Wednesday 12th August 2020
Home Weekly Business<br />E-newsletter ebusiness weekly news 09/12/2019

Weak orders hit activity but most firms hopeful of rebound

Private sector activity fell sharply in the East of England in November as new business weakened and Brexit uncertainty lingered but employment grew marginally and the majority of firms in the region still expect output to rise over the coming 12 months, according to a key survey of purchasing managers. The NatWest East of England business activity index fell from 50.2 in October to 47.3 in November, the lowest figure since mid-2012. As order books fell, companies continued to work through backlogs and  outstanding business fell for the thirteenth month running. ‘Positive sentiment’ slipped to its lowest level since August. But some 59 per cent of firms in the region expect activity to rise over the next 12 months based on hopes of strong demand, improved competitiveness and new markets. John Maude, NatWest Midlands & East regional board, said: “Brexit remains a key issue, with panellists linking political uncertainty to the falls in both output and order book volumes. Likewise, uncertainty continued to cloud firms’ output expectations in November, with the level of positive sentiment slipping to the third-lowest since the series began in 2012.”

Firms urged to boost essential digital skills

East of England businesses have stepped up protection against cyber threats but are showing a lack of interest in other digital tactics which could be holding them back, says a Lloyds Bank survey. A ‘security index’ of protection against hackers and fraudsters in the region jumped by 14 points on last year to 43 in line with the  national average. But the survey said 52 per cent of firms in the East of England lack the full range of essential digital skills, against 44 per cent nationally, which could be hampering sales and productivity. Businesses in the East also had a lower than average appetite to build their digital strategy and leadership skills and for securing skills in search engine optimisation, social media and marketing and customer data analytics. Matt Hubbard, Lloyds Banking Group’s ambassador for the East of England, said: “Our research found that an average small business in the UK with strong digital skills and behaviours earned around £260,000 more a year. This is money that could be spent on hiring more staff, training employees and growing the business. With more digital firms starting up in the East of England and investment planned for three new digital skills centres it’s clear that skills in areas like SEO, social media marketing and data analytics will become even more important for companies in the future.”

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Huntingdon Southern Bypass opens ahead of schedule

Highways England has opened the Huntingdon Southern Bypass one year ahead of schedule, as part of the £1.5 billion upgrade of 21 miles of the A14 between Cambridge and Huntingdon. The new bypass runs between Ellington and Swavesey and work on the rest of the project, between Swavesey and Milton, is on schedule for completion by December 2020. Natalie Chapman of the Freight Transport Association said: “Speaking on behalf of the UK logistics industry, FTA is thrilled Highways England has opened the Huntingdon Southern Bypass a year ahead of schedule...Our members rely on effective and efficient road networks to keep goods moving across the UK, but the A14 Cambridge to Huntingdon – a vital link connecting the East coast ports in East Anglia with the Midlands and the rest of England – has long been plagued by congestion and safety issues. The bypass... will help to boost connectivity, reliability and journey safety for commercial vehicle operators and private road users alike."

Concern grows over late payments

Confidence among companies in the East of England is low but marginally higher than the general UK picture although late payments is taking its toll on firms in the region, according to accountancy body ICAEW’s latest businesst confidence monitor. Brexit uncertainty is hindering confidence and the share of firms citing late payments as a worry has risen from 21 per cent last quarter to 24 per cent now; the joint highest rate for the East of England in more than six years. Almost half of businesses in the East also cite customer demand as a growing concern and businesses are seeing weak exports growth. Harpreet Panesar, ICAEW East of England regional director, said: “Negative business confidence in the East of England is likely being driven by uncertainty around Brexit and the wider political climate. We hope that the new government will ease the strain on businesses and bring some much-needed stability to the economy.”

