Falling consumer spending a key concern for Midlands businesses, as companies brace for challenging first quarter

Tess Egginton
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Falling consumer spending a key concern for Midlands businesses, as companies brace for challenging first quarter

A fall in consumer numbers and spending remains a top concern for Midlands businesses, as companies brace themselves for a challenging first quarter of 2024, according to accountancy and business advisory firm, BDO.

BDO LLP’s latest bi-monthly Economic Engine survey of 500 mid-market businesses, revealed that 44% of regional businesses rank dwindling customer numbers and a reduction in spending as one of the biggest challenges facing their business over the next six months, as inflation and the high cost of living continue to hit customer pockets.

The regional trend is also mirrored in the retail sector, with more than a third (37%) of retailers placing this as their number one concern.

It follows the latest BDO High Street Tracker that shows total like-for-like retail sales were negative in the last three months of 2023, the so-called ‘Golden Quarter’, pulled down by poor store and non-store fashion sales, as customers held back on their discretionary spend.

The survey of mid-sized businesses also showed that supply chain pressure, exacerbated by geopolitical events and staff and skills shortages, is still proving to be a thorn in the side of Midlands businesses, with more than half of regional companies (54%) admitting it will be their biggest challenge in the first half of 2024.

A quarter (25%) ranked difficulty accessing capital, such as bank loans and venture capital, as one of their top concerns.

Kyla Bellingall, regional managing partner of BDO in the Midlands, said: “There are a number of enduring themes that continue to blight Midlands businesses, centring predominantly reduced customer spending, supply chains, and the cost of doing business.

“While these will remain a cause for concern in the coming months, in the longer-term it is the crippling costs of borrowing that will significantly hamper growth. Unsurprisingly, high monthly loan repayments are proving to be a significant concern for Midlands businesses, with many calling on the Government for greater support.

“The Government should ensure it focuses on regulatory changes to tackle difficulty accessing capital, as well as providing greater financial incentives that are specifically targeted at mid-sized businesses, whose growth will play a key role in the overall economic recovery of the UK.”

Despite the ongoing pressures facing Midlands businesses, almost all (84%) of regional companies said they had achieved forecasted growth in 2023. When asked what steps they intended to take to help drive growth in 2024, more than a quarter (28%) of regional businesses said they plan to reduce the physical footprint of their business, with 26% intending to seek new funding to refinance or pay down debt. A quarter (25%) have set their sights on investing in retraining or reskilling employees.

Bellingall added: “While the outlook is beginning to improve, with inflation heading in the right direction, there is still a huge amount of uncertainty on the horizon. 2024 will throw up its own challenges, in the form of potential political change and more economic volatility.

“As such, businesses in the region must clearly define their priorities in the coming months, while continuing to address ongoing challenges.”

