Companies are increasingly obsessed with red tape. Last year, members of the FTSE All-Share made more than 2,000 references to “compliance obligations” in trading updates and financial statements. Twenty years ago, the term cropped up about 100 times. It’s hard to suppress an inward groan at the thought of rising regulatory costs and big fines, but there is a breed of business that is thriving in these burdensome conditions.
- Pick-up in demand
- Bolstered balance sheet
- Fresh 'digital first' approach
- Defensive business model
- Patchy track record
- New risks associated with portfolio shake-up
FTSE 100 giants such as Intertek (ITRK), which specialises in quality control, and Halma (HLMA), which makes safety equipment, are two obvious examples. Similarly, the £4.3bn takeover of Darktrace (DARK) by private equity firm Thoma Bravo shows there is money to be made from heightened cyber security risk. However, there are a handful of far smaller companies that are also riding the compliance wave. Wilmington (WIL) is one of them.