Insight: British brand values boosted by Brexit opportunities – Brand Finance

On St George’s Day, Brand Finance plc released its 12th annual brand valuation survey of the UK’s most valuable 150 brands, which reveals that Brexit is proving to be an opportunity and stimulus for many British brands.

Total brand value of the top 150 brands, as at 1st January 2018, increased by 3%, from $327 billion to $337 billion, despite uncertainty as the Brexit negotiations moved forward. On average, 14% of the top 150 UK branded businesses’ enterprise value was contributed by their brands.

By January 2018, the value date for the report, all UK macro-economic indicators had significantly improved from January 2017:

  • Consensus economic growth forecasts for 2018-2020 revised upwards to 1.8%.
  • £:$ exchange rate recovered from its 18% fall, following the Brexit vote in June 2016.
  • Inflation falling from 3% to 2.5%.
  • Unemployment at an all-time low of 4.3%.
  • Average wages rising, budget deficit decreasing, and interest rates rising.

Against this increasingly favourable macro-economic environment, many British brands are thriving.

David Haigh, CEO of Brand Finance commented; “Project Fear predicted that Brexit would be the end of the world as we know it, with catastrophe for UK businesses and UK brands. It is becoming clear that the UK economy is far more resilient than predicted and that UK brands are responding well to the challenge posed by Brexit.

Demand is high for British brands, both by B2C consumers, B2B customer trading partners, and as takeover targets. Brexit will only increase this frenetic activity of world-beating UK brands”.

British auto brands accelerate

The stand out result is that British auto brands are powering ahead in world markets, undeterred, and arguably assisted, by Brexit:

  • Land Rover’s brand value has increased from £5.5 billion to £8.9 billion, a 61% increase, moving up from 13th to 7th place in the table.
  • Aston Martin, favoured by James Bond and the younger members of the Royal Family, has seen its brand value grow from £0.7 billion to £2.7 billion, a 261% increase, and has leapt from 103rd to 33rdplace in the table.
  • Mini’s brand value has grown from £2.1 billion to £2.5 billion, a 20% increase, moving from 45th to 37th in the table.
  • Jaguar’s brand value has increased from £1.1 billion to £2.3 billion, a 101% increase, moving from 77th to 41st in the table.
  • Bentley’s brand value has increased from £1.5 billion to £1.9 billion, a 27% increase, moving from 63rd to 48th in the table.
  • The McLaren brand value is stable at £0.6 billion while only the Rolls Royce brand has declined in value from £1.0 billion to £0.8 billion.

David Haigh, CEO of Brand Finance, continues: “The outperformance of British luxury and premium auto brands is the result of great design, great marketing, strong manufacturing quality, and a competitive pound. All these brands have brand strength scores between AA+ to AAA and all are sold worldwide to discerning customers, particularly in Asia and America. This will only increase post Brexit.”

Britain – home to world-class brands

The second insight from the Brand Finance UK 150 is the wide diversity of world-class brands in the UK 150 table, including Shell (Oil & Gas £29.7 billion AAA-), Sky (Media £7.7 billion AAA-), BBC (Media £4.3 billion AAA-), BHP (Mining £3.8 billion AA), Burberry (Luxury Fashion £3.5 billion AAA-), Johnnie Walker (Alcoholic Drinks £3.2 billion AAA-), GSK (Pharmaceutical £2.3 billion AA), and EY (Professional Services £12.9 billion AAA+).

EY is Britain’s strongest brand

With a Brand Strength Index (BSI) score of 89.7 out of 100 and an elite AAA+ brand rating, EY is the strongest UK brand and is part of a diverse professional services industry in the UK which is both global and unaffected by the Brexit tariff debate. Some other leading professional service brands in the Brand Finance UK 150 table include Willis Towers Watson, (Risk and Insurance Advisory £2.3 billion AA-), Bunzl (Procurement Services £1.5 billion A+), Capita (Business Process Outsourcing £1.3 billion A+).

British SMEs thrive

As the Brand Finance UK 150 focuses on the leading publicly quoted brands, it does not reflect the wide range of brands in the architecture, accounting, actuarial, advertising, design, legal and many other professional services sectors. It also excludes many of the small specialist manufacturing and engineering brands which are thriving across the UK. But a proxy for the strength of this middle economy is NatWest (Banking £4.9 billion AA+, up from £2.5 billion AA, a 96% increase in one year). NatWest serves a vast number of Small and Medium Enterprises across the UK and is thriving as they thrive.

Brands and M&A

The UK’s vibrant, service-based economy leads the world. The UK marketing industry keeps producing brands which are bought by foreign predators, for example Orange which is now, ironically the most valuable brand in the Brand Finance France 100 table (£16.7 billion AA-).  Takeover activity in the UK has never been higher, with 1,700 deals worth £50 billion including Ladbrokes (Gambling £0.8 billion AA), one of the oldest British brands in its field.

Valuable royal brand endorsements

The GREAT campaign is driving tourism ever higher, fuelling greater activity in hotels, transport, and catering. Meanwhile, the Monarchy brand, with powerful Royal Warrant endorsements, is supporting high-quality product brands. Many of the brands in the Brand Finance UK 150 table benefit from Royal Warrants which drive value growth on a global stage. For example, Aston Martin, Bentley, Rolls Royce, Johnnie Walker, and Twinings.

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