Financial services volumes dip in fourth quarter

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Financial services volumes dip in fourth quarter
The fourth quarter of 2023 saw financial services business volumes contract for the first time since June 2020, according to the latest CBI Financial Services Survey. Volumes are expected to be broadly flat over the next three months. The quarterly survey, conducted between 21 November and 15 December, also showed that optimism and profitability were both flat across the quarter, with profitability set to fall in the three months to March. Headcount growth accelerated over the quarter and is expected to remain quick in the months ahead. There was a mixed picture for investment intentions, with firms expecting to increase investment in IT and vehicles, plant & machinery, while cutting back on capital expenditure in land & buildings. Notably, this was the first survey since December 2014 in which FS firms expect to increase investment in vehicles, plant & machinery. Key findings:   
  • Business volumes fell at a quick pace in the quarter to December (weighted balance of -23% from +27% in the quarter to September). Firms expect volumes to be broadly flat next quarter (-3%).
  • Optimism was broadly unchanged in the quarter to December (-3%).
  • Average spreads declined slightly in the quarter to December (-4% from +5% in September). Firms anticipate that spreads will fall at a quicker pace next quarter (-23%).
  • The value of non-performing loans was broadly unchanged in the quarter to December (+3% from +8% in September) but is expected to grow marginally next quarter (+4%).
  • Profitability was broadly flat in the quarter to December (-3% from +13% in September) but is set to fall next quarter (-19%).
  • Headcount grew at a fast rate in the quarter to December (+46% from +34% in September). Firms expect headcount growth to ease next quarter, while remaining quick overall (+32%).
  • Firms expect to increase investment in IT and vehicles, plant & machinery in the next 12 months (compared to the last 12). Capital expenditure on land & buildings is set to be cut back.
    • Uncertainty about demand was the most commonly cited factor likely to limit investment in the next 12 months (53% from 47% in September).
    • The share of firms citing cost of finance as a potential limiting factor for future investment declined noticeably from last quarter (9% from 28% in September).
Louise Hellem, CBI Chief Economist, said: “With business volumes falling and both sentiment and profitability stagnating, 2023 ended on a flat note for financial services firms. However, it is encouraging to see that many businesses are still looking to grow their workforce and increase investment going forward. “With the Chancellor having answered the call to make full expensing a permanent feature of the UK’s tax regime, it’s pleasing to see greater confidence among prospective investors in these areas. At the Spring Budget, the Government should provide an update on the green finance strategy so that the financial services sector can continue to play its part on the road to net zero.”

Aggregate Industries swoops for Eco Readymix

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Aggregate Industries swoops for Eco Readymix

Leicestershire business Aggregate Industries, a member of the Holcim Group, has swooped for Eco Readymix Ltd, a producer of mortar and concrete in the north-west.

The acquisition will reinforce Aggregate Industries’ position in the north-west market and also help establish its place in the UK mortar market.

Eco Readymix was established in 2004 and has sites in Wrexham and Ellesmere Port with a third site due to open in the Midlands. It produces Ready to Use mortar and Dry Silo Mortar and serves national house builders, groundworkers and civil engineering firms alongside the domestic market.

It also produces ready mix concrete, liquid and traditional screed, concrete masonry blocks and aggregates. The company has strong sustainable credentials. Its Wrexham site is almost entirely powered via a biomass system alongside both wind and solar power. It employs 52 people across its sites.

Dragan Maksimovic, Chief Executive Officer of Aggregate Industries UK, said: “We are delighted to be able to announce the acquisition of Eco Readymix and welcome them to Aggregate Industries.

“As a business, it has clear sustainable values very much in line with our own, and will strategically add to our strong footprint in the north-west.

“This also marks our entry into the UK mortar market with a knowledgeable and ambitious management that has multiple synergies with our own. The acquisition supports our long-term strategy to continue to grow our business in order to become the UK’s leading supplier of sustainable construction materials and solutions.”

Gary Billington, Managing Director of Eco Readymix, said: “We’re really looking forward to taking the business forward with Aggregate Industries. This allows us to continue our ambitious growth plans and to develop our offering.

“It is really beneficial to be part of a leading UK company which has a clear vision for sustainability and to be able to have access to their networks and expertise.”

G F Tomlinson partners with Aortic Dissection Charitable Trust

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G F Tomlinson partners with Aortic Dissection Charitable Trust

Midlands contractor, G F Tomlinson, has named the Aortic Dissection Charitable Trust as its chosen charity for 2024.

Aortic Dissection is a serious heart condition caused by a partial tear in the wall of the aorta, which prevents blood supply and can lead to the rupturing of organs. Seventy people are diagnosed with the condition each week in the UK and Ireland with only an average survival rate of 50%.

The Aortic Dissection Charitable Trust aims to help raise awareness and funding for research into early detection, supporting prevention, treatment, and cures for the condition, which if diagnosed and treated in time, has an 80% survival rate.

Having received a letter from Pauline Latham, OBE MP who has been writing to local businesses in Derbyshire asking them to support the charity following the sad loss of her son, Ben, in 2018 from the condition, Group Chairman, Andy Sewards was keen to pledge G F Tomlinson’s support as their chosen charity for 2024.

