Brighton firms make it Britain's Costa del Profit

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Brighton, which has transformed itself from a jaded seaside resort into a vibrant community hoping to become Britain's newest city, has won another claim to fame - as a haven of capitalism.

Brighton, which has transformed itself from a jaded seaside resort into a vibrant community hoping to become Britain's newest city, has won another claim to fame - as a haven of capitalism.

A survey of 162 towns and cities has found that Brighton has the highest proportion of big profit-making companies. Dun & Bradstreet, the business information service, said its research showed 92.3 per cent of major business in Brighton and Hove made a profit last year.

It is an extraordinary turnaround for Brighton which was ranked 182nd, 173rd and 121st in the previous three years.

"A few years ago no one would have considered Brighton as a thriving hive of industry," said Philip Mellor, a senior analyst at D&B. "But no one should be surprised - it has easy communication links to London and Europe, close proximity to Gatwick airport and low accommodation and labour costs."

Brighton and Hove is also front-runner in the race to be granted city status later this year. The Queen will award the prestigious honour to one town to mark the millennium. A total of 27 towns are in the running but, according to a leaked Home Office document, the contest is between Brighton and Wolverhampton.

Part of Brighton's attractiveness to business lies in being "wired up" for the new economy. It has full ISDN and optical fibre networks and a dynamic new media sector, as well as a substantial banking and financial services industry.

The fast growth of businesses in the new media sector has been so pronounced that Brighton has earned the sobriquet "silicon beach". According to a recent report, there are 300 media companies employing 3,000 people and generating £300m of revenue.

But, being Brighton, its hip reputation is an attraction too.

Entrepreneur John Worth, who moved from London to Brighton seven years ago, said: "The lifestyle is fantastic. Just the other day we had a client meeting on the beach - we had a table full of food and it made me think I'd much rather be here than in Soho."

The quality of life and good transport links made it easier to recruit and retain staff for his company, JWM Creative, which develops training materials, he said. A sizeable number of business have relocated from London, especially the creative hub of Soho, attracted by lower costs.

Lynnette Gwyn Jones, the leader of Brighton & Hove council, said: "This shows we have turned the corner from the candy-floss economy and are now a serious, high-tech business city of the future."

But Brighton's leap in the profitability stakes marks a fall from grace for Banbury, the Oxfordshire market town that topped the table in both 1998 and 1999, but this year plummets to 125th place.

Banbury, famous for its stone cross and Banbury cakes, appears to have been held back by the high proportion of manufacturingin its local economy.

Chris White, president of the town's chamber of commerce, admitted he was disappointed but said Banbury had been a victim of its own success.

"Banbury is expanding rapidly and that has brought in some quite new companies and a lot of these are break-evens and this survey is about the concentration of profitable firms."

Leamington Spa regained second place in this year's table, after coming top in in 1996 and 1997 but falling back in the subsequent two years.

The table is dominated by towns in southern England, emphasising the north-south divide and reflecting the success of the services economy and the impact that the strong pound has had on manufacturing, which tends to be based in the North and Midlands. Dudley, the town that came bottom, is about 80 per cent manufacturing-based.

The most successful northern town is Macclesfield, Cheshire, in 12th place, followed in 14th position by Grimsby in Lincolnshire. The most successful Scottish town is Aberdeen in 44th place, while the leading Welsh standard bearer, Swansea, is in 48th place.

Co Down in Northern Ireland topped the table of counties with the highest percentage of profitable firms. Its figure of 84.8 per cent was just ahead of Renfrewshire with 84.6 per cent and Stirlingshire, in third place with 84.5 per cent.

The survey is based on the latest audited accounts of the United Kingdom's largest 50,000 businesses and the survey covered 162 towns and cities.