Sentiment amongst SME manufacturers remains weak as output falls and cost and price inflation remain high
Business confidence amongst the UK’s SME manufacturers remains weak, with sentiment having fallen for the fifth consecutive quarter in the three months to January.
The CBI’s latest SME Trends Survey paints a mixed picture for the quarter to January. Output contracted for a second successive quarter, but less quickly than in the previous quarter, and new orders stabilised following a steep drop in the three months to October. Both output and new orders are expected to be unchanged in the three months ahead.
Both cost and price growth eased slightly for the third consecutive quarter. But cost and price inflation remain high by historical standards and they are expected to remain so in the three months to come.
The number of people employed by SME manufacturers edged up in the three months to January, but at the slowest pace since April 2021. Headcount is expected to rise slightly faster in the next three months. However, SME manufacturers continue to see a shortage of skilled labour as a key constraint on output in the quarter ahead, alongside uncertainty over orders and ongoing shortages of materials or components (though concerns about the latter have eased from their peak in April 2021).
Against this backdrop, SME manufacturers expect to reduce investment in buildings and in plant and machinery over the next 12 months. Innovation spending is expected to be flat, though expenditure on training is tipped to rise.
Ben Jones, CBI lead economist, said: “SMEs in the UK’s manufacturing sector continue to face significant challenges. Cost pressures remain high and concerns about future demand are weighing on optimism.
“The recent decline in output may be bottoming out, with output expected to be steady in the coming quarter. But SME manufacturers still lack the confidence to invest.
“Businesses will be looking to the Government for signs that the Spring Budget will include actions to get firms investing and help the economy regain some momentum.”
Rolls-Royce talks to Czech Republic over deployment of SMR nuclear technology
Rolls-Royce SMR Chief Exec Tom Samson has led a delegation to the Czech Republic to discuss plans for deploying a fleet of small modular reactors there.
Derby-based Rolls-Royce SMR has been working with leading Czech utility company CEZ on plans to deploy SMRs to provide long-term energy security, meet net zero targets and decarbonise both electricity networks and industry.
The visit, building on an agreement signed between the two companies in 2020, looked at the routes to deploying Rolls-Royce SMRs – the UK’s sovereign nuclear technology – in the Czech Republic and at opportunities to build on expertise in the supply chain from both countries.
Mr Samson said: “There is a significant opportunity to export our British technology to the Czech Republic and the wider region in support of their low-carbon energy aspirations. Rolls-Royce SMR has developed a factory-built power station that can provide clean, affordable electricity for generations to come.
“The Czech Republic has a strong nuclear heritage and, by combining the skills and expertise from the two countries, we can find a route to bring this technology here by the early 2030s, in a way that brings huge benefits for all.”
The senior representatives from Rolls-Royce SMR were joined by The Minister of State for Trade Policy, Greg Hands. Mr Hands said: “Exporting not only helps businesses grow, but also supports jobs, drives productivity and boosts the economy.
“I’m proud to be supporting Rolls-Royce SMR in Czech Republic and hope these discussions lead to exciting opportunities for the British brand.
“As the recent Energy Minister, I understand the important role small modular reactors offer for enhancing energy security.”
The visit included a trip to Skoda JS and Doosan Skoda Power manufacturing facilities in Pilsen which, alongside Rolls-Royce SMR factories in the UK, could form an important part of the plans to deploy Rolls-Royce SMRs in the Czech Republic.
Derbyshire is promoted to the world to reboot visitor economy
Derbyshire and the Peak District have been promoted to the world at major travel events in Dublin and London to reboot the visitor economy.
Jo Dilley, MD of Visit Peak District & Derbyshire, says: “Increasing international travel to the Peak District and Derbyshire is crucial for the recovery and growth of the visitor economy. Being part of these important face-to-face events helps showcase the area as a world-class destination for both international visitors and key travel trade buyers, inspiring visits from overseas markets which are continuing to build their confidence about returning to the UK again.
“There are lots of potential opportunities for the area to benefit from some big events happening in 2023, with international visitors expected to take a keen interest in both the Eurovision Song Contest in Liverpool and King Charles III’s Coronation, which gives us plenty of reasons to shout about the Peak District and Derbyshire as a must-visit holiday destination.”
Visit Peak District & Derbyshire showcased the destination to an estimated 40,000 visitors at Ireland’s biggest annual travel exhibition, the Holiday World Show, in Dublin and also met key international travel trade representatives at VisitBritain’s Showcase Britain event and the Britain & Ireland Marketplace, both held in London.
While capturing demand from the rise in domestic staycations has been a key part of their recovery marketing efforts, keeping international markets warm has been just as important, and the Holiday World Show was the first large-scale opportunity the organisation has had since the pandemic to promote the Peak District and Derbyshire to overseas visitors and travel trade buyers.