As part of its commitment to the charity, the contractor will be hosting a variety of fundraising events from January through to December to help towards prevention and treatment of the condition, in the hope that it will save many more lives.

Andy Sewards said: “We are honoured to be supporting such a worthy charity for 2024. Aortic Dissection is a serious condition and it’s vital that we work together to raise awareness for its diagnosis and treatment, to prevent unnecessary fatalities.

“In line with our social value ethics and support for local charities, we will be planning multiple fundraising events throughout 2024 to ensure that we help the trust continue with its incredible work for next year and beyond.”

Pauline Latham said: “I am so grateful to G F Tomlinson for their wholehearted support for Aortic Dissection.  Many people don’t know anything about it until their family is devastated by it. The more we can do to prevent unnecessary deaths the better.

“We need better outcomes for patients and G F Tomlinson’s support will really help the charity’s ability to fund research into this little-known condition. I want to thank them for all they will be doing over this year.”

Edwin James Group snaps up Automated Control Solutions

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Edwin James Group snaps up Automated Control Solutions
Edwin James Group has acquired Automated Control Solutions Holdings Limited and its subsidiaries Automated Control Solutions Limited and ACS Electrical Engineering Limited, together trading as ACS. The deal will expand the Group’s digitalisation offering, growing its systems integration and OT automation capacity. All staff will be retained, including the leadership team, who will work closely with group CEO Christopher Kehoe and EJ Peak Technology Solutions executive director Michael Thomas to integrate the business. The strategic acquisition strengthens Edwin James’ process engineering capabilities and provides additional capacity to support customers’ sustainability, digital and energy transitions. As part of the company’s buy-and-build strategy, it positions the Group for further growth. Established in 1998, Burton-based ACS is a control systems integration services provider that delivers services across two divisions: Systems Integration and Electrical Engineering. The business specialises in software and electrical-based control solutions for the manufacturing sector and focuses on working with large corporate customers in the food and beverage, brewing and liquid processing industries. Christopher Kehoe, CEO at Edwin James Group, said: “ACS is a business we have known and admired for some time, and we believe their blend of skills, knowledge and specialist experience is a perfect complementary fit for our business. “With shared customers and a highly skilled team, ACS will enhance our existing industrial digital skillset. Following our successful funding round with Aliter Capital in February last year, we have been executing our buy-and-build growth strategy. ACS is a testament to our commitment to strategic expansion.” Mr Kehoe continued: “ACS is a well-run business and I’m looking forward to working with Paul and the team to integrate ACS into the Group.” Paul Cantrill, Managing Director at ACS, said: “It’s really exciting to be joining the Edwin James Group. Our two businesses share a number of customers and the same values including a commitment to high-quality service. “Edwin James is going from strength to strength and being part of a national organisation will provide structure and greater scope for growth for ACS and its employees.”

New light industrial scheme to be built in Nottinghamshire

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New light industrial scheme to be built in Nottinghamshire
Nottingham developer Decorum Estates has been given the go-ahead to begin work on a new light industrial park in the Nottinghamshire town of Cotgrave.11 units will be built at Decorum Park in the town on a site bought by Decorum last year from Wilson Bowden/Homes England, who were represented on the deal by Mark Tomlinson at FHP. NG acted for Decorum Estates on the deal.Thomas Szymkiw, head of agency at NG and his colleague Charlotte Steggles, associate director, are marketing the project.Thomas said: “It’s great news that Decorum Park has been granted planning permission. From day one we’ve received particularly strong interest in this site. Decorum is a high quality developer and this new scheme will bring forward some of the finest light industrial units in the East Midlands.“Cotgrave is an up-and-coming town and its excellent transport links and local amenities mean that these units are perfect for ambitious companies looking to make a real statement with their next property move.”Charlotte added: “It’s so rare that units like this are built to be sold as opposed to let. They are perfect for small businesses or SIPP investors, and the quality of this project will be ahead of anything else in the Rushcliffe area.”Chris Carlisle, director at Decorum Estates, added: “We are delighted to have secured planning and bring the scheme forward. Decorum Park offers a unique opportunity to purchase quality business units in this part of Nottinghamshire.”

