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Home Weekly Business<br />E-newsletter ebusiness weekly news 20/08/2019

Business spending on technology set to rise as firms focus on core strengths

The outlook for business spending on technology amongst mid-sized companies has improved as they seek ways to boost efficiency and cut costs although overall confidence is largely subdued as firms scale back on investment, according to a survey of the sector from Grant Thornton. It shows 38 per cent of firms -including those in the East - expect to increase spending on technology, up from 33 per cent in 2018. And whilst over half of businesses see uncertainty as their biggest constraint, growth prospects remain stable with 52 per cent recording revenue growth above 5 per cent and almost a third increasing their staff levels by more than 5 per cent during the past year. The survey said: “This suggests businesses have started to adapt to the uncertainty, focusing on their core strengths and looking for diversification opportunities.” The survey also shows that business confidence levels have risen slightly to 13 per cent, up from 10 per cent in the second half of 2018, although they remain well below the 40 per cent recorded before the EU vote in June 2016. On  overall business investment, just six per cent of firms surveyed planning to increase spending on new buildings, down slightly on last year and only 15 per cent expecting to invest in plant and machinery. Hazel Platt, regional head of tax for Grant Thornton’s Central and East of England offices, said: “With a ‘no deal’ Brexit looking more likely than ever, many businesses are preparing for this outcome as waiting for politicians to reach an agreement is no longer an option for most. This is particularly true in sectors with supply chains which rely on planning and scheduling months in advance… Companies need to ensure they have the systems and capabilities in place to adapt to any challenges which emerge and seize the opportunities which arise. This includes getting ‘match fit’ by focusing on cashflow, retaining and attracting talent and removing unnecessary costs.”

See Profile Grant Thornton

Greene King agrees to £2.7 bn bid from Hong Kong-based group

Greene King, the Bury-based pubs and restaurants group, has agreed to be acquired by a Hong Kong-based group, CKA, in a deal which values the UK company at £2.7 billion. It follows a series of recent deals in the sector including the sale of Fuller’s drink business to Japanese brewer Asahi. CKA Group, which already owns a portfolio of pubs which have been leased to Greene King since 2016, said it is a long-term and strategic investor in stable, profitable and cash flow generating businesses that benefit from real estate backing. Greene King operates 2,730 pubs, restaurants and hotels in the UK and employs some 38,000 people and the deal implies an enterprise value of £4.6 billion. Philip Yea, chairman of Greene King, said: “The Greene King board is confident in the long term prospects of the business but believes this offer represents a good opportunity for shareholders to realise value for their investment at an attractive premium, while also ensuring the future success of Greene King for employees, partners, customers and suppliers.” The new owner plans to keep Greene King’s hq and hq functions in Bury and its support centre in Burton on Trent.

Photo: The Nutshell, a Greene King pub in Bury St Edmunds

Growing VC interest in Fintech bodes well for Cambridge

Venture capital funding for businesses around Cambridge rose by 28 per cent in the first half against a background of growing VC interest in backing new enterprises in UK regions, particularly in the Fintech sector. Overall venture capital funding in the UK reached a record high of £4.3 billion in the first half of 2019, a 45 per cent rise on the period in 2018, according to a report from Workthere, a flexible office service. The trends bodes well for Cambridge’s tech sector; around 60 per cent of all VC funding in the first half went to the tech sector, up from 44 per cent last year. However, although the average deal size for UK VC investment doubled to £5.9 million in the first half, the number of deals fell to 724 from 1,147 last year. Jessica Alderson, global research analyst at Workthere, said: “Last year it was all about healthcare, but this year tech is the most popular sector for VC investors. In particular, the sub-sector that is really driving growth is Fintech, which has accounted for eight out of the top ten funding deals so far this year, compared to just three last year. Moving forward, this is definitely an interesting sub-sector to watch in terms of expansion outside of their primary London offices into wider UK markets.” Meanwhile, in Cambridge, a total of 48,065 sq ft of serviced office space – which is often used by VC-backed businesses - was recorded in the first half of 2019.

Suffolk-based architectural glazing group acquired by private equity fund

English Architectural Glazing (EAG), the Suffolk-based contracting business which has supplied the facades for many landmark buildings in London, has been acquired by a UK private equity fund, Elaghmore. The Mildenhall-based business, which was founded in 1985 and employs 125, has been bought from its existing management team who will remain with the company. EAG specialises in complex and dynamic building facades and provides envelope cladding packages to major property and construction clients such as Stanhope, Kier, BAM and Skanska.  The firm operates from sites in Attleborough (Norfolk), Mildenhall (Suffolk) and Cannock (Staffordshire) and is focused on London and the South East across a variety of sectors. Projects have included Great Ormond Street Hospital, Wimbledon Centre Court, DLR Station City Airport, The London Stadium Transformation and the BBC TV Centre conversion together with major residential and office projects in the capital. Following the acquisition, EAG plans to expand to increase the amount of work it can tender for and take advantage of a growing need for aluminium rain screen cladding and off-site unitised cladding manufacture. Simon Gladwin, managing director, EAG, said: “We are excited about working with Elaghmore, whose financial backing and operational expertise will help us to expand the business and capture the growing market demand for our products and services.”

