Firms post best results in two years

Companies reporting during the last three months of 2013 grew their total revenues by three per cent to £109.8bn, the report states.

A spokesman for The Share Centre said: “Although this is still rather sluggish on a historic comparison, it is nevertheless the fastest increase since the second quarter of 2012 and suggests the UK recovery is now showing up more clearly in company results.”

Growth emerged across a broad range of sectors, from travel and leisure, to tobacco and financial services.

Overall, 11 sectors increased sales, while six saw them decline. FTSE 100 companies saw stronger growth in revenues and operating profits than their mid-cap counterparts, but the FTSE 250 companies saw net profits rise almost tenfold from near break-even a year ago.

Helal Miah, investment research analyst at The Share Centre, said: “The UK economy has a spring back in its step, and this is now clearly showing up in company results. Companies have produced feeble sales growth and declining profits for eighteen months, but fortunes are now rebounding. We expect sales and profits to continue to improve.

“What’s more, we think they will do so faster than most commentators currently expect. The outlook is good for the stock market and investors.

“Trading updates from company management teams are also more positive than they were this time last year, indicating a growing confidence across the board.”