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Executive Summary

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TABLE OF CONTENTS

Executive Summary

Introduction

DEFINITION

REPORT COVERAGE

ECONOMIC BACKGROUND

Table 1.1: Gross Domestic Product (£bn), 1989-1993

Table 1.2: Output of Total Production Industries (index 1990=100), 1989-1993

Table 1.3: Consumer Expenditure at Current and Constant 1990 Prices (£bn and index 1989=100), 1989-1993

Table 1.4: Employment and Unemployment Levels in the UK (000), 1989-1993

Table 1.5: Retail and Wholesale Price Trends, 1989-1993

Table 1.6: Retail Sales Indices (index 1990=100), 1989-1993

Table 1.7: Real Personal Disposable Income Indices (index 1990=100), 1989-1993

Table 1.8: Volume of Construction Output (index 1990=100), 1989-1993

Table 1.9: Gross Trading Profits of Companies (£bn and index 1989=100), 1989-1993

Table 1.10: Number of Insolvencies in England and Wales, 1989-1993

Industry Structure

INTRODUCTION

BUSINESS SERVICES AND CENTRAL OFFICES

FINANCE, PROPERTY AND PROFESSIONAL SERVICES

MOTOR TRADES

Table 2.1: Number of VAT Legal Units of Business Services and Central Offices, 1989-1993

Table 2.2: Business Services and Central Offices by Type of Service ( percent of legal units), 1993

Table 2.3: Business Services and Central Offices by Turnover Size ( percent in each turnover band), 1993

Table 2.4: Business Services and Central Offices by Type of Business ( percent), 1993

Table 2.5: Number of VAT Legal Units of Finance, Property and Professional Services, 1989-1993

Table 2.6: Types of Services ( percent of legal units), 1993

Table 2.7: Financial, Property and Professional Services by Turnover Size ( percent in each turnover band), 1993

Table 2.8: Financial, Property and Professional Services by Type of Business ( percent), 1993

Table 2.9: Number of VAT Legal Units of the Motor Trades, 1989-1993

Table 2.10: Motor Trades by Turnover Size ( percent in each turnover band), 1993

Table 2.11: Motor Trades by Type of Business ( percent), 1993

Customer Profile

INTRODUCTION

TOTAL BUSINESSES

STRUCTURE OF CUSTOMER UNIVERSE

USAGE OF CORPORATE SERVICES

Table 3.1: Total Number of VAT Legal Units in the UK, 1989-1993

Table 3.2: All Business by Main Categories ( percent of legal units), 1993

Table 3.3: Total Businesses by Turnover Size ( percent in each turnover band), 1993

Table 3.4: Total Businesses by Type of Business ( percent), 1993

Table 3.5: Corporate Services, Outside Agencies Usage versus Internal Staff Usage ( percent), April 1994

Accountancy Services

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CUSTOMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 4.1: Accountancy Services by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 4.2: Number of Legal Units of Accountancy Services (number and index 1989=100), 1989-1993

Table 4.3: Leading Accounting and Auditing Firms in the UK - Fee Income, 1993/1994

Table 4.4: Total Fee Income of Accountancy Firms (£bn and index 1988/1989=100), 1988/1989-1992/1993

Table 4.5: Accountancy Services - Fee Income Structure (million and percent of total), 1992/1993

Table 4.6: Usage of Accountancy Services ( percent), April 1994

Table 4.7: Forecast of Accountancy Services Fee Income (£bn at current prices and index 1993=100), 1993-2000

Business Travel

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CUSTOMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 5.1: Potential Suppliers of Business Travel Services - Number of Legal Units, 1993

Table 5.2: Travel Agents by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 5.3: Number of Legal Units of Travel Agents (number and index 1989=100), 1989-1993

Table 5.4: Estimated UK Business Travel Agency Shares of the UK Market ( percent), 1993

Table 5.5: Estimated Expenditure Levels on Business Travel by UK Residents (£bn and index 1989=100), 1989-1993

Table 5.6: Trends in UK Residents' Business Travel Within the UK by Volume and Value (million and £m), 1989-1992

Table 5.7: Trends in UK Residents' Business Travel Abroad by Volume and Value (000 and £m), 1989- 1992

Table 5.8: Breakdown of Business Travel Expenditure by UK Residents (£bn and percent of total), 1992

Table 5.9: Usage of Travel Agencies for Business Travel ( percent), April 1994

Table 5.10: Forecast of Business Travel Expenditure by UK Residents (£bn at current prices and index 1993=100), 1993-2000

Contract Catering

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CUSTOMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 6.1: Contract Catering Businesses by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 6.2: Number of Legal Units of Businesses in the UK Contract Catering Market (number and index 1989=100), 1989-1993