High volume dispensing pharmacy sold to Lincolnshire operator

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High volume dispensing pharmacy sold to Lincolnshire operator
Specialist business property adviser, Christie & Co, has sold D L Ogle Pharmacy in Worcester to a Lincolnshire operator. D L Ogle is a standard hours community pharmacy that dispenses an average of 12,000 items per month and is located in the Worcester city suburb of St Johns. The business has been owned by David Ogle and his family for more than 30 years and was brought to market in 2023 to enable family members to either retire or pursue different business interests. Following a confidential sales process with Carl Steer at Christie & Co, it has been purchased by brothers Ali and Mohammed Talib, Tapiwa Masamha and Chikondi Mlia, who also own Gohil’s Pharmacy and Whistlers Pharmacy in Lincolnshire, the latter also being sold by Christie & Co. Carl Steer, director – Pharmacy at Christie & Co, says: “The sale was confidentially marketed but, within just a few days, interest was achieved from multiple parties, and we were able to present our client with an acceptable offer – this was a truly remarkable achievement but one that the long-standing business deserved. “The buyers own two sizeable pharmacies in the East Midlands and now add this well-performing profitable pharmacy to their portfolio. It was a pleasure to deal with everyone on the deal.” D L Ogle Pharmacy was sold freehold for an undisclosed price.

2024 Business Predictions: Luke Draper, MD of IDT Limited

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2024 Business Predictions: Luke Draper, MD of IDT Limited
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 Luke Draper, MD of IDT Limited. I’m no expert when it comes to predicting business trends. But when it comes to predicting what will challenge businesses in 2024 – well then that’s an easy one. But not a pleasant one. Cybercrime.In fact, I can’t emphasise it loud enough. Not so much a prediction, but a sure bet. I don’t normally like scare mongering but in this case I feel I need to and should as it’s that important and serious.Every person and person in business, needs to prepare themselves better against cybercrime. It’s here, it’s real, and it’s going to affect us all sooner rather than later.In the last few weeks alone we’ve seen the media report on prominent and respected businesses floored by cyberattacks. Compromised. Helpless. Out of business.Business insurance companies are now putting mandatory requirements in place stipulating that cyber security is in place before they offer cover.And It’s getting more aggressive, with stories of cyberattacks now commonplace. But it always happens to someone else right? Well, that’s what some will cross their fingers and hope for.  The reality is cybercrime not only devastates a business it can ruin lives and have a massive effect on people’s mental health.So – what to do? On a positive note, there are things that can be done – powerful tools and skills that will not only help protect against the devastating impact cybercrime can have on a business, but in turn, will arm your employees with know-how and awareness to take home and help protect their families too.

Planning permission granted for second phase at Leicestershire business park

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Planning permission granted for second phase at Leicestershire business park

Planning permission for a second phase at Beauchamp Business Park, a new commercial development in Kibworth, Leicestershire, has been granted by Harborough District Council.

Beauchamp Business Park is being brought forward by Clowes Developments and its team including IMA Architects, TanRo, Millward Consulting Engineers, Gateley’s Legal and Postins Project Services. Philips Sutton and TDBRE have been instructed as agents on the scheme.

Construction of the first phase of the scheme began in September 2023 and 80% of the units were sold or under offer within two months of being made available for enquiries.

Phase Two will see the creation of a further three new commercial/industrial buildings to be used for B1 and B2 use class. Construction is scheduled to begin in Summer 2024 with completion expected in early 2025. When complete, Beauchamp Business Park will feature a series of freehold and leasehold industrial units ranging from 1,270 sq ft to 10,085 sq ft.