Visitors to the Visit Peak District & Derbyshire stand were given information on the destination’s vibrant tourism offer and had the chance to taste quality local produce with whisky samples from Ambergate-based White Peak Distillery. Visitors also had the opportunity to win tickets to Chatsworth, an iconic cultural attraction for international tourists.
Visit Peak District & Derbyshire’s work to increase international visitor numbers is in line with its key aims to drive visitor spend, boost overnight stays, and extend the tourism season.
Inbound tourism has been identified as a key driver of recovery and economic growth and VisitBritain predicts international visits to the UK will total 35.1 million in 2023 (86% of 2019 levels), with a spend of £29.5 billion (104% of 2019 levels).
Walkers buys land for new plant from Leicester City Council
Land close to Walkers Snack Foods’ main factory site in Leicester is being earmarked as the location for a potato washing plant after the company agreed a £3.5m purchase of the 6.4-acre site near Thurcaston Road with the city council.
The sale, which could bring at least 40 jobs, is conditional on planning permission and developer legal agreements, but providing these are in place, construction of the new building could get under way this summer.
Walkers’ new facility will wash and grade potatoes from farms around the UK in one location, with this centralised operation reducing both the number of transport movements and the amount of water used to prepare the potatoes for processing.
When complete, it will also collect the soil removed from the potatoes and return it to the fields – and, as part of the sustainable process, Walkers also plans to transform leftover potato peelings into fertiliser, using state of the art equipment on site.
As part of the terms of the land sale, the council will fund a £2.25m estate road to serve the new plant and open up access to adjoining land owned by the council at Ashton Green, creating future employment opportunities.
City Mayor Peter Soulsby said: “Walkers Snack Foods are a long-established and important employer, so I’m delighted that this agreement will help them expand and consolidate their operations in Leicester.
“This site at Ashton Green is within an area allocated for employment land in our local plan and Walkers have offered us a very fair price, so it’s a great deal for Leicester on every level.
“The new facility will operate sustainably and create new jobs, while the new estate road will help us unlock the potential of further development land at Ashton Green that will lead to many more jobs for local people.”
Leicester City Council is the principal landowner and promoter of Ashton Green, a sustainable urban extension to the north of Leicester comprising 320 acres of greenfield land. When complete, it will provide up to 3,000 homes, employment land, retail space and around 13 acres of green space.
Developers forced to sign contracts to repair unsafe buildings
Developers of multi-storey buildings have been given a six-week window to sign legally binding contracts that will commit them to pay to repair unsafe buildings, and the government is warning that companies who fail to sign and comply with the terms of the contract will face significant consequences.
Legislation will be brought forward in the spring giving the Secretary of State powers to prevent developers from operating freely in the housing market if they fail to sign and comply with the remediation contract.
The contract, which has been drawn up by the Department for Levelling Up, Housing and Communities, will protect thousands of leaseholders living in hundreds of buildings across England. These innocent households would otherwise face costly repairs for serious safety defects, including non-cladding related issues.
Under the contract, developers will commit an estimated £2 billion or more for repairs to buildings they developed or refurbished over the past 30 years. This means that together with the Building Safety Levy, industry is directly paying an estimated £5 billion to make their buildings safe.
The contract also requires developers to reimburse taxpayers where public money has been used to fix unsafe buildings.
This follows Secretary of State for Levelling Up, Housing and Communities, Michael Gove, demanding developers are held to account, which led to public pledges from 49 of the country’s leading developers that they would take responsibility to fix their own buildings, which will now be turned into legally binding commitments.
Secretary of State for Levelling Up, Housing and Communities, Michael Gove, said: “This marks another significant step towards righting the wrongs of the past and protecting innocent leaseholders, who are trapped in their homes and facing unfair and crippling costs.
“Too many developers, along with product manufacturers and freeholders, have profited from these unsafe buildings and have a moral duty to do the right thing and pay for their repair. In signing this contract, developers will be taking a big step towards restoring confidence in the sector and providing much needed certainty to all concerned.
“There will be nowhere to hide for those who fail to step up to their responsibilities – I will not hesitate to act and they will face significant consequences.”
Dean Finch, Group Chief Executive at Persimmon, said: “Persimmon was proud to lead the industry two years ago with our original pledge to protect leaseholders. Since then, we have been making good progress on remediation and aim to be on site on all developments by the end of the year.
“The publication of the developer remediation contract is the culmination of many months of hard work on all sides and we are pleased to confirm our intention to sign the final document in the near future, becoming the first developer to do so.