Table 6.3: UK Contract Catering Market (number of outlets by sector), 1990-1993

Table 6.4: Proportion of Total Outlets Serviced by Contract Caterers, Accounted For by Business and Industry ( percent), 1990-1993

Table 6.5: Penetration of Contract Caterers by Outlet Sectors (number and percent), 1993

Table 6.6: Estimated Market Share of Selected Leading Companies in the UK Contract Catering Market ( percent by value), 1993

Table 6.7: UK Contract Catering Market - Trends in Turnover (£m), 1989-1993

Table 6.8: Number of Meals Served by UK Contractors (million and percent of total), 1993

Table 6.9: Meals Served by UK Contract Caterers to Business and Industry as a Proportion of Total Meals Served (million of meals and percent of total),

1990-1993

Table 6.10: Usage of Contract Caterers ( percent), April 1994

Table 6.11: Forecast of the Contract Catering Market (£m at current prices and index 1993=100), 1993-2000

Contract Cleaning

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CUSTOMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 7.1: Contract Cleaning Businesses by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 7.2: Number of Legal Units of Businesses in the UK Contract Cleaning Market (number and index 1989=100), 1989-1993

Table 7.3: Employment in Cleaning Services (000 employees), Year to June 1989-1993

Table 7.4: Selected Major Contract Cleaning Companies by Turnover (£m), 1992/1993

Table 7.5: Turnover of UK Contract Cleaning Companies (£m at current and constant 1989 prices), 1989-1993

Table 7.6: Usage of Contract Cleaners for Cleaning and Sanitation ( percent), April 1994

Table 7.7: Forecast of the Contract Cleaning Market (£m at current prices and index 1993=100), 1993-2000

Courier and Express Services

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CONSUMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 8.1: Transport and Related Industries by Turnover Size ( percent of total legal units), 1993

Table 8.2: The UK Courier and Express Market by Sector (£m and percent by value), 1993

Table 8.3: Usage of Courier and Express Companies ( percent), April 1994

Table 8.4: Forecast of the Courier and Express Services Market (£m at current prices and index 1993=100), 1993-2000

Employment Agencies

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CUSTOMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 9.1: Employment Agencies and Staff Bureaux by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 9.2: Trends in Employment Agency Licences and Legal Units, 1989-1993

Table 9.3: Top Ten Employment Agencies (£m and percent), 1992/1993

Table 9.4: Staff Bureaux and Employment Agencies by Number and Turnover (£m excluding VAT), 1989-1992

Table 9.5: Usage of Employment Agencies for Temporary Staff Recruitment ( percent), April 1994

Factoring and Debt Management

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CUSTOMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 10.1: Prepayments to ABFD Customers (£bn and index 1989=100) , 1989-1993

Table 10.2: Total Factoring and Discounting Turnover by ABFD Members (£bn and index 1989=100), 1989-1993

Table 10.3: The Factoring and Invoice Discounting Market by Sector (£bn and percent of total), 1993

Table 10.4: ABFD Members' Client Sectors ( percent of members clients), 1993

Table 10.5: Usage of Payroll and Factoring Services ( percent), April 1994

Table 10.6: Forecast of Total Factoring and Discounting Turnover by ABFD Members (£bn at current prices and index 1993=100), 1993-2000

Insurance Broking

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

CUSTOMER USAGE

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 11.1: The Ten Largest Companies by Sales (£m), 1992/1993

Table 11.2: Sales by Selected Insurance Brokers (£m), 1990/1991-1992/1993

Table 11.3: Estimated Sales by All UK Insurance Brokers (£m and index 1989=100), 1989/1990-1993/1994

Table 11.4: Total Insurance Brokers Sales by Sector ( percent of total), 1993

Table 11.5: Regional Breakdown of Net Income Premiums Worldwide by UK Insurance Brokers ( percent), 1993

Table 11.6: Usage of Insurance Brokers ( percent), April 1994

Table 11.7: Forecast Sales by All UK Insurance Brokers (£m at current prices and index 1993=100), 1993-2000

Legal Services

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

USAGE OF LEGAL SERVICES/SOLICITORS

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 12.1: Legal Services by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 12.2: Size of Private Practices Firms Earning At Least £15,000 per annum (number and percent of total), At 31st July 1992

Table 12.3: Number of Legal Units of Firms Offering Legal Services (number and index 1989=100), 1989-1993

Table 12.4: Solicitors Holding Practising Certificates, 1962/1963-1992/1993

Table 12.5: Top Ten London Practices (£m), 1992

Table 12.6: Monetary Value Total Gross Fees Earned by Private Practice Firms in England and Wales (£m at current prices and index 1988/1989=100),

1988/1989-1992/1993

Table 12.7: Regional Variations in Gross Fees (£m, percent of total and £000), 1991/1992

