The language industry is becoming increasingly dominated by Anglo-American players with language service providers (LSPs) from the UK and the United States accounting for seven out of ten companies in the Slator LSPI.
The major LSPs continue to consolidate the market and grow either by M&A or by winning business from increasingly large clients but they only mark the tip of the iceberg. Below the surface, there is a very active corporate ecosystem of small and micro-companies vying for a piece of the (still) growing pie.
Case in point is the UK. Data from the UK Companies House indicates that in 2017 alone, a total of 265 new LSPs were set up in the United Kingdom. And 2018 is on track to top even that figure. By June 1, 2018 over 150 new LSPs were incorporated.
In total, there are now 2,164 entities incorporated in the UK under the SIC code 74300. A number of companies (likely in the low hundreds) appear to have multiple entities registered, which still puts the number of unique companies at around 1,800.
These impressive figures are consistent with the language industry according to LinkedIn, which shows that there are some 2,715 corporate accounts in the UK made up of 28,301 individuals.
Survivorship Bias
The chart shows the date when currently active companies were first created, and omits companies that were launched but are no longer in operation, meaning the actual figures for the number of companies incorporated each year is higher than displayed and the graph favors those companies who have so far lasted the distance.
Old Timers
Amazingly, there are two companies launched in the ‘50s still standing. With a whopping 61 years of service, the mantle of longest standing language service provider (LSP) goes to O.P.S Interpreting and Translating Service Limited, registered in 1957, closely followed by Aradco VSI Limited, registered in 1959, whose LinkedIn page advertises “solutions for any occasion. We offer consecutive, simultaneous and telephone interpreting. We also offer hire of interpreting equipment.” There are no companies registered in the UK in the ‘60s…a time when aspiring linguists were busy pursuing other interests, perhaps.
Another long-serving company, celebrating its 30th birthday in August 2018, is Translexis, a Greek translation services company, “based in St Ives, a picturesque market town some 12 miles to the northwest of the university city of Cambridge.”
All About London…
Cambridge appears to be a fairly popular location for companies to set up, and the other main locations come as no real surprise, with London-registered companies far outstripping those in other UK cities. Be warned that the data is someway skewed, given that Companies House is not that rigid on how companies input location information, e.g. Harrow is a borough of London, and Surrey is a county.
It’s all well and good quoting upwards of 2,000 registered language companies in UK, but what about the status and size of these companies? How many are actively trading? The type of accounts companies are required to submit speaks somewhat to the size of the company and, broadly speaking, the categories can be understood as follows, although it’s not an exact science:
- Small, unaudited abridged, total exemption full and total exemption small – has a turnover of GBP 10.2m or less, GBP 5.1m or less on its balance sheet and has 50 employees or less (#809) – two or more must apply
- Microentity – has a turnover of GBP 632k or less, GBP 316k or less on its balance sheet and has 10 employees or less (#733) – two or more must apply
- Dormant – not doing business and doesn’t have any other income (#147)
- Full – has a turnover of above GBP 10.2m or does not satisfy two or more of the criteria required to be a micro-entity or small company (#14)
The list of companies registered as filing full accounts (i.e. including top and bottom line results) mainly consists of the largest LSPs globally and their related entities: The Big Word (two entities plus Link Up Mitaka), SDL (plus Interlingua Group), and RWS (two entities plus its Pharmaquest, Corporate Translations Inc. and Eclipse Translations entities).
The UK entities of Welocalize and Danish LSP LanguageWire are also on the list of those required to file full accounts. Finally, there is Sussex Interpreting Services and Scotland-based Forth Valley Sensory Centre (FVSC). FVSC is an organization for “people with a visual or hearing loss, their friends, families, carers and the wider community can access quality services and advice from our partner organisations.” and provides translation and interpretation activities as part of a range of services including human health, social work and physical well-being.
Among the myriad of companies listed as micro-entities, there are of course bound to be a significant number of freelance linguists or project managers, trading under a company name.
This is a preferred option for some since there are some tax benefits associated to operating as a company director rather than a self-employed individual.
With the overwhelming numbers of small and micro-companies popping up in the UK (and staying the course), there is likely to be even more M&A activity and consolidation of the UK language market in the months and years to come. Get up-to-speed with Slator’s M&A report and stayed abreast of the emerging trends with weekly insights to your inbox.
Download the full list of UK language services providers below. To discuss Slator’s market entry and M&A advisory services contact andrew (at) slator.com.
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