“The terms of the contract are entirely consistent with our existing commitment to protect leaseholders in multi-storey buildings we constructed from the costs of remediating cladding and life-critical fire-related safety issues. We are pleased to reaffirm this commitment today and that we were able to work constructively with the Government to secure the agreement.”
Government dangles £1m carrot to attract SME safety ideas
A million pound fund for new ideas to boost health and welfare at work for SMEs and the self-employed has been launched.
Tom Pursglove, Minister for Disabled People, Health and Work, said: “Good occupational health within workplaces is vital in supporting our overall health and standard of living. We spend so much of our lives at work, and it is imperative that our employers can give us the support we need to maintain our physical and mental health. This in turn means we can give our best at work.
“Through the launch of our new £1 million fund, I look forward to seeing innovative, workable solutions to help SMEs deliver the best for their employees, creating healthier, welfare-driven working environments that will ultimately drive growth and improve people’s working lives.”
Successful bidders will receive up to £100,000 to back their projects from May this year, with the Government looking for innovative solutions to drive better access for SMEs and the self-employed to Occupational Health services. Applicants are being encouraged to demonstrate how they would deliver improvements to OH, harnessing technology such as artificial intelligence or data collection, to deliver better health outcomes for employees of SMEs.
Better health provision for staff helps employers look after their workforce, meaning more are likely to stay in work. While larger employers often have better access to OH services, for smaller businesses and the self-employed the lack of support for people with health needs can potentially lead to more people becoming economically inactive.
Applications can be from those who work alone or with others from business, research organisations, research and technology organisations or the third sector, with the Government looking for proposals to:
- Discover new and innovative ways for the OH market, which supports people to stay well in work, to deliver services that drive better access for SMEs and self-employed
- Discover new and innovative ways that the OH market can deliver services and better serve the demand for OH
- Deliver innovations that can be scaled up for businesses to have an impact in the OH market through new services and better use of technology
The competition is a joint venture between the Department for Work and Pensions (DWP) and The Department for Health and Social Care (DHSC), as part of the Joint Work and Health Unit, and in conjunction with Innovate UK, an arm of UK Research and Innovation. The fund will be open to applications from 30 January 2023 and run until 15 March 2023.
The new Fund to Stimulate Innovation in Occupational Health (OH) competition will be delivered in the form of a Small Business Research Initiative, a well-established, output driven funding tool run by Innovate UK.
For more details about the Fund to Stimulate Innovation and how to apply, visit this link.
Stay informed at Streets Chartered Accountants’ Annual Payroll & HR Update 2023
Whether you have just one employee or a large workforce, you do payroll in house or use a payroll bureau, Streets Chartered Accountants’ Annual Payroll & HR Update 2023 aims to keep you informed of the issues, regulations and changes affecting payroll management and compliance.
Taking place on Friday 10 February, 11am – 12 noon, the virtual event will also consider the tax implications and changes around staff employment and employee remuneration.
Last but not least it will look at the broader HR matters that may concern employers now and in the year ahead, along with the potential impact of changes to and the introduction of new employment legislation.
Payroll – a topical update and refresherTheresa Waddingham – payroll director, Streets Chartered Accountants Theresa’s presentation will focus on the forthcoming changes affecting payroll as we start a new tax year, along with some useful hints and tips to make your life easier to ensure that those charged with payroll are on the right track. Her presentation will include the following:- Tax codes from employer/payroll perspective – best practice
- NMW/NLW rates for 2023
- NI/Tax/Statutory Payments
- Payroll and overseas employees
- The true cost of pay rises
- The benefits of outsourcing payroll
- What the future holds – future bills on their way through parliament with government backing including flexible working, carers leave, protection from redundancy and employment allocation of tips
- Salary Sacrifice
- EV Company Cars
- Company Cars versus private car use
- IR 35
- Working from home allowances
- PAYE Reviews and investigations
- An employer’s responsibilities to support employees during a cost-of-living crisis
- What is a ‘typical’ pay rise?
- What else employers can do to retain and engage their employees instead of and as well as pay rises
To register for the event click here.
The presentation will be recorded and available on demand for those not able to join live. Simply register to receive a link to watch on demand.Local company commits to future in Hinckley
Local company, Geosynthetics, which supplies product solutions to the civil engineering sector, is relocating to a new 60,000 sq ft Net Zero Ready unit on IM Properties’ Hinckley Park scheme.
The move retains 50 jobs in the region, consolidating three sites into a single, sustainable unit to future proof Geosynthetics’ operations.
Established 25 years ago by Hinckley man, Chris Foxton, and now led by Nuneaton born Managing Director, Tracy Woods, Geosynthetics has grown from a home business to an annual turnover of £12 million.
“We’ve been looking for a while and we’re relieved to be staying in Hinckley,” says Woods, who herself started as a trainee salesperson at the company, age 16.
