Industries with the Biggest Increase in Profit Margin in the UK in 2025

1. Pension Funding in the UK

Percentage Point Increase for 2025: 116.9pp

Pension funds are undergoing a period of change. The past few years marked a shift from defined benefit (DB) to defined contribution (DC) schemes dominating the industry. Following the onset of the COVID-19 pandemic, equity markets were destabilised, causing asset values to decline in 2020. However, the steady recovery of economic conditions as the pandemic wound down was mirrored in equity values, supporting pension fund assets.

Pension funds were rocked in late 2022, when a fire sale of gilts meant that funds were forced to sell assets to meet margin calls. The hit taken to pension assets means that revenue is... Learn More

2. Pipeline Transport in the UK

Percentage Point Increase for 2025: 15.6pp

Natural gas reserves in the UK, domestic electricity production and the world prices of natural gas and crude oil significantly influence the performance of pipeline operators. The complex infrastructure of long-distance pipeline transport lends itself to a limited number of operators rather than a host of companies in charge of various sections across different regions. As a result, most companies in the industry operate as monopolies, although bodies like Ofgem and NIAUR tightly regulate them. The National Grid dominates and accounts for the bulk of activity as it owns the gas transmission system in Great Britain. Revenue dove sharply in... Learn More

3. Urban Passenger Rail Operations in the UK

Percentage Point Increase for 2025: 15.0pp

Over the five years through 2022-23, revenue is expected to contract at a compound annual rate of 1.7% to £3.7 billion. COVID-19 disruptions decimated urban rail traffic, driving this revenue loss. London is the largest market for urban rail services, accounting for more than 90% of passengers. Consequently, Transport for London (TfL) dominates the industry through its ownership of the London Underground, the Docklands Light Railway and the London Overground. Industry performance is predominately contingent on the number of passengers using these services, which is determined by several demographic and social factors, including the size of the urban population, the... Learn More

4. Electricity Transmission in the UK

Percentage Point Increase for 2025: 13.1pp

The UK's electricity transmission network is made up of four high-voltage onshore transmission networks owned by the National Grid Electricity Transmission plc, SP Transmission plc, Scottish Hydro Electric Transmission plc and Northern Ireland Electricity Networks Ltd. Each company operates a regional monopoly on different transmission networks and is heavily regulated through price controls. Efforts by the government to decarbonise the electricity supply chain have necessitated substantial investment in transmission networks in recent years.

Revenue is forecast to increase at a compound annual rate of 11.3% to reach £8.6 billion over the five years through 2023-24. Network expansion has supported transmission revenue... Learn More

5. Electricity Supply in the UK

Percentage Point Increase for 2025: 9.7pp

The Electricity Supply industry has developed considerably since its liberalisation in 1999. Following a period in which the Big Six suppliers dominated, energy regulator Ofgem endeavoured to introduce greater competition to the market as part of attempts to drive down energy bills. Major mergers and acquisitions effectively bought the dominance of the former Big Six suppliers to an end at the end of 2019-20. Along with a declining electricity consumption, increased competition has placed significant pressure on revenue in recent years.

Electricity suppliers' revenue is forecast to increase at a compound annual rate of 7% to reach £53.6 billion over the... Learn More

6. Motion Picture Production in the UK

Percentage Point Increase for 2025: 9.0pp

The film production industry is volatile, as it relies on investments in the production of feature films, particularly from the US. This means that external factors significantly sway the success of the industry, like the exchange rate between the US dollar and the pound, film tax incentives and credit availability. Advances in film production and creative developments worldwide also affect the industry.

The industry is projected to expand at a compound annual rate of 0.8% over the five years through 2022-23, reaching to £3.8 billion. This is despite the economic shock caused by the COVID-19 outbreak and subsequent lockdown restrictions, which... Learn More

7. Medical Malpractice Insurance in the UK

Percentage Point Increase for 2025: 6.8pp

The private healthcare market heavily drives the medical malpractice insurance industry. Under the Medical Act 1883, all healthcare professionals practising in the UK must hold clinical negligence cover. Insurers' revenue has increased at a compound annual rate of 1.1% over the five years through 2023-24. Given the nature of medical practice insurance, it's no surprise insurers contend with intense competition from state indemnity cover, and stringent regulatory hurdles. Times were tough during the peak-pandemic period with a high proportion of private elective surgeries deferred due to social distancing measures. The historic public-private healthcare deals following the onslaught of the pandemic... Learn More

8. Sea & Coastal Passenger Water Transport in the UK

Percentage Point Increase for 2025: 6.7pp

Over the five years through 2023-24, sea and coastal passenger water transport revenue is anticipated to drop at a compound annual rate of 6.6% to £2.3 billion. The industry is heavily reliant on domestic and international tourism. Cruise ships have performed robustly over most of the period and have expanded by marketing value, including all-inclusive holidays. However, demand for international ferry services has wavered as a result of intense competition from air and rail transport. Travel restrictions in response to the COVID-19 outbreak caused passenger numbers to plummet during 2020-21.

Changing tourist trends and technological developments have maintained a strong demand... Learn More

9. Game & Toy Manufacturing in the UK

Percentage Point Increase for 2025: 6.0pp

Game and toy manufacturers have performed resiliently in recent years in the face of rising import penetration and changing consumer tastes. Successful product developments to maintain interest from children and their parents have supported sales. Nevertheless, intense competition from imports has mitigated the effect of growing domestic demand. Revenue is expected to increase at a compound annual rate of 1% over the five years through 2023-24 to reach £796.9 million.

The collapse of major toy retailer Toys “R” Us in 2018 highlights some of the issues toy manufacturers face; competition from imports and video games has limited opportunities. Professional games have... Learn More

10. Confectionery Wholesaling in the UK

Percentage Point Increase for 2025: 5.7pp

The Confectionery Wholesaling industry has endured a challenging operating environment. Concerns over the health problems attributed to the consumption of confectionery, like obesity, have deterred demand for several products high in sugar and fat. Many small wholesalers are operating in the industry alongside major confectionery producers' wholesale and distribution divisions, including Mondelez, Mars Wrigley Confectionery and Nestle. Revenue is expected to contract at a compound annual rate of 3.4% to £8.6 billion over the five years through 2023-24, including an anticipated 2.4% drop in 2023-24.

Wholesalers have invested in developing their product mixes to reduce sugar content, spurred by shifting consumer... Learn More