AIM-listed companies have been spending 22% more on non-core operations than this time last year.
According to research conducted by accountancy firm SKS Business Services, costs have increased by an average 40% over the last five years suggesting the difference is enough to drive companies from an average profit of £9.6m into a loss of £0.8m.
The study looked at the finances of 670 small-cap and 134 AIM-listed companies, and considered the rising cost of things such as finance, legal and rents which could make the difference between a profit and a loss.
The researchers call it an “endemic” over-spend on general and administrative functions.
SKS said that firms operating in alternative energy and chemicals spend the greatest portion of their revenue on general and administrative (G&A) expenses,cartier replica watches while food producers and construction companies have their non-core operational costs most in check.