2023 Business Predictions: Paul Morris, development director at St James Securities
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 Paul Morris, development director at St James Securities.
Whilst there are a lot of reasons for doom and gloom at present, I prefer to start a new year on a positive note.
Although 2023 is set to be another challenging year for the economy with the cost of living crisis and record inflation, on the demand side a number of sectors are currently bucking the trend, both locally and nationally.
There continues to be a major housing shortage and this will result in significant growth in the Build to Rent (BTR) sector, which will go from strength to strength in 2023.
St James Securities are currently considering future phases of BTR at our award-winning Becketwell Derby scheme, which will go some way to meeting the demand for high quality rented accommodation in the city centre.
The student accommodation market also remains pretty strong and I believe the demand for purpose-built student accommodation will continue to increase over the next few years as more young people choose to go to University.
The office market is set to see a strong focus on energy efficiency as the drive towards achieving carbon zero continues. By 2030, all non-domestic rented buildings will need to meet EPC Band B, which is a substantial raising of the bar. Buildings moving towards carbon zero will lease well and I hope this will result in an overall improvement in the quality of rented accommodation.
The pandemic has strengthened the demand for flexible office space, and this is set to continue this year and beyond, with hybrid working now part of the fabric of the workplace.
As leases come up for renewal, more and more businesses are likely to reassess their accommodation strategies and consider a move towards flexible office space.
Employers need to make it attractive for employees to come back to the office and they will need to offer a great working environment in order to attract the best calibre of staff.
I believe the hotel sector will remain reasonably resilient. In Derby there is latent demand for an upper mid-scale four-star hotel. We have plans to meet this demand with the introduction of a hotel into a future phase of the Becketwell scheme.
Overall, the general outlook is definitely one of caution. We as developers have been through challenges like this before in the early 1990’s, 2002 and 2007-2010 and are in it for the long haul.
As we all know, business is full of challenges and we just need to work through any setbacks and find different ways to achieve our aims.
2023 Business Predictions: John Crockett, health and safety manager at Acorn Safety Services
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 John Crockett, health and safety manager at Acorn Safety Services, an independent health and safety consultancy based in Northampton.
With businesses across the UK facing the threat of recession and economic uncertainty fears are growing that some may choose to cut corners when it comes to keeping on top of their health and safety obligations.
In the past year, we have already seen a steep increase in the number of businesses being fined for not carrying out regular surveys and assessments, something I believe we could see continue well into 2023 and beyond.
But turning your back on health and safety is the worst thing you can do. In fact, being proactive and engaging with a health and safety expert at the very beginning of your project could be the best decision you ever make.
Take asbestos for example. If you think it’s a problem from the past, think again.
Despite being banned from all new buildings since 1999, a report published by the Asbestos Testing and Consultancy Association (ATaC) has highlighted the enormous scale of the asbestos problem currently facing the UK. Of more than 128,000 buildings surveyed between October 2021 and March 2022, a staggering 78% were found to contain asbestos. In total more than 700,000 individual items of asbestos were found and 71% of those were damaged, posing a significant threat to health.
On some construction sites, building work has begun without an asbestos survey even taking place, putting everyone on site at risk of developing deadly mesothelioma.
While next year will undoubtedly be challenging for many businesses, health and safety in all its forms should remain right at the top of everyone’s agenda.
Gloomy economic forecasts fail to dampen mood for East Midlands businesses
Despite gloomy economic forecasts, business leaders in the East Midlands are optimistic about their growth opportunities for the year ahead.
According to data from Grant Thornton UK LLP’s latest Business Outlook Tracker, mid-market optimism in the East Midlands has rebounded across all indicators monitored:
- Revenue growth expectations have risen +36 percentage points (pp) since October
- Profit growth expectations are rising – increasing +24pp since October
- Economic optimism has risen +22pp since October
Work starts on 146 modular homes at Glenvale Park, Wellingborough
Modular housing company ilke Homes has started work to deliver 146 energy-efficient, affordable homes at the Glenvale Park development in Wellingborough, as part of Man GPM’s community housing focus.
The announcement marks the second time ilke Homes and Man GPM have worked together to deliver an affordable-led scheme, having struck a £31 million deal in December 2020 for a 226-home affordable housing development in Grantham, Lincolnshire.
The 7.8-acre site forms part of phase one at Glenvale Park, which once complete, will deliver a total of 3,000 homes, over 200 acres of parkland, a new local centre and two new schools.
The wider masterplan for Glenvale Park is expected to generate more than 3,000 jobs and £1.4 billion in economic impact for the area – with £2 of social value generated for every £1 spent during construction.