EAG was advised by PEM Corporate Finance and Mills & Reeve. Philip Olagunju, director at PEM Corporate Finance, said: "It's been fantastic advising Simon, Jeremy and Edward on the sale of Architectural Glazing, and I’m really pleased with the outcome. There are clear strategic and operational synergies which Elaghmore, which bodes well for an exciting future. Lake Falconer, Ned Brown and I wish both parties the best."

BT encourages locals to apply for 50 apprenticeships near Ipswich

BT is encouraging local people to apply for 50 new apprenticeships roles at Adastral Park, the telecoms group's research and innovation centre at Martlesham Heath near Ipswich. Successful candidates at the group's first assessment week between 21-23 August will be offered paid, BT degree-apprenticeship positions with the cost of their degree also funded by the company. Lisa Perkins, Adastral Park & research realisation director for BT, said: “This is a fantastic opportunity for local people…We have up to 50 paid apprenticeship roles available, ranging from working on the UK’s biggest and fastest mobile network, EE, to learning how to ....for BT customers and people.”  Starting salaries for apprenticeship roles with BT are around £16,149 with the potential average salary on completion between £35-39,000. Last year BT spent around £510 million on R&D and over the last decade the company has been one of the largest investors in telecoms R&D both in the UK and globally.

Bank supports growing company’s move in Peterborough

Barclays has supported a growing Peterborough company Smartheat Plumbing and Heating with banking facilities to buy premises in the city, creating local job opportunities. Directors Simon Foreman and Kevin Hobbs decided to move from their leasehold building and after a four month search found a suitable building at twice the size (4,000 sq ft) at Werrington Business Centre in Peterborough. Smartheat currently employs 13 staff, including six engineers and two apprentices. Increasing customer demand means the company will also be offering jobs to two full-time gas engineers and an apprentice. Simon Foreman said: “Having run our business from home and then a leasehold property for nine years, Kevin and I felt it was time to purchase a commercial building which was not only larger than our current premises, but would also provide a permanent home for the company.  This has proved exactly the right decision and will enable us to plan for the future by expanding the company and increasing our customer database.”

Neil Collcott, business manager at Barclays, Peterborough said: “We are supporting quite a few businesses in the Peterborough area to invest in their own freehold premises.  This gives any business the stability they need to plan for the future and creates those all-important local job opportunities that support the local and wider economy.”

Photo (l-r): Kevin Hobbs, Neil Collcott (Barclays) and Simon Foreman.

Employers urged to invest in education to upskill their workforces at University Studies, West Suffolk College

September will see the University Studies at West Suffolk College doors open to hundreds of degree students embarking on or continuing with its portfolio of foundation and bachelor degrees, degree apprenticeships, HNDs and HNCs. Currently, over 100 degree students at the college are sponsored by employers with organisations reaping many rewards. Graduates emerge from their studies ready to pursue high-level careers and students can study for a degree qualification flexibly to suit the needs of the employer and their own personal circumstances. Employer-sponsored degrees produce employees ready to do the job and develop; they balance an already recognised qualification with the skills employers demand. It is easier to meet businesses’ changing needs if they have personnel who have been taught new skills by expert lecturers, tutors and mentors in their chosen field. When staff feel their employer is willing to support their future with the company, it helps to build loyalty and in turn aids retention rates. Businesses that are an apprenticeship levy payer can also use their levy to fund higher and degree apprenticeships ensuring they open opportunities for all staff. This is certainly one to keep in mind for businesses that may have professionals that are interested in updating or developing any existing qualifications.

Photo: University students and staff

Gold award for sustainability for Cambridge college

Murray Edwards College, Cambridge has won a Gold Green Impact Award in recognition of its promotion of environmental sustainability. The college was given the accolade as part of Cambridge University’s accreditation scheme which encourages and supports colleges and departments to reduce their environmental impact and improve sustainability. The judges were impressed with various Murray Edwards’ initiatives including its clothes swap scheme, Green Formal and termly meetings, as well as the gardening team’s efforts to involve students. Teri Byrne, catering operations manager at Murray Edwards who coordinated the initiative, said: “It is particularly pleasing as we only entered the accreditation scheme three months before the workbook submission deadline and the fact we achieved Gold is down to the hard work and commitment of everyone in our team.”

Murray Edwards’ University of Cambridge Green Impact auditors said: “The work done over the past few months is impressive and it is nice to see such a motivated team. In particular the effort that has been put into the gardens to make it a space for biodiversity and for the community has been amazing to see.”

Photo: The Green Impact team at Murray Edwards College

Hospitality manager at Cambridge College wins national award

The catering & conference manager at St John’s College, Cambridge has won a major industry award for his contribution to educational catering in the UK. Bill Brogan was given the ‘Outstanding Achievement’ accolade at the annual conference held by The University Caterers Organisation (TUCO) in recognition of his work over many years. This included his running of a professional and successful hospitality operation at St John’s College and his dedication to innovation and sustainability. The award also recognised his support to TUCO in organising and hosting several study tours. Bill Brogan said: “I am absolutely delighted to win. TUCO is a great organisation which has grown in leaps and bounds over the last six years, in all areas including procurement, sustainability and support for the academy and study tours.” At St John’s College, Bill Brogan has championed sustainable catering by holding insect tasting dinners and inviting guests to share new developments with the team. He has also introduced a comprehensive staff training programme which includes topics as diverse as management training, front of house skills, wine appreciation and service, vegan cookery and allergy awareness.

Photo: left Bill Brogan from St John’s College receives his award TUCO chair Matt White.