Farming businesses outperform but construction and hotels sectors at higher risk

East of England agricultural businesses are outperforming their counterparts elsewhere in the country but firms in the region's construction and hotels sectors are facing higher levels of insolvency risk, according to the sector trade body R3. November figures from R3's Eastern branch show that only around one in three agricultural businesses are at higher than normal risk of insolvency, which is one of the lowest statistics for the sector in the UK. But the Eastern construction sector has the third highest proportion of operators at above average risk of any UK region with almost half – 45.6% – having an elevated risk of insolvency. Some 37.4 per cent of Eastern hotel companies were judged to be at an elevated insolvency risk in November, compared to a national average of 32 per cent. R3 Eastern chair Mark Upton, a partner at Ensors Chartered Accountants in East Anglia, said: “It is encouraging to see local agricultural businesses outperforming their national competition but the regional picture overall is no cause for celebration. We have to be realistic that the East of England, and the UK as a whole, continues to face some strong economic challenges. Uncertainty and stop-start stockpiling are among the factors hitting local investment and wider business health, and members of the insolvency and restructuring profession report anecdotally that they are seeing increasing numbers of companies worrying about their cashflow levels and order books."

Water utility invests using green bonds

Anglian Water says it has funded 850 capital investment projects through green bonds worth £811 million since it became the first European utility to launch a sterling version of the financial instrument in 2017. Anglian now operates five green bonds – which come with commitments to climate change, conservation and on pollution – and a sixth which it is ready to draw down in 2020. The utility says investments made through the green bonds issued so far are expected to save or avoid around 161,000 tonnes of carbon - a 61 per cent cut since 2010. The company has pledged to reach net zero carbon by 2030, as part of the water industry's recent public interest commitment. Steve Buck, chief financial officer at Anglian Water, said: "We made history in 2017 when we became the first ever public utility to launch a sterling green bond, and we are very proud that all our capital activity meets the strict environmental criteria set for green bond investment. Sustainability is simply how we do business, all day, every day."

New flagship hq in Ipswich topped out

To mark progress on Fred. Olsen’s new flagship hq in Ipswich, developer Artisan (UK) Developments recently invited directors and senior managers from Fred Olsen, Fred Olsen Cruise Lines and Fred Olsen Travel to a ‘topping out’ ceremony on the top floor of the new building. Work on the project started in April 2019 and is due for completion by mid May 2020. Refurbishment of the existing Fred. Olsen House next door in Whitehouse Road will then start with final completion of the extended hq by the end of 2020. The completed project will increase space from 14,000 to 32,000 sq ft. Artisan (UK) Developments managing director Michael Eyres said: “Artisan had approached Fred. Olsen on a number of occasions about the potential to rationalise their different locations in Ipswich into a single, combined hq, with either a new stand-alone building, or by extending their existing office in Whitehouse Road onto our site next door. In October 2016, those discussions started to come to fruition and, by working together over the next two years, an agreement was reached that delivered the best possible outcome for both companies.”

Fred Olsen’s chief financial officer Belinda Mitchell said: “This is an exciting and significant investment for Fred. Olsen, both in terms of our continued commitment to our businesses and to the local area. It will ensure that we have facilities suitable for growth in the future.”

New partner appointed

Andrew Mason has joined RSM having spent most of his 25-year career working in the Cambs market for mid-tier firms, most recently focusing on early stage and growth companies. He has wide experience working for a wide range of organisations, from owner-managed and private equity businesses, to large international groups in the mid-market and in a variety of sectors including technology, manufacturing, and consumer markets. Laragh Jeanroy, managing partner for RSM in East Anglia, with offices in Bury St Edmunds and Cambridge (right with Andrew Mason ) said: “I look forward to working closely with Andrew to continue the growth of our Cambridge office. The Cambridgeshire market forms an important part of our wider regional strategic growth plan.”

Andrew Mason said: "Cambridge is a dynamic and fast-growing market and I am very excited to be joining a firm and team that is so ambitious for the city and region. I look forward to helping local entrepreneurs and businesses to capitalise on this growth and bringing the best of RSM to the market."

