Data on 100 privately owned UK companies with the fastest growing profits showed that life assurance specialist Partnership has topped the rankings for the second year in a row. Figures also showed businesses in rude health - a fact of note for wealth managers prospecting for clients.

The business was ranked in the number one spot of the  Profit Track 100 league table. It second consecutive standing at the top of the table is the first time this has been achieved in Profit Track 100’s 14-year history.

Such data is indicative of how privately-held firms often perform as well as, if not better, than listed names. Wealth managers can scrutinise the fortunes of such companies for signs of future liquidity events such as share floats or trade sales, with the consequent creations of new millionaires.

Partnership provides financial products, such as annuities, for people with reduced life expectancy due to medical conditions. It grew profits an average of 176 per cent a year from £3.2 million (around $5 million) in 2008 to £67 million in 2011. Its private equity owner Cinven is considering a flotation of the firm on the London Stock Exchange later this year, which is reported to value Partnership at about £1 billion.

The Profit Track 100, sponsored by PwC, Lloyds Bank Commercial Banking and UBS Wealth Management, is compiled by Fast Track, the Oxford-based networking, events and research company. Companies are ranked according to the compound annual growth in their profits over three years, based on their latest available audited figures (either 2008 to 2011, or 2009 to 2012). This, in turn, provides a source for wealth managers to keep up to date with profitable and growing companies, as well as those that are not performing as well.

Despite tough economic conditions, the 100 companies on the league table grew their profits over the last three years by an average of 71 per cent a year to combined profits of £1.3 billion. Together they employ 82,800 staff, having added 28,000 employees to their workforce over the period, some as a result of acquisitions.

“Britain's privately-owned businesses are crucial to the economic recovery of the country. These are businesses that innovate to improve people’s lives, build vital infrastructure, and export world class products and services to faster growing parts of the world, enabling everyone in Britain to benefit from the success of other countries as well as our own. The Profit Track 100 demonstrates the successes of these businesses across a variety of sectors and serves to highlight the valuable contributions they make,” said Suzi Woolfson, partner and private business leader at PwC, the title sponsor of the league table for all 14 years.

Bouncing back

Although many companies felt the repercussions of the financial crisis in 2008, a number of them have since recovered and grown profits in the last three years.

These included JCB, which came back strongly with a record profit of £277 million on sales of £2.7 billion in 2011, after sales fell 33 per cent in 2009, when it shed 1,800 jobs and profits hit the lowest point in a decade. Jewellery retailer Aurum’s profits halved to £4 million in 2009 when it was hit by the collapse of its Icelandic backer Baugur. It has since climbed back to £19 million in 2012, according to the report.

A number of the owners and private equity backers of the companies on this year’s league table said they considered and planned a partial sale or flotation of their ventures. In addition to Partnership, others include Richard Caring, majority shareholder of Côte Restaurants, who is reported to be considering a sale of the chain, and Terra Firma, the private-equity owner of renewable energy generator Infinis, which is reportedly planning to sell it for around £1 billion.

International matters

The report shows that international expansion has played a part in growing profits. Shirt maker Charles Tyrwhitt doubled its international sales in the last two years to £47 million, and consumer products wholesaler Sun Mark generates 90 per cent of sales overseas, distributing household foods to emerging markets, mainly in the Middle East and Africa.

Notable industry groups include consumer goods, which represent more than a third (34) of the league table, featuring companies such as shoe retailer Office and biscuit and cake maker Tunnock's. The report reveals that consumer-related companies have combined profits of £370 million and employ 35,470 people.

Technology, media and telecoms also feature heavily with 17 companies, such as media technology developer Forward Internet and dictation software developer BigHand. The technology, media and telecoms companies have combined profits of £191 million and employ 5,090 staff.

By region, the majority of the companies on the league table are headquartered in London (34) and the southeast (17). Meanwhile, 15 are based in the Midlands, ten in the northwest, nine in the northeast and Yorkshire, six in the southwest, four in Scotland, two in Wales, two in Northern Ireland, and one in the eastern area of England.