Having received approval from North Northamptonshire Council, ilke Homes has started work delivering a mix of multi-tenure single family houses, apartments and maisonettes, ranging in sizes from one to four bedrooms homes.
The homes – which are due for completion in 2024 – are being manufactured offsite at ilke Homes’ 25,000 sq ft factory in North Yorkshire, where precision-engineering techniques enable the company to deliver highly sustainable modular homes.
ilke Homes can therefore commit to delivering energy-efficient housing, with a likely EPC rating of A, putting the properties in the top five percent nationally for energy efficiency, with the knock-on effect of saving consumers hundreds of pounds a year on energy bills.
Thanks to most of the build stage taking place offsite, traffic disruption to the local community will be kept to a minimum.
Tom Heathcote, executive director of development at ilke Homes, said: “This scheme is testament to the continued confidence our customers have in our product, and we’ve enjoyed working with local planning officials and other stakeholders throughout the planning process and into the construction phase. After the success of our first joint scheme in Lincolnshire, we’re delighted Man Group have shown the confidence in us to deliver a second sustainable urban development scheme together.
“Through our accredited modular methods of delivery, we can ensure the scheme aligns with Man Group’s own stringent ESG criteria, while also providing much-needed, energy-efficient and well-designed homes for the local community.”
Shamez Alibhai, Managing Director and head of Community Housing at Man GPM, said: “Our partnership with ilke Homes has demonstrated that it is possible to address the UK’s housing crisis with affordable, energy-efficient homes. The development at Wellingborough is an exciting demonstration of how like-minded partners can deliver homes that address the housing challenges of families. ilke’s track record on housing delivery and its commitment to innovation fits naturally with our focus on social and environmental responsible investment.”
Mark Best, director of Midtown Capital Ltd, managing partner of Glenvale Park LLP, said: “As a leading provider of sustainable modular properties, we’re delighted to welcome ilke Homes and Man Group to Glenvale Park. With the range of properties and mix of tenures available, the new homes will be an exciting new offering to our growing community.
“With hundreds of families calling Glenvale Park home, there is already a strong sense of community spirit within the development. We can’t wait to see that grow further, as we welcome new residents into their brand new ilke homes.”
Start-ups in Nottinghamshire hit record high
Figures just released show that more new businesses were established in Nottinghamshire during 2022 than in any previous year to date – making it one of the UK’s most successful counties.
A total of 9,235 new formations were registered in Nottinghamshire during the last 12 months, an increase of 4.8% on 2021 when 8,810 were recorded. This brings the number of registered companies in the county to an all-time high of 62,142.
The statistics are taken from the Inform Direct Review of Company Formations, using data from Companies House and the Office for National Statistics.
Nottingham formed the highest number of new businesses (3,612), followed by Mansfield (1,060) and Rushcliffe (828).
John Korchak, Managing Director at Inform Direct said: “It is great that Nottinghamshire can celebrate a record year for the number of new businesses established.
“The last few years have been turbulent for businesses, with inflation and a cautious economic outlook following the impact of the pandemic. However, in these figures we see evidence of the ambition, creativity and resilience of entrepreneurs in Nottinghamshire, as well as the benefits from the county’s support for a range of enterprises.
“This positivity is mirrored in the overall picture for the UK which saw a record number of new companies established during 2022, exceeding 800,000 for the very first time.”
The UK saw 805,141 new companies, compared to 771,617 in 2021, which represents an increase of 4.3% and brings the total number of companies to 5,236,227.
Dissolutions of UK companies totalled 578,679, down on 2021 when 606,912 were recorded, suggesting that new and existing businesses are adapting to survive in a post-pandemic business environment.”
UK manufacturing output flat, but cost and price inflation ease to slowest pace since 2021
Cost and pricing pressures in UK manufacturing remain high, but shows signs of easing, according to the CBI’s latest Industrial Trends survey. In the quarter to January, average unit costs grew at the slowest pace since April 2021, while domestic selling price inflation was the slowest since July 2021. But both remained far above their long-run averages.
Manufacturers reported stable output volumes in the quarter to January, following a modest decline in the quarter to December. New orders were flat, while the volume of total order books fell further below normal, suggesting that output has been supported in part by manufacturers tackling backlogs of work. Looking ahead, manufacturers expect new orders and output volumes to increase in the next quarter, but the share of firms reporting that orders or sales would constrain output nonetheless reached its highest since April 2021.
The survey, based on the responses of 321 manufacturing firms, found that:
- Business sentiment fell for the fifth consecutive quarter, but at a much slower rate than in the three months to October (balance of -5%, from -48%). Export optimism also fell, but less quickly than in October, when it dropped at the fastest pace in two years (-22%, from -31%).