“The local people are our business and when we got into discussions with IM Properties about its Hinckley Park site, there seemed so many synergies, we just knew we had to make it happen.”
Located next to junction 1, M69, Hinckley Park has already created jobs for 1,500 people, as home to one of Europe’s largest and most technically advanced parcel depots, owned by DPD and a 532,000 sq ft unit let to Amazon.
Woods continued: “Sustainability is central to our business and all our lives, so securing an industry leading BREEAM Excellent, EPC A rated building reflects our values and commitment to the future generations we’re looking to employ.
“We’re a very family orientated business which offers flexible working hours, has 60 per cent women in its senior management team and constantly strives to look after the wellbeing and career aspirations of those we employ.
“We’ve got trainees of 20 years ago, now acting as mentors to the new apprentices coming through. If people want to progress, we always find a pathway. Seeing people grow is our biggest pleasure.”
Geosynthetics’ unit will sit alongside a new Net Zero Ready, 340,000 sq ft spec unit and a 47,000 sq ft unit on phase three of the 18-acre scheme.
Harry Goodman, development manager at IM Properties, said: “We welcome the opportunity to work with a real local success story and provider of first-class employment in the area.
“Like us, Geosynthetics have developed strong links with the local schools and colleges, recognising the importance of investing in young people by providing them with skills and training.
“It’s fantastic to work in partnership to facilitate this growth opportunity for Geosynthetics. It would have been a big blow to the area if they had had to look further afield for a new HQ.”
Life science company takes space at MediCity Nottingham
ValiRx PLC, a life science company focused on early-stage cancer therapeutics and women’s health, has taken the lease on laboratory and office facilities at MediCity Nottingham as it embarks on the next stage of its strategy to launch a translational Contract Research Organisation (tCRO).
Based in Beeston, MediCity is a medtech incubator and part of Pioneer Group, and provides resident businesses with access to a connected local and national biotech community, a strong pool of quality talent from nearby universities, and flexible laboratory space.
ValiRx’s new facilities include 910 sq ft of laboratory space which will accommodate up to eight lab-based staff members.
Historically, ValiRx has operated as a virtual biotech company, outsourcing all testing of evaluation and preclinical projects to external contract research organisations (CROs).
The new laboratory infrastructure will allow ValiRx to conduct all testing in-house, with the aim of creating a more efficient and effective translational drug development service for both internal and third-party use.
ValiRx CEO, Dr Suzy Dilly explains: “We are delighted to have signed the lease of our new laboratory which gives us the opportunity to develop and launch our external tCRO service offering, as well as accelerating the development of our internal drug development programmes at a reduced cost.
“Nottingham offers the ideal base for the new lab, having established itself as a hub for life science companies and affording access to a strong pool of local scientific skills and talent. Work now begins on building a first-class scientific and operational team and implementing testing techniques that will help to improve biological understanding of ValiRx’s collaborative development pipeline and, in due course, third party services.”
Dr Cathy Tralau-Stewart, who has recently joined ValiRx as CSO on a permanent basis, says: “ValiRx is progressing an innovative portfolio of projects to address the important areas of oncology and the unmet need for treatments in the women’s health space. The development of the tCRO is an important step forward and will fill the gaps that exist for robust and reliable validated translational models in these areas.”
Dr Dilly adds: “Setting up our own laboratory will enable us to carry out more science, more quickly, efficiently, and cost-effectively, and provides us with a strong framework to identify additional capabilities and technologies to acquire and incorporate into the business in the longer term.”
Just Vehicle Solutions goes full throttle with expansion
Just Vehicle Solutions, the Newark-based car and van leasing company, run by father and son Terry and Jake Matthews, has expanded its premises and car and van rental service to support the rising local demand for short-term car rental.
Just Vehicle Solutions was established in 2014 and has successfully grown its rental fleet to over 230, having experienced an unprecedented boom in lockdown Britain due to their flexible leasing terms for 6- and 12-month vehicle rental.
For this local independent, Covid-19 provided the perfect storm; local demand for short-term hire increased at pace. More and more people wanted to downsize vehicles or work from home, which fuelled a need for short-term flexible rental solutions. A demand that continues to speed on.
The family firm has responded once more and this time has extended its premises on Northern Road, Newark, enabling it to increase its fleet and the local demand for daily and weekly short-term hires.
The new daily and weekly short-term hire service launched in November 2022 and is already proving a big hit with local commuters. In just the first two months, it has generated £10k of business sales for this local independent.
Jake Matthews, Managing Director, said: “Whether it’s a van for the weekend, a breakdown, or an executive meeting away, we have a range of enquiries. We’ve also added electric vehicles to the fleet, so if people are looking at electric vehicles for the first time, they can hire one for a week and see if they like it.”
