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East Midlands businesses begin 2024 with growth in confidence
Business confidence in the East Midlands rose four points during January to 38%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
While firms in the region reported lower confidence in their own trading prospects month-on-month, down 12 points to 39% in January, their optimism in the wider economy climbed 20 points to 37%. Taken together, this gives a headline confidence reading of 38%.
East Midlands businesses identified their top target areas for growth in the next six months as evolving their products and services (42%), investing in their team (39%), and introducing new technology (27%).
A net balance of 26% of businesses in the region also expect to increase staff levels over the next year, down 14 points on last month.
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall, UK business confidence rose nine points in January to 44% – its highest level since February 2022 and its strongest start to a year since 2016. Firms’ outlook on the overall UK economy rose ten points from 27% to 37%, while businesses’ optimism in their own trading prospects also climbed three points month-on-month to 51%.
Companies’ hiring intentions increased marginally, with 33% of firms intending to increase staff levels over the next 12 months, up four points on the month before.
London and the North East were the joint most confident parts of the UK in January – each posting a headline confidence of 62% – followed by the West Midlands (56%) and Yorkshire & the Humber (44%).
The East of England (38% in January vs. 45% December) and Northern Ireland (29% vs. 36%) were the only two regions to reporting declining levels of confidence. The majority of the data was collected before the December ONS inflation data was announced on January 17th.
Sector insights
Three of the four sectors tracked in the Barometer reported rises in confidence. The most significant increase was in services which accelerated 15 points to 45%, up from December’s 16 point drop. Manufacturing confidence also increased to 49%, while construction rose eight points to a 10-month high of 45%.
There was a more mixed picture in retail however, dipping three points to 41% with anecdotal evidence of weaker footfall and sales in December as shoppers hit the streets earlier than usual in November. Nevertheless, some companies still reported stronger sales over the festive period.
Dave Atkinson, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s encouraging to see East Midlands business start the year on a confident footing after a challenging 12 months for businesses in the region and across the UK.
“While hiring intentions have dipped, more than third of businesses are planning to invest in their teams over the next six months. By putting short-term plans in place like this, they are setting themselves up for long-term success as economic conditions improve.
“We know we’re not out of the woods in terms of wider geopolitical challenges, but by playing close attending to areas like working capital, firms can bolster their resilience against future headwinds. We’ll continue to be by the side of firms as we help them move forward in the strongest position possible.”
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “Businesses are feeling more confident following the cautious end to 2023, with this being the strongest start to a year since January 2016. The reduction in inflation, albeit with the recent uptick, and the belief that interest rates may have peaked is likely driving the rise in confidence among firms.
“With ongoing geopolitical issues and a general election on the horizon, businesses will have factored these into their risk radars and will be working to prepare for any potential impacts on their trading prospects.
“Also, half of all companies say they’re planning to increase headcount in the coming year. Despite that and the changes to minimum wage that will come into force in April, expectations for staff pay fell back following last month’s increase.”
Chesterfield firms to find out more about East Midlands devolution plans
Organisations in Chesterfield are invited to hear from the first mayoral candidates in the running for the new East Midlands Combined County Authority (EMCCA).
The EMCCA will bring forward £1.14 billion of investment for Derbyshire, Nottinghamshire, Derby City and Nottingham City over the next 30 years, unlocking economic growth and jobs, as well as significant funding and devolved powers for transport, skills and adult education, housing, the environment, and economic development.
Ahead of the mayoral election, which is set to take place on Thursday, 2 May 2024, businesses will have the chance to pose questions to Conservative candidate Ben Bradley, Labour’s Claire Ward, and Independent Matthew Relf at the Celebrate Chesterfield Business Conference taking place this March.
In a conversation chaired by Chris Hobson, Director of Policy and Insight at East Midlands Chamber (Derbyshire, Nottinghamshire, and Leicestershire), candidates will outline their plans to boost our region’s economic growth, establish new relationships and broaden the pipeline for inward investment. Audience members will also get the chance to pose questions to candidates during the discussion.
Now in its thirteenth year, Celebrate Chesterfield, which is organised by Destination Chesterfield and in association with System Q, has become a key date in the town’s events calendar, attracting more than 250 delegates each year.
In 2024, the event will highlight the big impact that small innovations have on the town’s economic growth, focusing on investment, regeneration, and entrepreneurial successes.
Delegates will also hear about the new Destination Chesterfield plan, which outlines partnership activities to further raise the profile of the town as a destination to invest, work, live and visit.
Peter Swallow, Destination Chesterfield Chair, said: “We are very excited to be hosting mayoral candidates at the Celebrate Chesterfield Business Conference, and finding out more about their ambitions for the region. Our town has major plans for regeneration over the coming years, and our businesses are hopeful that the extra funding will provide a welcome boost by attracting further investment to Chesterfield.
“At our Chesterfield Champions event in January, we heard about some of the regeneration projects that could be supported by the EMCCA. We heard how the East Midlands Investment Zone will focus on advanced manufacturing and green industries, expected to support the creation of £383 million of private investment and help to create 4,200 jobs regionally. We also heard how funding is set to increase each year until 2026/2027.
“I would also encourage the business community to come along to find out how Destination Chesterfield plans to further collaborate with partners and businesses in the future, to continue supporting economic growth and regeneration across the borough.”
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Microlise hails “good trading” in 2023 as revenue rises
Microlise Group, a Nottingham-based provider of transport management software to fleet operators, experienced “good trading” in 2023 with results expected to be ahead of market expectations.
According to an unaudited trading update for the year ending 31 December 2023, revenue is anticipated to increase by 13% to £71.7m, up from £63.2m in 2022, with adjusted EBITDA growth of 14%, slightly ahead of market expectations.
The Group added 450 new customers during the year with key customer wins including McCulla, BCA/ECM, LF&E and two significant customer wins in Australia. Microlise also extended its relationships with numerous existing customers including Tesco, Culina and Bidfood. Microlise announced two acquisitions in 2023 for a total maximum consideration of £10.6m. This included the acquisition of Vita Software, which completed in March 2023, and Enterprise Software Systems (ESS), which completed in January 2024. A third acquisition of K-Safe completed in December 2023, with the announcement in January 2024. Microlise expects to deliver strong revenue growth in FY24, driven by further organic growth and recent M&A.Nadeem Raza, CEO, Microlise, said: “Trading momentum improved in the second half supported by an increase in delivery to direct customers towards the end of the period and strong uptake from OEM customers. This continues to drive double digit growth in ARR, an increasing base of recurring revenues and good cashflows.
“The three acquisitions made during the period have resulted in an improved and expanded offering which is already having a positive effect on trading momentum and pipeline. This, together with the resolution of the microchip supply crisis, gives us confidence in the Group’s continued success.”