- Output volumes were stable in the quarter to January, after falling in the three months to December (weighted balance of -1% from -9%). Rising output in the mechanical engineering and food, drink & tobacco sub-sectors was offset by falls in chemicals, metal manufacturing and motor vehicles & transport equipment. Firms expect volumes to increase briskly in the next three months (+19%).
- Demand-side factors were seen as more likely to limit output in the next three months (57% of respondents cited orders or sales as a likely constraint, from 43% in October; average of 71%). Supply-side constraints remain historically significant, but have eased: shortages of skilled labour (38%, from 49%; average of 16%); shortages of materials/components (44%, from 54%; average of 11%).
- Total new orders were broadly stable in the quarter to January (balance of -3%, from -8%). However, the volume of total order books fell further below normal (balance of -17%, from -6% in October). Manufacturers expect new orders to rise over the next three months (+9%).
- Average costs growth remained exceptionally strong in the quarter to January, but nonetheless eased, with costs rising at the slowest pace since April 2021 (balance of +64%, from +82% in October; average of +17%). Cost growth is expected to slow further in the quarter to April (+53%).
- Average domestic selling price inflation also eased but remained elevated in the quarter to January (balance of +37%, from +50% in October; vs average of +2%). Domestic price inflation is expected to remain elevated over the next three months (+41%).
- Numbers employed continued to rise in the three months to January, albeit at a slower pace (+14%, from +26% in October). Firms expect headcount to rise further in the next three months (+24%).
- Investment intentions for the year ahead were mixed. Manufacturers expect to raise investment in training and retraining (+20%, from +14%), plant and machinery (+8%, from +6%) and product and process innovation (+6%, from +7%). Investment in buildings is expected to decline in the year ahead (-9% from -5%).
Grimsby seafood business enters administration after abrupt plant closure
Cook & Lucas Frozen (UK) Limited has entered administration.
The company is an established importer, processor and supplier of seafood and whitefish, operating a smokehouse and processing plant in Grimsby.
On 10 January 2023, the company abruptly closed its plant in Grimsby, with approximately 80 members of staff being laid off. Following this unannounced closure, the company’s secured lender took steps to protect its position and sought the appointment of the joint administrators – James Clark and Howard Smith from Interpath Advisory.
James Clark, Managing Director at Interpath Advisory and joint administrator, said: “Given the circumstances surrounding our appointment, our immediate priority is to take steps to secure the company’s assets, while seeking to gather further information about the company’s financial position.”
Infotec Limited sold to Journeo Plc for £8.7m
Flint Bishop has advised the shareholder of IGL Ltd, the parent company of Leicestershire-based Infotec Limited, on the £8.7m sale to Journeo Plc, an AIM-listed information systems and transport technical services group also based in Leicestershire.
IGL Ltd, and its subsidiaries trading as Infotec, is one of the few British-based companies that designs, manufactures, tests and distributes its own passenger information displays to the rail sector in both the UK and abroad.
With more than 15,000 displays in operation and coverage of 80 per cent of the rail network, 2.19 million passenger journeys rely on Infotech’s products every day.
Leading on the deal for Tim Court was partner and head of corporate and finance Martyn Brierley, with support from senior associate Mark Wilcock. Partner David Newborough and associate director Jonathan Williamson, of Ashgates Corporate Services Ltd, provided accounting and tax advice to the selling shareholder on the disposal.
Brierley said: “We are delighted to have advised Tim on this successful transaction. The process was technically detailed at times so we are pleased to have helped bring the transaction to a positive conclusion for both Tim and Journeo plc. With Tim’s ongoing role in the business, we wish both Tim, Infotec and Journeo, the very best for their future together.”
Infotec founder Tim Court said: “Selling a business you’ve worked in and nurtured for near 30 years was always going to be emotional journey. Martyn, Mark and the team at Flint Bishop conducted the transaction with the utmost professionalism and skill. To me personally, they handled the deal with a deft touch which made the process bearable, their input is one I will always be grateful for. I couldn’t recommend and rate Martyn and his team at Flint Bishop more highly.”
Student consultancy project leads to innovation for East Midlands start-up
An East Midlands start-up is planning to modernise its products and revamp its website following a successful consultancy project with students from Nottingham Business School (NBS), part of Nottingham Trent University.
East Midlands Roller Doors was established in 2021 and supplies residential electric garage doors across the region. Following a successful first year of trading, the company is looking to expand into the commercial market with a view to recruiting more local talent to the organisation.
