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The UK’s language services industry grew by 7% in 2016 and will have grossed more than £1.15bn in 2017, according to our annual Language Services Market report.
We appointed an independent researcher to analyse the work of the UK’s 1,200 language service providers (LSPs), who found the industry grew faster than the anticipated 4.2% in 2016 to an average 7%, with the 20 largest companies increasing turnover by 10%.
The 46-page report is a detailed insight into the work of the UK translation and interpreting sector, allowing language service providers to benchmark their performance, compare pricing, profitability and margins to those of other companies. It also gives a concise, yet comprehensive, overview of the technology trends.
The ‘UK Language Services Market 2017’ study covers:
• Highest grossing players in the UK
• Financial performance and growth rates of key businesses
• Overall market growth rate
• Pricing, margins and profitability levels
• Technology adoption
• Gross salaries of LSP staff and the change since 2015
• Key Performance Indicators for employees
• Merger and acquisition potential
• Potential of specialist translation
• Marketing and communication channel performance
This is our third analysis of the UK translation and interpreting company sector, and we are delighted it shows another year-on-year growth in the industry, with half the companies surveyed increasing their volume of business in 2016.
The report confirmed that the languages industry employs more than 12,000 people, with a quarter of the sector’s revenue being generated by more than 60 UK translation companies, which each have revenues of over £1m. Three of the largest providers – SDL, Hogarth and RWS – were responsible for more than 50% of the revenue generation.
The surge across the industry has been fuelled by favourable exchange rates, with more than half of the UK’s £1.15bn translation revenues coming from overseas clients, as well as acquisitions involving a significant number of profitable LSPs.
Growth leaders included Voice & Script International, which saw operating profits more than double from £1.35m to £3.54m and Global Voices, which grew by 55% in 2015-2016 to a turnover of £6.4m, fuelled by two acquisitions and new contracts.
Patent translation company RWS have led the way in acquisitions, buying four companies and increasing combined revenue from under £100m to almost £300m in two years. Our study anticipates, that in 2018, its revenues will put it in the global top five companies in our sector.
Many smaller providers also achieved remarkable results, such as Talking Heads (46% growth in 2015-2016), Star UK (45%), One Global (37%) and RP Translate (33%).
Companies responding to the survey used to underpin our report no longer gave the uncertainty around Brexit as their main business challenge ahead, quoting instead issues around pricing pressure, growing sales and recruiting quality staff.
But Brexit still made the top 10 list of future business challenges, with the report also highlighting the long-term impact of Brexit-triggered business departures, as a factor which could potentially slow the growth of the UK’s language services market in 2018.
According to the report’s findings, another challenge to the industry’s domestic growth is increasing demand for efficiencies from the public sector. Large translation contracts such as those with the Ministry of Justice and the National Health Service are multi-year and have been locked in from 2016 for up to four years. Elsewhere, public sector spending on domestic-based LSPs is expected to stagnate.
While the report shows recent growth in the UK’s language sector has exceeded expectations, we believe the economic climate and the uncertainties around Brexit mean there are challenging times ahead. But it is reassuring that the study demonstrates our sector is in a healthy state to respond to these challenges, and we think there will be significant opportunities ahead for LSPs to work with exporters on new international trade agreements.
The full report, which is based on 2016 revenues due to the necessary time lapse for data from major LSPs to become publicly available, may be purchased for £175 + VAT from the Association of Translation Companies.