Clowes Developments have retained IMA Architects who are providing all architectural services and acting as Principal Designer on the scheme.

Paul Turner, construction director at Clowes Developments, says: “We are committed to enhancing the local economy and promoting future growth by developing sites that meet the needs of growing businesses.

“The level of demand we have seen for phase one has been exceptional, which shows the strength of the real estate market in Leicestershire currently, and we are confident that this will continue with Phase Two.”

Ben Hall, director at IMA Architects, adds: “The creation of Phase Two will deliver additional units that will meet the demand for industrial space within the local area. We are pleased that planning has been approved and we are looking forward to bringing this next phase of the project to life. We are sure Beauchamp Business Park will be an asset to the local economy for years to come.”

Accountancy firm kicks off 2024 with key acquisitions

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Accountancy firm kicks off 2024 with key acquisitions
Accountancy firm Dains has completed two further strategic acquisitions. Dublin-based McInerney Saunders Chartered Accountants and Midlands-based Magma Chartered Accountants have joined the Dains Group of businesses. McInerney Saunders have been providing commercial and advisory support to businesses both in Ireland and internationally for over four decades. Dains and McInerney Saunders have collaborated to serve international clients for many years and by joining forces, the enlarged group will deliver additional services to a growing client base. Owen Sheehy, Managing Partner at McInerney Saunders, believes the move is perfect for clients and his team. Owen said: “The uniformity of the firms’ culture combined with the expertise of our teams will create a powerhouse of financial knowledge and capabilities. “Joining the Dains Group allows us to leverage their extensive resources, cutting-edge technology, and deep industry insights to enhance the value we bring to our clients. This synergy will undoubtedly result in a stronger, more versatile firm that can navigate the complexities of the ever-evolving financial landscape.” Magma Managing Director Mark Tuckwell has championed the decision to join the Dains Group of businesses, where the new office locations provide a growing footprint to the group. The Magma offices in Leicester and Rugby knit seamlessly to the recent acquisition of Nottingham-based HSKSG, pushing the influence of the group further into the East Midlands. Mark Tuckwell, Managing Director at Magma, says the move is exemplar for clients and his team. Mark said: “We are excited to join forces with the Dains Group and bring our collective expertise to a broader audience. “Our shared values and commitment to client satisfaction make this integration a natural fit. We look forward to the opportunities and growth that lie ahead as we embark on this new chapter together.” Richard McNeilly, CEO of Dains, said: “We enter 2024 with terrific news. During 2023 we experienced strong organic growth, and successfully integrated colleagues from HSKSG and Opto Group in to the Dains Group. “Today marks a significant milestone in our growth story and underscores our commitment to expanding our presence and capabilities in key markets. Our Midlands presence is substantial, and we are delighted to welcome the Magma team to Dains Group. “Ireland is a dynamic and growing market, and today’s announcement positions us to better serve our clients with enhanced expertise and local insights. “Simultaneously, the acquisitions of McInerney Saunders and Magma are not only strong additions to the group, but a coming together of like-minded professionals who share common values. This alignment of culture and values will ensure a smooth integration process, creating a unified and cohesive team dedicated to achieving shared goals.” Luke Kingston, Managing Partner at Horizon Capital, said: “Since our first investment, the Dains Group has moved steadily through the Accountancy Age rankings, and it is clear that the group is now placed amongst the top 30 firms with Group revenues in excess of £55m. “The acquisitions of McInerney Saunders and Magma significantly propels the Group on their growth trajectory as well as being the catalyst for a mutually co-operative relationship, completely aligned with our long-term growth strategy.” Dains were advised by Forward Corporate Finance (financial modelling), DSW (tax and financial due diligence), Fairgrove Partners (commercial due diligence), Deloitte (tax structuring) and CMS (legal). Magma were advised by Knights (legal) and McInerney Saunders were advised by Mullany Walsh Maxwells (legal).
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