The journey continues for this simplistic vehicle solutions provider as they have also added vehicle sales to their fleet.
Jake said: “We have really extended our offer in the last year in response to customer demand. We were getting more and more enquiries from customers who want to purchase vehicles at the end of their rental contracts.
“Customer service is important to us, and rather than send customers elsewhere; we have started offering finance options to allow our customers to buy vehicles at the end of rental periods. This allows us to be a one stop vehicle shop in Newark for cars and vans anywhere from 1 day onwards.”
To support the fleet growth, Just Vehicle Solutions plans to increase its workforce and is looking for new sales executives to join the team, along with two further apprenticeship opportunities.
A former apprentice, Jake advocates apprenticeships, believing the rounded approach gives the best foundation for any career.
“We will be looking to recruit our 3rd and 4th apprentices to start in September. When they join us, we like to give them experience across the business from operations, finance, a little bit of sales to more day-to-day roles like the daily & weekly rentals.”
For more information, please visit www.justvehicle.solutions
Revenue up at Microlise Group
Revenue is up at Microlise Group, the Nottingham-headquartered provider of transport management software to fleet operators, according to a full year update on trading for the year ending 31 December 2022.
The company expects to report year-on-year revenue growth of 5% to £63.2m, despite industry headwinds caused by microchip supply chain issues and delays in project deployment with non-OEM customers. This resulted in non-recurring revenues slightly below forecasts.
However, the firm delivered record levels of OEM sales which impacted sales mix and had positive working capital effect. As a result of the change in sales mix, annual recurring revenues grew at a faster rate than revenue, by 10% to £42.6m, with recurring revenues now representing 64% of the total.
Meanwhile EBITDA is slightly ahead of market expectations.Nadeem Raza, CEO, Microlise, said: “I am delighted to report that we shipped more units than ever during 2022, despite the well-documented supply chain issues that clouded our markets throughout the year. This pays testament to the strength of our products and the quality of our staff who have been agile and resourceful in the face of any issues, adapting where appropriate while improving efficiencies and the positioning of our company.
“Also, our new Great Place to Work (GPTW) accreditation reflects the passion and positive attitude of our people, all of whom are committed to building a supportive atmosphere. It recognises our commitment to staff and further establishes Microlise’s high-performing workplace culture.
“Although we can expect supply chain issues to continue to impact our markets in 2023, we do anticipate improvements during the second half of the year. This, combined with a record order book and healthy pipeline of opportunities across all the markets in which we operate, gives us confidence for the year ahead.”
Revenue increases at Mortgage Advice Bureau despite impact of mini-budget on mortgage market
Full year revenue increased at Mortgage Advice Bureau (MAB) in 2022, despite the immediately negative impact of September’s mini-budget on the mortgage market.
According to a trading update for the year ended 31 December 2022, the Derby-based group grew revenue by 22% to circa £230m.
The acquisition of The Fluent Money Group on 12 July 2022 added £22m of revenue.
The company’s adjusted profit before tax for the year is anticipated to be in line with expectations.
With the start of the new year, MAB noted that current activity levels are below those seen this time last year. However, towards the very end of January there have been early signs of increasing lead volumes and written business across the group, which MAB anticipate will build steadily as borrowers gain confidence in a more stable macroeconomic and interest rate environment.
The firm said that current trading is in line with expectations.
Peter Brodnicki, CEO of MAB, said: “Despite the uncertain macroeconomic outlook, MAB remains very well positioned to grow its market share strongly again through 2023. In times like these housing transactions are typically postponed, not lost, and the opportunity these conditions generate for new AR recruitment will benefit MAB in the medium term.
“The technology we have developed to help our AR firms optimise lead flow from existing lead sources and clients will help support an H2 recovery, and boost firm and adviser performance in all market conditions. Strong and effective lead flow has a heightened importance in times where purchase activity slows.
“We anticipate a very strong year ahead for re-financing, a slow but steady improvement in consumer confidence and housing transaction levels, combined with an increase in new AR recruitment and the incremental impact of new lead generation initiatives. I am confident that whilst continuing to grow market share this year, MAB will be in a very strong position to regain significant momentum in 2024.”
Car company in top gear as dealership completed
Construction of a major new premium used car dealership in Northamptonshire has reached practical completion.
Premier Car Supermarket has expanded into Kettering with the completion of the new facility on a 3.55-acre site at Cransley Park.
The premium used car retail operation, which has other dealerships in Derby and Leicester, is creating new jobs at the dealership which is located off the busy A43 at its junction with the A14 at Junction 8.
The development includes a sales building incorporating a workshop and repair bay with external car wash facilities. There is also customer and visitor parking with most of the spaces for display sales vehicles. Other work included landscaping the site.
