SMEs beat profit expectations

Data from Barclaycard Payments’ quarterly SME Barometer found that UK small businesses exceeded their second-quarter revenue expectations and are cautiously optimistic about future prospects.

At the beginning of April, respondents to the survey predicted they would suffer an average revenue decline of 28% during the second quarter due to the coronavirus pandemic. However, the actual impact was found to be less severe, with the latest research revealing an average loss of 14%, exactly half the anticipated level.

The Barometer also suggests businesses are generally feeling more positive about the future. The survey’s optimism index, for example, jumped from a score of 79 out of a possible 200 points at the start of the previous quarter, to 95 points in the current quarter. Additionally, 36% of SMEs reported a positive outlook for their own business, up from 21% previously. Unsurprisingly, the pandemic was still found to be causing considerable disruption, with 60% of SMEs expecting it to have a significant impact until at least the end of September. Despite the ongoing uncertainty, a degree of cautious optimism shone through the survey with respondents predicting average third quarter revenue growth of 5%, rising to 14% over the next 12 months.