one distinctive feature: rapid sales increases.

This is a hugely diversified list of the fastest-growing privately owned firms in the UK, and shows that with the right entrepreneurial spirit (and, no doubt, a clever business plan) that businesses can still thrive in the toughest of economic times.

The residential care group Potensial snaffled the top spot, its turnover having grown a whopping 146 per cent to more than £15.2m. The Merseyside-based winner narrowly edged out Altenergy, a solar energy specialist from London that saw sales grow 137 per cent over a four-year period.

Investec's Ed Cottrell says: "In a year when we have begun to see some green shoots of recovery, we have seen a less austere Investec Hot 100. [There is] a move away from more defensive industries such as gold traders and discount retailers that dominated the list in 2012 towards growth-oriented sectors and perhaps the more finer things in life."

Luxuries feature prominently in this list, the 15th, for which The Independent is the media partner. Take booze. Aston Manor Brewery cracked the top 50 and is the country's biggest independently owned cider maker. Every day, the Birmingham-based group produces a million pints of scrumptious scrumpy, including Frosty Jack's Cider and Kingstone Press.

At number 82 is Hills Prospect, a drinks distributor to the South-east and the Home Counties that saw sales rise 30 per cent to nearly £36.3m in four years. Its wine list is a vintner's delight of chablis, burgundy, Tasmanian red, and Chilean rosé, while there are also bottled ales, like Old Speckled Hen, and premium lagers, such as Asahi.

Some 83 per cent of the companies that were surveyed and are on show this year believe that the economy will improve over the next 12 months. More than half are looking to grow through international expansion and will attempt to break into the Latin American, Middle Eastern, Asian and Eastern European markets.

Three-quarters of the entrepreneurs will also be taking on additional full-time staff this year.

To see the Hot 100 list in full, visit: realbusiness.co.uk/p/20078

The unusual: Wild and wacky prove they can be fast as well

Britain's best businesses don't just trade derivatives or convert currency – all sorts of wild, wacky, and unusual ideas that have been turned into commercial successes.

TBA, ranked 40th on the list, is a creative agency that has worked on some of the world's most fabulous spectacles, including the Rugby World Cup and concert acts like the Stereophonics.

In an age where chefs are superstars and everyone seems to worry about the origin of their food, the poultry and fish supplier, Severn & Wye Smokery is booming. The Westbury-on-Severn outfit charged to the 29th spot after revenue grew by 39 per cent over four years to more than £25m.

The online bike retailer Chain Reaction Cycles proves that the knights Hoy and Wiggins have pushed people towards two wheels, as it grabbed 20th place with revenue of nearly £136.5m: that's a four-year compound growth of 50 per cent.

Best profits: Gambling companies show the route to growth

Gambling certainly pays for some: just ask the folks at the Stoke-on-Trent online bookie Bet365 Group. Canny bosses John and Denise Coates publish the website in 17 different languages, meaning that it attracts punters from around 200 countries.

And profit has skyrocketed to nearly £156m, the highest among the Hot 100 and a far cry from the business's early days when it was run out of a Portakabin.

The sibling owners learnt the trade from their father, who ran a chain of betting shops.

Another online gambling group to rank among the top five Hot 100 firms in terms of profits is the online bingo firm Gamesys. Around 4.3 billion cash bets and £4.1bn is wagered though the group's sites each year, bringing pre-tax profit to nearly £50m.

Ruffer Management, which runs funds for private clients and institutions, was in the runner's-up spot with Ebitda of £108.6m.

Best margins: Top four demonstrate that finance sector leads the way

If a budding entrepreneur has the ambition but not the idea, perhaps they should turn their attention to the investment industry.

This year, Ruffer Management, which runs funds for private clients and institutions, was the best-performing private company by margin at more than 82 per cent.

The company likens its work to "a pig hunting for truffles", which means that this porcine beauty is quite the hunter-gatherer. Still, it probably helps that Ruffer's management includes Sir David Clementi, a former deputy governor of the Bank of England.

Grabbing second spot is another financial firm, Tyler Capital, a 10-year-old derivatives trading specialist that has a 60.16 per cent margin. On a turnover of £12.9m the company's traders, analysts, quants and developers make earnings before interest, tax, depreciation and amortisation (Ebitda) of £7.7m.

Activtrades and Troy Asset Management complete the top four, a quartet entirely made up of firms from the finance sector.

However, gate-crashing in fifth is Cameron Mackintosh, making a margin just shy of 40 per cent. The London-based musical theatre group has produced some of the West End's most-loved ticket sellers, including Les Misérables and The Phantom of the Opera.

Geography: London's bubble gets even bigger but North-west's revival picks up

London is often said to be in its own bubble, economically distinct from the rest of the country. The Hot 100 shows that there's a lot of truth to this claim, as 49 of the companies this year were based in the capital and the South-east.

This is up from 43 last year, but what is concerning is the plight of firms in Northern Ireland, Wales, Scotland and the North-east. There were only a dozen companies from these areas, though the North-west proved a formidable challenger to the South with 18 firms in the 100.

The report says: "The BBC's Salford relocation and the ripple effect of the top Premiership clubs seem to be having an impact. As a whole, the North-west appears to be reviving as a great trading hub to complement the capital."

However, eight of the top 13 were still based in London – some might argue nine, given that 10th-placed insurance claims handler Parabis trades out of Croydon. The Big Smoke, then, remains the preferred home of the country's foremost business brains, which hints at a brain drain across many regions that can ill afford to lose their best and brightest.

Highest turnover: Some big companies just keep on getting bigger

The Hot 100 is usually characterised by the number of medium-sized firms in the list. However, there's proof that even huge businesses can keep on growing in the form of World First UK, a foreign exchange services giant that has revenue approaching £3bn, putting it at the top of the list in terms of turnover.

This is one of those basement to billions stories, as the former Citibank employees Jonathan Quin and Nick Robinson founded the business just nine years ago from a south London home.

The business has an ambitious target of growing at least 26 per cent per year. That might sound a little arbitrary, but mathematical whizz kids would have worked out that hitting that figure means World First should double in size every three years.

The broker Elkwienox again showcased the UK's almost unrivalled strength in financial services, after compound sales growth over four years of 69 per cent took turnover to a cool £1.5bn. That was also enough to earn the group 11th place in the main list.

Although discount retailers featured more rarely in the 2013 Hot 100, 99p Stores did register the 10th highest sales, earning a little more than £270m. The Northampton-based chain was founded in 2001 and now has 1.5 million customers walking into 200 shops dotted across the UK every week.

Famous previous entrants: List has a record of spotting future stars who have gone on to shine

People love lists, but ultimately many are of little consequence.

The Hot 100, though, has at least proved to be effective at identifying brands and businesses which have gone on to become part of the country's economic fabric.

Take EAT, the sandwich, salad and soup chain that is such a feature of London high streets and is now achieving real mass in other urban centres across the country.

The group featured in the Hot 100 11 years ago, one of several big names that comprise something of a "before they were famous" gang.

There was Carphone Warehouse in the very first list, which, it could be argued, has gone on to do rather well. The computer chip designer Arm was an entrant in 1998, Boden graced the list the following year, and Moneysupermarket.com was once accurately spotlighted as a rising star.

Between them, those five firms now employ around 8,000 people and make in the region of £6bn in combined revenue.

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