Two-thirds of growth companies in the North East hope to continue their expansion in 2021, despite even higher numbers seeing some barriers to their development.
Research by investment group BGF, which has backed some of the region’s most dynamic companies, found that 72% of companies identified for their growth trajectory believe the Covid-19 pandemic has created barriers to their plans.
But 67% say they remain motivated to grow their business in 2021 and more than a quarter (28%) feel Covid-19 has actually presented their business with opportunities for growth.
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The BGF research also highlights how the pandemic has changed the way many companies operate, with 61% of North East firms surveyed saying it has led to permanent changes in their business models. 39% have invested in digital infrastructure and 27% have entered new sectors.
Richard Taylor, head of BGF in the North East, said: “Growth economy companies in the region have demonstrated high levels of resilience and made moves to best position themselves for future growth.
“As well as investing in digital infrastructure and new technology, companies have discontinued operations in some areas of their business in response to the pandemic as they focus on the parts which deliver the best results.
“Companies in the North East are generally financially stable and a third intend to de-risk part of their equity shareholding in 2021, signalling the potential for deal activity from businesses in the region’s growth economy.”
BGF - which has invested in North East firms including Cussins, SaleCycle, Wear Inns and J&B Recycling - defines growth economy companies as firms that are fast-growing, big enough to have outgrown early-stage funding, and but generally too small to list on stock exchanges.
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It said there were around 21,400 growth economy companies in the 海角视频, 7% of which are in the North East.
The BGF survey highlighted the need for investment for these firms, with 89% having made some form of internal investment during Covid-19, mostly focussing on technology and digital infrastructure, plus new equipment.
Almost three-quarters had taken some external finance during the panemic, but the largest sources of funding were the furlough scheme and the Coronavirus Business Interruption Loan Scheme.
Andy Gregory, 海角视频 and Ireland head of investments at BGF, said: “The research suggests that despite the obvious headwinds, growth economy companies have demonstrated high levels of resilience during the pandemic.
“Importantly, they appear to be thinking ahead to the next 12 months, working to reposition and refuel their companies to pursue growth.
“As businesses look to either enter new markets or refocus their operations, closing any skills gaps and bolstering their senior leadership teams will be critical.”