Keir Edmonds, Managing Director at MCS Group, said: “The entire MCS Group team involved in the construction of the new Premier Car Supermarket at Kettering can be extremely proud of the fantastic new facility they have delivered. It has been a pleasure to work alongside the company on the project and we wish them huge success.”
Premier Car Supermarket Chief Executive Neil Chapman said: “We are delighted to bring this growing brand to a new store in Kettering, and proud to be generating a number of new jobs and exciting new business opportunities for the town and surrounding areas.
“The new site is in a great location and gives us access to thousands, if not millions of potential customers within a specific drive time radius. Car buyers will now have better access to our convenient, friendly and guided buying experience and hundreds of cars across the Midlands.”
Premier Car Supermarket’s new dealership is adjacent to a new 1,800 sq ft drive-thru Costa Coffee outlet at the entrance to the recently constructed 270,000 sq ft Cransley Park industrial warehouse development.
Revenue hits record levels at Belvoir
Revenue has hit record levels at Belvoir Group, the property franchise and financial services group with its central office in Grantham.
According to a pre-close trading update for the year ended 31 December 2022, group revenue increased 13% to £33.5m, up from £29.6m 2021.
The business noted that the housing sector performed better in 2022 than many commentators had forecast at the start of the year, with UK residential sales transactions down 15% on 2021, but around 6% ahead of pre-pandemic levels, and rents on new tenancies increasing by 10.8% during the year.
As a result, Belvoir’s financial performance for the year, including profit before tax, is anticipated to be slightly ahead of managements’ expectations.
Revenue from the financial services division increased by 24% to £17.9m, while revenue from the property division was up 1% to £15.5m.
During the year the Belvoir Group acquired TIME Mortgage Services and Mr and Mrs Clarke (MMC).
Dorian Gonsalves, CEO, said: “I am delighted to report that during 2022 our acquisition strategy both at group and at franchisee level enabled Belvoir to both extend its service offering and mitigate the lower level of activity in the housing market following the exceptionally strong conditions in 2021.
“Our property franchisees and financial services advisers are highly motivated entrepreneurs who continue to demonstrate the ability to make the most of the opportunities presented in all market conditions.
“Our property franchisees benefit from significant recurring lettings revenue that contributes around 56% of group gross profit and our financial services advisers have substantial client books from which to offer remortgages and other financial products, so are not entirely reliant on new mortgage business.
“Whilst we anticipate continuing challenging market conditions in 2023, we remain confident that the resilience and diversity of our business model will enable the group to perform well against the market as a whole. As always, the Board will continue to identify suitable acquisition targets to support continued growth and enhance shareholder value still further.”
Profitability in 2023 as a whole is anticipated to be slightly below 2022 and is expected to return to an upward trend in 2024. This is due in part to the mini budget in September 2022 creating a high degree of uncertainty within the property and related financial services markets.
Between August and December, base rates doubled from 1.75% to 3.5% which led to a rapid rise in mortgage lending rates, the withdrawal of many mortgage products by lenders and a tightening of mortgage criteria. This impacted on instruction levels for house sales and demand for mortgages in Q4 which will in turn impact trading in H1 of 2023.
While the Autumn statement reversed many of the fiscal initiatives proposed in the mini budget, which somewhat reassured borrowers and lenders, and the level of sales instructions and mortgage applications to date in 2023 have shown signs of improvement compared with Q4 2022, the recovery is expected to build slowly over the year.
Belvoir noted that given the lead time from instruction to completion of a house sale and from mortgage application to drawdown can be up to five months, the improvement in activity in H1 is not likely to flow through into financial performance until H2.
Ideagen soars with Air India
Nottinghamshire-headquartered software company Ideagen is set to support Air India with end-to-end safety management.
The airline joins 750 aviation and aerospace organisations worldwide already using Ideagen to support them with their quality and safety operations.
Ideagen software covers all aspects of risk, giving management full visibility of safety data from maintenance of the aircraft through to cabin crew checks on board. It provides the Air India leadership team with complete visibility across their entire organisation, allowing them to access the latest data and use this to spot and mitigate potential risks, enhancing the safety of their operations.
Ideagen CEO Ben Dorks said: “We are honoured to be supporting Air India to continue to assure the safety of their passengers, crew and high-skilled workforce.
“Air India, like Ideagen, are in an exciting period of growth, adding more routes to connect India with the rest of the world and we are delighted to be with them on that journey.
“As an expert in software solutions within regulated and high-compliance industries, we have a strong pedigree in quality management, health and safety, risk mitigation, auditing, training and collaboration software. Air India customers can be assured that they are in safe hands.”
