London's fast-growing businesses are more confident about future trade than at any point over the last eight years, according to a survey from private equity firm ECI Partners.
Half of the UK businesses surveyed, more than at any point since ECI began its annual study in 2010, predicted sales growth of 20 per cent or more over the next 12 months.
Plans to export more were behind much of this shift in attitude, as 72 per cent of UK growth businesses planned to trade more overseas. A hefty 69 per cent of companies which saw benefits from Brexit said the weak pound was behind their plan to export more.
“You can see how these businesses are really just getting on with it. There's always another political crisis or something going on, and actually they're not interested in sitting around worrying about that,” said Charlie Johnstone, partner at ECI.
Eldon Robson, chief executive of drinks company Fentimans, added: “We’re forecasting turnover of £70m by 2020. The main flow of the tap will be exports – that will represent 60 per cent of the business in three years."
However, a significant 45 per cent of respondents still said they could see no benefits coming from Brexit.
“What's interesting is that while the weak pound may be benefiting a certain subset of companies, the vast majority of them are investing in new products, their staff, new offices and sales,” said Johnstone.
“When asked what's changed their outlook, people are giving answers like 'adoption of new technologies' or 'making acquisitions' or 'new contract wins'. It's fascinating to see how much of the growth is self-driven.”
He added that companies should be wary of relying on a weaker currency to boost exports, as the higher cost of imports may in many cases offset the apparent gain.
Although Johnstone was no advocate of Brexit, he conceded that the uncertainty flowing from the referendum may have spurred businesses which were in a “wait and see” position into action.
“Although we've had eight years of economic growth, it's never felt easy. I think businesses got bored or fed up with the political narrative and uncertainty. They're looking at what they can do about their own business and building their growth in a more sustainable manner,” he explained.
Steak chain Flat Iron, ticket distribution company Encore and music licensing firm Audio Networks were among the businesses surveyed by ECI.
Fears for the future
In last year's study, most companies (72 per cent) counted an economic slowdown as their biggest fear. This decreased to 61 per cent this year, but the number fearing a skills shortage from restricted access to the European labour force has increased from 42 per cent to 49 per cent.
Businesses' top demand from the government remained constant from last year – 71 per cent wanted the government to retain access to the single market.
Easier access to finance
Growth companies were also more upbeat about access to financing than in previous years. More than three quarters (77 per cent) expected it to be easy or very easy to source funding, up from 47 per cent last year.
A surprising 57 per cent were confident they could tap banks for capital, while 50 per cent said they would consider private equity backing.