Table 12.8: Usage of Legal Services/Solicitors ( percent), April 1994

Table 12.9: Forecast of Total Gross Fees Earned by Private Practices in England and Wales (£m at current prices and index 1993=100), 1993-2000

Logistics

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

USAGE OF STORAGE/WAREHOUSING

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 13.1: Freight Tonnage Uplifted by Mode of Transport (million tonnes of goods lifted and percent of total), 1992

Table 13.2: Number of Road Haulage Firms by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 13.3: Transport Industries Involved With Distribution of Goods - Number of Legal Units in the UK, 1993

Table 13.4: Number of Legal Units of Road Haulage Companies (number and index 1989=100), 1989-1993

Table 13.5: The Cost of Distribution to UK Industry (£bn and percent of total), 1991/1992

Table 13.6: Breakdown Between In-House and Third Party Storage and Transport Costs (£m and percent of total), 1991/1992

Table 13.7: Usage of Storage/Warehousing ( percent), April 1994

Table 13.8: Forecast of Distribution Costs (£bn at current prices and index 1992=100), 1992-2000

Security Services

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

USAGE OF SECURITY COMPANIES

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 14.1: Notifiable Offences Recorded by the Police in England and Wales (000), 1989-1993

Table 14.2: The UK Market for Selected Security Products and Services (£m and index 1989=100), 1989-1993

Table 14.3: Structure of the UK Security Market by Sector ( percent by value), 1993

Table 14.4: Use of Security Companies ( percent), April 1994

Table 14.5: Forecast for Selected Security Products and Services (£m at current prices and index 1993=100), 1993-2000

Vehicle Leasing and Hire

INDUSTRY STRUCTURE

INDUSTRY SUPPLY

MARKET SIZE AND TRENDS

USAGE OF FLEET MANAGEMENT SERVICES

RECENT DEVELOPMENTS

FUTURE PROSPECTS

Table 15.1: Customer Segmentation of the Long-Term Hire Sector ( percent), 1993

Table 15.2: Top Ten Long-Term Vehicle Leasing Companies (£m), 1992/1993

Table 15.3: The Estimated Total UK Fleet Size Based on BVRLA Membership, Excluding Trailers (000 units), 1989-1993

Table 15.4: Membership of the BVRLA by Fleet Size (number and percent of total), 1993

Table 15.5: Market Share Held by Contract Hire, Finance Leasing, Contract Purchase and Fleet Management Services for the Long-Term Market (by number of

units and percent of total), 1993

Table 15.6: Company Usage of Fleet Management Services ( percent), April 1994

Table 15.7: Forecast of the Estimated Median Total UK Fleet Size, Based on BVRLA Membership, Excluding Trailers (000 units and index 1993=100), 1993-2000

Other Business Services

INTRODUCTION

MANAGEMENT CONSULTANTS

MARKET SIZE AND TRENDS

COMPUTER SERVICES

MARKET SIZE AND TRENDS

Table 16.1: Number of Management Consultants by Turnover Size - Number of Legal Units in the UK (number and percent of total), 1993

Table 16.2: Number of Legal Units of Management Consultants (number and index 1989=100), 1989-1993

Table 16.3: Top Ten Specialist Management Consultants (£m), 1992

Table 16.4: Estimated Total Turnover of Management Consultants (£m and index 1989=100), 1989-1993

Table 16.5: Number of Computer Service Suppliers by Turnover Size - Number of Legal Units (number and percent of total), 1993

Table 16.6: Numbers of Legal Units of Computer Services Suppliers (number and index 1989=100), 1989-1993

Table 16.7: Estimated Total Turnover of Computer Services Firms (£m and index 1989=100), 1989-1993

Future Prospects

THE ECONOMIC CLIMATE

GOVERNMENT LEGISLATION AND POLICIES

COST EFFICIENCY TRENDS

LONG-TERM FORECAST

Table 17.1: Forecast of Total Combined Turnover of Nine Selected Corporate Services (£bn), 1993-2000

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

ICC INFORMATION SOURCES

ICC INFORMATION GROUP LTD

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

All businesses require a range of services in order to function effectively. Government data (Business Monitor PA1003) shows that in 1993 there were in the region of 1.7 million businesses (or legal units) which provide the universe of customers which companies offering corporate services can target. There are a large number of such services available to British companies. Many are small industries and very poorly documented. This report reviews 12 of the largest, each with turnovers running into billions of pounds sterling. In the case of nine of these services, namely accountancy, business travel, contract catering, contract cleaning, courier and express services, factoring and debt management, insurance broking, legal services, and security services, their combined turnover in 1993 was an estimated £61.4bn. Key Note forecast this to rise to £76.7bn in 1997 and £90bn by the year 2000. The prime influence upon the fortunes of corporate services and their future prospects is the economic climate.