Henry Donohoe, head of Safety, Security and Quality, Air India, said: “We are going for a significant and substantial upgrade of our existing systems and processes to ensure seamless flow of intelligence and data on a real time basis.
“Ideagen Coruson is trusted by aviation industry globally for risk mitigation, auditing and training. Its induction will go a long way in enhancing our capabilities for the safety and well-being of our passengers and crew, particularly at a time when Air India is rapidly expanding its network on both national and international routes.”
2023 Business Predictions: Jason Hercock, Andrew McFarlane Holt and Trevor Wells, directors at Wells McFarlane
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Jason Hercock, Andrew McFarlane Holt and Trevor Wells, directors at Chartered Surveyors and Property Consultants, Wells McFarlane, who present their views on the future of the office, industrial and land markets in 2023…
“It’s unlikely the office market will experience much variation from the past 12 months; the old adage of the high-quality properties attracting interest and tenants will certainly remain true,” says Jason. “This is not only compounded by a shortage of labour and skilled people, but also the rising costs of fuel and living impacting on the workforce’s willingness to commute. Offices in accessible locations with good transport links such as rural market towns will be the most desirable, followed by those on city perimeters or semi-rural locations.
“From a landlord perspective, perception is critical. There’s an oversupply in the market so premises that are modern, energy efficient, flexible enough to facilitate hybrid working, and located in a well-connected environment that stimulates creativity and productivity will be the most in demand, so it’s advisable to talk to your agent about how best to market your property. I’m also starting to see a pleasant rebalancing in terms of freehold office space. Pre-Covid, there were very few available but with the changing interest rates and working patterns, an increase in freehold supply is emerging that could offer businesses alternative options next year,” concluded Jason.
The demand for modern, high-quality units looks set to be the same in the industrial sector, as Andrew explains. “The better quality, thermally efficient buildings, like the Net Zero ready one at Hinckley Park we’ve just launched for IM Properties, will always hold their value and be well sought-after despite market conditions. We must expect the general uncertainty to be reflected in tenant enquiry levels, but in any recession there are still businesses up- and downsizing, meaning activity in the market. In certain areas, and on certain properties, I anticipate corrections in prices will be needed – tenants will be looking for deals and this will be the primary motivation for relocation – but the Midlands boasts excellent transport links and a strong labour pool, so is in a positive position and deals will continue.”
On the land side, despite the announcement from government that housing targets will not be mandatory, there will still be pressure on the housing market, and therefore land supply. Trevor says: “Development land is already in short supply, and these changes are likely to make parcels even more scarce so I expect competition for consented sites will remain strong. The knock-on effect of course is that this likely lack of supply should sure up land prices, and hopefully as we see inflation fall back and interest rates stabilise, mortgage lenders will offer more competitive rates which should once again see sales rates of new homes start to pick up. Getting on with the strategic promotion of land will be more important than ever given the proposed changes to the way local authorities will have to deal with their housing supply numbers, so those with land which may have potential are advised to seek advice or a no obligation appraisal.”
2023 Business Predictions: Christopher Taylor, design director at Marchini Curran Associates
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Christopher Taylor, design director at Marchini Curran Associates.
The industry is dramatically shifting to incorporate sustainability at the forefront of design, rather than paying lip service to it, and this is fantastic to see. We commend our home city of Nottingham for having an inspiring target of being carbon neutral by 2028, two years ahead of the national target of 2030.
For 2023, we predict that our industry will be heavily looking to incorporate high quality sustainable design in all projects, and as a RIBA Chartered Practice, we have a strong commitment to this.
Focusing on ethical and responsible sourcing of materials will also be more important than ever, as will recommending ways to build more efficiently, especially from a thermal perspective, in light of the current financial climate. Industry professionals will also be looking at creative ways of reinterpreting redundant building stock for contemporary purposes, and this is a key focus of our practice.
We plan to continue developing our sustainability credentials across multiple aspects of the business, and our sustainability lead will oversee appraisals, addressing how we can continue to meet and exceed national and global targets, by reducing operational energy and embodied carbon in our buildings.
The only way is up on the sustainability ladder, and it has to be this way – we are excited to see and contribute to the future of the industry by taking necessary environmental action.
Evolve Estates acquires main shopping centre in Northampton
Grosvenor Shopping Northampton is under new ownership after it was snapped up by Evolve Estates, the national commercial property and investment company.
The real estate company, which is part of the M Core group, has added the 319,048 sq ft prime retail, leisure and events destination to its rapidly growing retail portfolio, acquiring it from L&G for an undisclosed sum.
Joe O’Keefe, one of the founding partners of Evolve Estates, said: “We are pleased to have completed this acquisition in an incredibly challenging market, cementing our commitment to continued investment in the retail sector.
