Industries with the Highest Profit Margin in the UK in 2020

1. Pension Funding in the UK

Profit Margin 2020: 43.7%

The Pension Funding industry comprises defined benefit (DB) schemes and defined contribution (DC) schemes. Over the past decade, the industry has been transformed by the ongoing shift from DB to DC schemes, which in 2020-21 are estimated to account for 57.6% and 42.4% of total industry assets respectively. Industry revenue, which is calculated by combining contributions and investment returns, has increased over the past five years. The increase in contributions was fuelled by the phased introduction of automatic enrolment in pension schemes, which began in October 2012 and was fully phased in by February 2018. Record high levels of employment... Learn More

2. Electricity Distribution in the UK

Profit Margin 2020: 43.4%

Operators in the Electricity Distribution industry maintain an extensive network of lines and cables across the United Kingdom, carrying electricity from the high voltage transmission grid to industrial, commercial and domestic users. Electricity Distribution Network Operators (DNOs) have regional monopolies, so pricing in the industry is heavily regulated by the Office of Gas and Electricity Markets (Ofgem) in the United Kingdom and the Northern Ireland Authority for Utility Regulation (NIAUR) in Northern Ireland. In the United Kingdom, there are currently 15 different DNOs managed by seven operators, and 14 Independent Distribution Network Operators (IDNOs) working primarily to connect new housing,... Learn More

3. Gas Distribution in the UK

Profit Margin 2020: 42.5%

Operators in the Gas Distribution industry maintain a 284,000 kilometre gas pipeline network across the United Kingdom. The industry is comprised of eight Gas Distribution Networks (GDNs) across Great Britain, owned by four companies which operate regional monopolies. To protect consumers, operators are heavily regulated through price control frameworks. There are also nine smaller networks operated by independent gas transporters (IGTs) that primarily connect new build homes and industrial sites to existing networks, while a further two IGTs operate the Northern Ireland distribution network. The Office of Gas and Electricity Markets (Ofgem) is the regulatory body for Great Britain, while... Learn More

4. Immersive Technology in the UK

Profit Margin 2020: 42.5%

Immersive technologies, or extended reality (XR) – an umbrella term for virtual reality, augmented reality, mixed reality and haptics - integrate visual content with the physical environment, thus ‘immersing' the user of associated devices (such as head-mounted display (HMD) units) in a simulated setting. Firms in the Immersive Technology industry design and develop immersive visualisation software programs, systems and networks. Players then sell these solutions and the intellectual property to clients under licence. They may also undertake bespoke projects related to the development of XR and associated content on behalf of clients, generating revenue and profit by charging clients a... Learn More

5. Private Equity in the UK

Profit Margin 2020: 40.9%

The United Kingdom is the largest European centre for the management of private equity investments and funds, and second only to the United States in terms of global importance. Private equity firms pool investment funds to purchase other companies. They attempt to improve a company's performance by implementing managerial and operational changes, before selling the company for a profit, generating return for their investors. The industry's key source of revenue is fees derived from management fees, calculated as a percentage of assets under management (AUM), and from performance fees on the total return from an invested company's initial public offering... Learn More

6. Investment Trusts in the UK

Profit Margin 2020: 39.3%

Investment trusts are closed-ended funds that raise capital by issuing a set number of shares when they are launched. They are constituted as public limited companies. Funds raised are invested in a range of stocks and shares in order to generate investment returns and income. Industry firms are involved in managing and administering investment trusts and receive a fee for their services. Therefore, industry revenue is equivalent to the fees earned. Fees are calculated as a percentage of the value of assets under management (AUM).

The industry has expanded during the past five years. Industry growth was driven by improvements in... Learn More

7. Building Project Development in the UK

Profit Margin 2020: 38.0%

Operators in the Building Project Development industry bring together the financial, technical and physical resources required to complete a property development. Upon completion, the property may be delivered to a client for subsequent use or sale, or the developer may retain equity interest and derive income via rental fees charged. The financial and operational performance of development markets rests on a plethora of economic and socio-economic factors, ranging from property valuations and price movements to market sentiment and credit conditions.

Despite the referendum dampening investor sentiment and cooling property markets, the collective performance of UK property developers remained resilient in the... Learn More

8. Legal Activities in the UK

Profit Margin 2020: 36.1%

Solicitors, barristers, patent agents, notaries and bailiffs carry out legal activities on behalf of private and corporate clients. Over the five years through 2019-20, industry revenue is expected to expand at a compound annual rate of 1.4%. Widespread business uncertainty following the EU referendum, a decline in merger and acquisition (M&A) activity and falling residential property transactions are expected to have limited industry revenue growth during the period. In the current year, however, revenue is forecast to rise by 1.4% to £35.7 billion. An increasingly large number of client firms have required legal support to comply with changing laws and... Learn More

9. Water Collection, Treatment & Supply in the UK

Profit Margin 2020: 34.4%

The Water Collection, Treatment and Supply industry manages, stores and distributes clean water to domestic and industrial customers. Barriers to entry are high in the industry, with large start-up and maintenance costs, and the industry is dominated by regional monopolies. All industry operators are subject to regulation in terms of prices charged and services provided. Companies in the industry submit a breakdown of their performance and five-year business plan to industry regulators, namely the Water Service Regulation Authority (Ofwat), which then set the prices companies can charge. Industry services are essential so demand tends to remain steady from year to... Learn More

10. Search Engines in the UK

Profit Margin 2020: 34.4%

The Search Engine industry is highly concentrated, with three companies controlling almost the entire industry; the largest company in the industry, Alphabet Inc, has a market share greater than 90% in 2019-20. Industry operators provide web portals that generate and maintain extensive databases of internet addresses. Industry participants generate the majority, if not all, of their revenue from advertising. Technological growth has resulted in more households being connected to the internet, and a boom in e-commerce has made the industry increasingly innovative.Over the past decade, an increase in the percentage of households with internet access has supported revenue growth, while... Learn More