Research, specially commissioned by Key Note in April 1994, among 408 companies with turnover exceeding £1m per annum, showed that in insurance broking (87 percent), legal/solicitors (82 percent) and courier and express services (76 percent), the great majority of companies use outside agencies only. Conversely, the majority of companies only use their own internal staff for payroll and factoring (79 percent), quality assurance (76 percent), storage/warehousing (72 percent), and accountancy (61 percent). A mixture of outside agencies combined with internal staff is usually the pattern for services such as trademarks and patents, catering, cleaning and sanitation, business travel, security and temporary staffing.

There were 17,840 firms providing accountancy services in 1993, of which Coopers & Lybrand, KPMG Peat Marwick, Ernst & Young, Arthur Andersen, Price Waterhouse and Touche Ross are the largest. Total fee income in 1992/1993 was £4.4bn. This is forecast to rise to £4.48bn by 1997 and reach £5.5bn by the year 2000.

Business travel services were supplied by nearly 5,200 firms in 1993, led by Thomas Cook, Hogg Robinson (Travel) Ltd, American Express, Wagons-lits Travel and Carlson. Expenditure by companies on business travel totalled £19.6bn in 1993. This is forecast to rise by 12 percent to £22bn by 1997 and reach £25bn by the year 2000.

There were nearly 2,500 firms providing contract catering services in 1993. Gardner Merchant is the leader followed by the Compass Group and Sutcliffe Group. The market was worth an estimated £2.5bn in 1993 and it is forecast to grow by 32 percent by 1997 reaching £4bn by the year 2000.

Contract cleaning was supplied by just over 5,500 firms of which companies comprising BET Cleaning Services together has the largest turnover. ISS Europe Ltd, Office Cleaning Services Ltd and Pall Mall Services Group Ltd are major players in a crowded market. The 1993 market was worth £1.46bn and this is forecasts to grow by 34 percent to £1.95bn by 1997, reaching £2.37bn by the year 2000.

In the courier and express market, the biggest players are Parcelforce, Securicor and TNT Express with UPS/Carryfast growing rapidly and already ahead of Lynx. The total market was worth nearly £2bn in 1993. It is expected to grow by 10 percent to £2.15bn by 1997 and reach £2.3bn by the year 2000.

There were 5,759 firms defined as employment agencies and staff bureaux in 1993. Manpower is the leading player ahead of Reed, Aida and Brook Street Bureau.

Over 10,000 companies used the services of the Association of British Factors & Discounters in 1993. The top five factoring companies account for 70 percent of the market. These are International Factors, Alex Lawrie Factors and Barclays Commercial Services. Total factoring and discounting turnover reached £19.7bn in 1993. This is forecast to grow by 41 percent to £27.7bn by 1997 and reach £33.2bn by the year 2000.

There are 127 registered insurance broking companies in the UK. Sedgewick Group and Willis Corroon Group head the list well in front of the other players. Total 1992/1993 sales by the industry were £3.22bn. This figure is forecast to grow by 22 percent to £3.92bn by 1997 and reach £4.55bn by the year 2000.

Over 19,400 firms provided legal services in 1993. Most practices are small. 96 percent have fewer than ten staff and 82 percent have four or less. Clifford Chance (£210m) Link Laters & Partners (£154m), Freshfields (£135m) Lovell White Durant (£120m) are the biggest firms. Fees earned by private practices totalled an estimated £6.4bn in 1992/1993. These are forecast to rise by 30 percent to £8.32bn by 1997 and reach £9.8bn by the year 2000.

There are some very large companies involved in freight transport and distribution activities. The three giants in this market are NFC, LEP Group and Ocean Group with turnovers of above £1bn each. The logistics and transport sector is estimated to be worth £16bn. Distribution costs are forecast to rise from around £3.16bn in 1993 to £3.37bn by 1997, reaching £3.52bn by the year 2000.

The principal companies supplying security services to the private sector are ADT, Automated Security Holdings (ASH), BET, Mayne Nickless, Racal Security, Reliance, Scantronic, Securicor, Securiguard and Thorn Security & Electronics. The market was worth £2.15bn in 1993. It is forecast to grow by 30 percent to £2.8bn by 1997, reaching £3.25bn by the year 2000.

The leading companies in the long-term vehicle leasing market are PHH Vehicle Management Services, Cowie Group, Evans Halshaw Holdings, Tiphook, Henlys Group and the four subsidiaries of United Dominion Trust. The total market in 1993 was worth between £20bn and £25bn, including petrol in terms of the cost of fleet vehicles. The total UK fleet size of 1,341,100 vehicles in 1993 is forecast to fall by 3 percent to 1,300,000 by 1997 and then fall again to 1,250,000 by the year 2000. This fall is attributable to recent Government policy aimed at making the company user a much less attractive `perk'.

Text © 1994 Key Note

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