“This is one of the largest retail centres to come under our ownership and we’re excited to get to work. We’re already in discussion with numerous tenants who will complement the scheme and the wider Northampton town centre offer.
“It’s also rare to find a scheme like this, with so many positive projects going on in and around it. There are more than £25 million of government-backed development projects immediately surrounding the centre on three separate sites, with Market Square, Greyfriars and the Abington Quarter, plus the Clock House key worker residential scheme. These will provide significant opportunities for us and the town to grow and fulfil its potential.”
The two-storey shopping centre was comprehensively refurbished in 2015 and is anchored by Primark, Boots and Next. Other national retailers include: Office, Superdry, Lush, Pandora, Smiggle, Deichmann Shoes, and River Island. It has an 809-space multi-storey car park, which is owned and operated by West Northamptonshire Council.
Evolve Estates has a UK-wide portfolio over more than two million square metres, and a value of about £340 million.
Private equity firm invests in Indian casual dining restaurant group
TriSpan, a global private equity firm, has invested in Mowgli Street Food, an Indian casual dining restaurant group with sites in Nottingham and Leicester, through Rising Stars, its dedicated restaurant program.
The founder and management have maintained a significant interest in the company with Nisha Katona MBE, the founder, continuing to lead the group as CEO in its next phase of growth, supported by TriSpan and the board. Matthew Peck and Lucy Worth will continue in their roles as CFO and COO respectively.
Robin Rowland OBE, TriSpan European Operating Partner will chair the board. Dame Karen Jones, current chairperson, will remain on the board as a non-executive director.
The first Mowgli restaurant opened in 2014 and it has since expanded to 15 sites nationally.
The group has confirmed plans to open sites in Brighton, Bristol, Edinburgh in 2023, and is actively reviewing other expansion opportunities around the UK.
Nisha Katona MBE, founder of Mowgli, said: “Founding and growing Mowgli has been an unremitting joy for me. I soar with excitement when I think of the future possibilities for Mowgli and the way the public and our teams have embraced our food and our brand.
“TriSpan understands the elements that have made Mowgli, her food and her culture worthy of this affection and loyalty. They get it and always have, and I look forward to sharing the board table with colleagues that are committed to continuing to grow Mowgli with this delicious integrity at her heart.”
Robin Rowland, chairman, added: “I have admired Mowgli for a number of years and am looking forward to working alongside Nisha and her proven management team and strong board to continue the evolution of this unique and loved brand, delivering authentic, fresh and exciting Indian cuisine.”
Commenting on the opportunity to support Mowgli, TriSpan partners Fady Michel Abouchalache and Joseph Patrick Dib said: “We are proud to have been given the opportunity to partner with Nisha and her exceptional team during its next phase of growth.
“We are very excited at the prospect of bringing more Mowgli restaurants and their distinctive approach to Indian cuisine to more and more cities across the UK. This investment is once again testament to TriSpan’s commitment to the sector, especially in the face of the difficult macroeconomic environment present in the UK and globally.”
This is TriSpan’s tenth restaurant investment globally, and its fourth in the UK, following previous UK investments in Pho, Rosa’s Thai Café, and Thunderbird Fried Chicken. Debt financing for the transaction has been provided by OakNorth Bank. Terms of the transaction were not disclosed.
Warm reception for new manager at Nottingham Venues’ Orchard Hotel
Nottingham Venues, the brand behind meetings, events, hotel stays and a collection of venues across the University of Nottingham’s campuses, has appointed Peter Bartlett as hotel manager at their Orchard Hotel venue.
Bartlett joins a growing team at the hotel and the wider group (nearly 250 employees) from the DoubleTree by Hilton, where he recently oversaw a £6m refurbishment of one of their West Midlands venues during the pandemic.
With over 20 years in the hospitality industry and having worked in France, America (Long Island) and London, Bartlett brings a wealth of experience to the role as the business continues to build on a resurgence in business post-pandemic.
Peter says: “This is a very exciting time to be joining the group as they have transitioned from being part of a major organisation in terms of De Vere into a thriving independent brand incredibly well.
“This has been against a backdrop of huge uncertainty and challenges for the industry but Tom and his team have shown incredible vision to hit the ground running since last summer and are now reaping the rewards of a carefully managed process.
“As well as having a firm focus on putting our customers first, I am looking forward to continuing the development of the growing team here at The Orchard Hotel and helping to forge a fantastic culture in the hotel and as part of the wider business.”
General manager of Nottingham Venues, Tom Waldron-Lynch says: “Peter brings a wealth of experience to our growing team, both from his previous role and his wider global experience in the industry. His involvement in the major refurbishment programme at DoubleTree and the associated changes required within the team and the customer experience at his previous venue is also invaluable as we continue our own journey.”