Six students from MSc Management and International Business and MSc Global Supply Chain Management courses carried out a competitor and SWOT analysis and explored the potential size of the market and the scope for the company to enter into it. They also considered steps that East Midlands Roller Doors could take to develop the commercial side of their business.
Their recommendations covered customer finance options, product diversification and the business rationale for developing a strong brand identity.
Greg Spencer, founder and manager of East Midlands Roller Doors, said: “As a new start-up we were looking for fresh ideas on how we could grow our business. We set the students the task of looking at how big the potential market is for roller doors in the East Midlands area. We also asked them to find out what could set us apart from other garage door companies working in the region.
“Throughout the project they were passionate, motivated and it was a pleasure working with them. After several weeks of research, the students presented their feedback to us.
“We will certainly be using some of the recommendations. We are looking at new, innovative features that will modernise our products. We’re also incorporating some of the student ideas into our new website build. We now have some exciting things we’re working on that will be released in the coming months.”
Prajwal Hulikere Mohan Kumar, MSc Management and International Business student, said: “This professional consulting project was a highly motivating experience for a Masters’ student like me to step into the professional world. This project gave us the real time experience to understand the requirement of a real business and analyse their challenges.
“We had an initial meeting with our client to understand their aim and what they wanted to achieve in the next few years. After analysing their requirements, we presented frameworks and recommendations for the best strategy to enter the commercial market.
“As a team we were happy that we could achieve our task with hard work and meet the client’s expectation. This consulting project helped me learn how to handle a client and understand their requirements in real time business.”
The project is one of 45 NBS student projects which took place over the autumn. The teams are supported by an academic supervisor who guides them through the process.
During 2021/22 NBS arranged 157 business projects for more than 700 post graduate students – 92% of organisations surveyed said they’d recommend these projects to others.
Greg Spencer added: “It has been a very good learning experience for us and given us ideas to take into the new year that will help us achieve our goals. I highly recommend companies working with NBS on these projects as the fresh ideas can be eye opening and it’s all useful information for potential growth.”
NBS is looking for businesses to host new projects from May 2023. Organisations interested in taking part can email nbsstudentprojects@ntu.ac.uk for further information.
Seven new tenants move into Nottingham office building
Following the £4 million redevelopment of East West on Maid Marian Way in Nottingham, seven new tenants have leased close to 50,000 sq ft of office space.
Equifax has taken 19,045 sq ft across the entire 5th floor, partnering with CEG which is delivering the bespoke fit out on their behalf. Classroom software company, Impero, has taken 3,345 sq ft and Turner and Townsend a 4,260 sq ft office.
As well as letting space to project management company, Faithful & Gould, CEG has also managed and delivered the bespoke fit out of new office space for Worldwide Clinical Trials group (10,500 sq ft).
A further two tenants are taking up CEG’s well-established, flexible offer Let Ready, which provides serviced workspace, which offers the ability to grow your business from 3 to 300 people without changing address. Pick Everard has taken a 1,991 sq ft office and KPMG has moved into the 3rd and 4th floor of the building.
A spokesperson from Worldwide said: “Providing contemporary and flexible workspace for our employees was essential as we return to the office and East West offers a great environment. It is one of the best office developments in Nottingham, with fantastic onsite facilities as well as being an easy walk to the city centre enabling sustainable commuting choices.”
CEG recently transformed the flagship East West development to deliver 175,000 sq ft of best-in-class workspace. The adjacent Toll House pub has been integrated into the development, providing a café bistro and business lounge offering a variety of spaces to eat, meet, drink and work with access to WiFi and plug in points.
This first phase of redevelopment has created a striking new reception area to the east building, as well as improvements to the glazing, lighting, heating and ventilation and new cycling facilities, showers, drying room and lockers.
Alex Goode, investment manager at CEG, said: “East West has been transformed to respond to businesses wanting healthy, sustainable and productive space that will help to attract and retain the best talent.
“We are delighted to welcome seven new tenants and, although the building is so popular, we do have some suites from 1,900 to 9,000 sq ft available over the coming months, ready for bespoke fit out, the costs for which can be managed as part of the flexible rent package to reduce an occupier’s capital outlay.”
FHP is marketing the building on behalf of CEG. Mark Tomlinson, director at FHP, said: “We continue to see strong demand for the very best quality office spaces with many occupiers now seeking to improve the quality of their office environments. Supply of good quality office space in Nottingham is low and East West stands alone in its ability to offer its Tenants a superb onsite business lounge café for informal meetings, hosting client events, staff breakout and workspaces. I’m delighted to say that we are due to bring forward more space within the building in 2023.”
