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UK mid-market is still in recession say 56% of CEOs and CFOs

56% of decision makers at British mid-market companies consider their business sector to still be in recession, according to a Grant Thornton report called "Financing Your Strategy". The survey of 150 CEOs and CFOs from UK-based mid-market companies shows significant differences across sectors*.

In construction, 87% of respondents said that their sector was in recession, while 58% of those working in industrials and chemicals saw their sector contracting. By contrast, 71% of respondents in fast moving consumer goods (FMCG) said that their sector was recovering, followed by 63% who saw growth in technology, media and telecommunications (TMT).

"Our survey shows a bounce back in sectors with more flexible business models, as well as those that benefit from a weak currency," commented David Ascott, Corporate Finance Partner at Grant Thornton.

More than two thirds of respondents (67%) stated that cost reduction has been a high priority underpinning their business strategy over the past 12-18 months, while 58% said it was growing market share.

By contrast, 64% intend to focus on growing market share in the coming 12-18 months, while only 59% see cost reduction as the number one priority underpinning their business strategy in future.

"Mid-market firms are shifting their focus from cost reduction to growing their market share. Most seek organic growth, but more than a quarter expect to complete M&A deals in the coming 18 months. We acted as lead advisors to 14 mid-market M&A transactions in the year-to-date, which shows that acquisition finance is available for compelling deals. Although there has been a significant rise in the cost of debt supporting expansion plans it is encouraging to see the mid-market companies resuming their growth plans," Ascott went on to say.

50% of respondents agreed that the costs of their funding and banking requirements have gone up on account of the financial crisis.

ENDS

For further information please contact:

Alexander Wessendorff, Grant Thornton press office, 020 7728 2048

Notes to editors:

*Grant Thornton Corporate Finance commissioned Remark, the research and publications arm of The Mergermarket Group, to canvass the opinions of 150 CEOs and CFOs from UK-based mid-market firms in the first quarter of 2010.

Table: In terms of recession or recovery, how would you position your sector today?

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