Third profit warning can a ‘knock-out blow’

The software and computer services sector has regularly issued the highest number of profit warnings in East Anglia over the past 20 years but in the last ten years electronic & electrical equipment (16) has claimed the top spot, according to EY. Its analysis of profit warnings over the past 20 years also found that the third consecutive profit warning to be a ‘bruising or even a knock-out blow’ for listed businesses in the region. A major restructuring such as administration, distressed sale, CVA or debt restructure can follow within a year of issuing three or more profit warnings. East Anglia saw a peak in the number of warnings issued in a year in 2001 (19) after a low in 1999 (three). Over the past 20 years, the highest number of warnings were in software and computer services (40), electronic & electrical equipment (34) and household goods & home construction (21). Stuart Wilkinson, office managing partner at EY in Cambridge, said: “In the last two decades we’ve seen radical changes not only in technology, but also our economy and capital markets. In 2019 news travels fast, and capital also moves with increasing pace. Combined with a heightened level of uncertainty, this has significantly changed the speed of stakeholder response to profit warnings.” Thursday is the most common day to issue a profit warning.

Law firm launches course for effective recruitment

The employment team at law firm Birketts has launched a new Shaping Excellence course focused on effective recruitment. Tailored to help people managers deliver a fair recruitment process in line with discrimination law requirements, it will provide practical advice and guidance across all the recruitment stages. Birketts’ half day workshop will offer an overview of the recruitment process, from preparing job descriptions, to dealing with pre-employment health questions and protected characteristics, to providing legally compliant references for departed employees. It will also provide a comprehensive outline of the process and its hazards, offering advice on everything from producing job adverts that guard an organisation from being exposed to discrimination claims, to tips for recognising unconscious bias. Sam Greenhalgh (right), senior associate in Birketts’ employment team said: “Effective recruitment training is important not just to ensure that the best person is hired for the job, but also to protect the employer, placing them in the best possible position to defend - or indeed prevent - any challenge to a recruitment decision. Recruitment training is a pragmatic and proactive step for any organisation seeking to strengthen itself against an increasing number of discrimination claims.”

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Ipswich-based software company reaches milestone

An Ipswich-based company has reached a major business milestone – more than 150,000 companies are now managed using its award-winning company secretarial software. Inform Direct first launched its software in 2013 to help accountants and business owners comply with company secretarial requirements. The number of users has grown rapidly, passing the 100,000 mark in 2018 and over the last 12 months has seen a further 50,000 companies using its software with many highlighting its greater accuracy and significant time-saving. The rapidly-expanding team at Inform Direct – which now totals 14 – offers technical support to new and existing customers to help them maximise their use of the software. Inform Direct CEO Henry Catchpole said: “Achieving 150,000 companies on the platform is a major milestone and welcome recognition that our software is benefitting a growing number of accountants and business owners. We continue to expand the functionality of our product mainly in response to customer suggestions that would help them even more. All members of our team here must take credit for reaching this milestone.”

Photo: The Inform Direct team celebrates more than 150,000 companies using its company secretarial software.

Cambs company launches ‘wellness programme’ for employees

Cambs-based Domino Printing is showing its commitment to promoting a healthy lifestyle for its employees with the launch of a new wellness programme. The firm has introduced a range of initiatives focusing on mind and body, including workshops on creating wellness, managing stress and mindfulness. Postureworx Sports Massage is on offer two days each month to reduce reduce muscular tension, discomfort and pain and the company has set up a programme to train a cohort of mental health first aiders (MHFAs). To date, 16 MHFAs have undergone a two-day intensive training course run by the mental health charity Cambridgeshire, Peterborough & South Lincolnshire Mind.  Other services on offer to employees include free flu jab clinics for which more than 70 people have signed up and discounted gym memberships. Sharon Budworth, head of HR, UK & EMEA, said: “Since we launched the Wellness Programme, we have received really positive feedback on the different activities which employees feel are so relevant for today’s lifestyles.”

Photo: Members of the Domino Mental Health First Aiders team.