- Six out of ten respondents expected turnover to increase
- Nearly half of respondents expected profitability to increase
- One third of respondents expected to raise prices (down from Q4 2023 when the figure was two out of five)
- Three out of ten respondents reported an increase in overseas sales over the last three months (up from two out ten in Q3, 2023)
- Just under a quarter of respondents expected overseas orders to increase over the next three months
Positive outlook for East Midlands businesses as new research shows boost in sales and orders
Increased sales and orders, a growing confidence in future profitability, and reduced pressure to increase prices are among a series of findings from a new East Midlands survey of over 300 businesses.
Six in 10 respondents to East Midlands Chamber’s Quarterly Economic Survey (Q2, 2024) said they anticipated their turnover to improve this year, with half expecting gains in profitability to follow. An increasing number of businesses were planning to boost their investment in new equipment and training and there was a drop in those reporting difficulties with cashflow.
East Midlands Chamber Head of Special Projects Richard Blackmore said: “It’s fantastic to see so many measures in our Quarterly Economic Survey pointing to growth for East Midlands businesses, with the data suggesting this will continue over the remainder of the year. What everyone in business wants to see is their turnover and profit going up and price pressures falling and that’s exactly the picture being painted by this data.
“For fewer respondents than in the last quarter to say they feel a compulsion to raise prices and for that data to coincide with a drop in inflation this week to 2% is a good combination.
“Orders are up, both in the UK and overseas, and businesses are increasingly talking up their intentions to invest, especially in plant and machinery. These are all signs that businesses are moving away from the drawn-out days of just ‘getting by’ in the face of tough times and are now looking to push ahead.
“It’s worthy of note that just as many East Midlands businesses are saying ‘competition’ is up there with inflation in their list of growing concerns. A healthy economy requires healthy competition between businesses, so this finding again suggests brighter times lie ahead for the rest of 2024.”
Highlights from East Midlands Chamber’s Quarterly Economic Survey Q2, 2024:
Record revenues for Lutterworth cybersecurity software company
Revenue and profit have soared at Intercede, the Lutterworth cybersecurity software company specialising in digital identities.
According to preliminary results for the year ended 31 March 2024, the business delivered record group revenues of £20 million, 65% higher than its prior year (£12.1m).
Meanwhile, pre-tax profit ascended to £5.6m from £0.6m. Intercede noted that FY24 was “an exceptional year” and that it continues to invest in its colleagues, IT Infrastructure, product development, sales and marketing to maintain and sustain current momentum.It added: “We embark into FY25 with good visibility on the pipeline, known and fully resourced internal critical investments, and with a clear roadmap on our acquisition strategy…. The focus is on growth and execution of strategic plans to deliver it.”
Royston Hoggarth, chairman, said: “In this challenging global environment, the Group has delivered record revenues in what has been an exceptional year. We look forward to building on this momentum.”
As monthly company insolvencies fall, the tide could finally be turning for East Midlands businesses
A surprise monthly fall in the number of company insolvencies in England and Wales could indicate that the tide is turning for the local economy, with an increase in business growth and prospects over coming months.
This is according to the Midlands branch of insolvency and restructuring body R3 and follows monthly statistics published this week by the Insolvency Service which show that corporate insolvencies decreased by 6.4% in May 2024 to a total of 2,006 compared to the previous month’s total of 2,144, and by 21.2% against May 2023’s figure of 2,547.
R3 Midlands Chair Stephen Rome, a partner at Penningtons Manches Cooper in the region, said: “Despite the challenges facing local companies, including the uncertain political and economic climate, business owners appear generally more optimistic about the coming months, and many expect output and sales levels to rise and are planning to recruit extra staff.
“With the national economy growing in the first quarter of this year and predicted to grow again in the next quarter, the tide may be about to turn for the better in the East Midlands.
“Businesses do need to remain cautious, however, as inflation levels, depressed consumer spending, and the costs of energy and fuel have been looming over the local economy for months.
“Shorter-term issues, like the rain we experienced in April and May, will also have hit local firms in the construction, retail and hospitality sectors, with delays to building projects and a reduced footfall into shops and hospitality businesses.
“We therefore urge anyone who is worried about their finances to seek advice as soon as possible. We know how challenging it is to talk about money worries but starting that conversation when the problem is new will give more options for resolving it and more time to consider the next step.
“Most R3 members will offer potential clients a free initial consultation so they can learn more about their situation and how it may be resolved.”
Games Workshop sees revenue and profit grow
Revenue and profit are on the rise at Games Workshop, according to a year end trading update.
For the 53 weeks ended 2 June 2024, the Nottingham business estimates its core revenue to be not less than £490 million (2022/23: £445 million) and licensing income of £30 million (2022/23: £25 million). The group’s profit before tax is estimated to be not less than £200 million (2022/23: £171 million).
In recognition of the contribution of Games Workshop’s staff, the company has paid group profit share cash payments amounting to £18 million (2022/23: £11 million). These are paid in cash on an equal basis to each member of staff. Dividends declared and paid in the year were £138 million, 420 pence per share (2022/23: declared and paid £136 million, 415 pence per share).
Science company leaders get stuck in helping YMCA Derbyshire residents enjoy the outdoor life
Residents of the YMCA Derbyshire charity have been supported by senior business leaders from all around the world who stepped in with paintbrushes and hammers for a morning’s work.
Procurement directors from science company Lubrizol who are based in the USA, China, South Africa, France and the UK were at the YMCA’s base in Derby where they got stuck in to help with planting, painting and making bird boxes – as well as constructing a geodesic dome.
The dome is a model of a larger construction that the YMCA hopes to be able to install in a three-acre garden that it leases to benefit residents who use it to grow vegetables and enjoy peace and quiet in the open air.
Lubrizol contributed 17 senior leaders based all around the world who volunteered at the YMCA as part of their “Creating Community Chemistry” drive to give back to local communities.
The Lubrizol leaders were in the UK at a meeting at the company’s UK Technical Centre in Hazelwood, near Duffield. They stepped away from the board room for a morning to help out at the YMCA where they were put to use with paintbrushes and hammers.
The chemistry company has plants all over the world and employs nearly 9,000 people.
JT Jones, Lubrizol’s senior vice president of procurement and high growth regions – who is based in the USA – was one of those working hard at Derby’s YMCA to help create freshly painted and planted pots for the charity’s garden, as well as bird boxes and the geodesic dome.
He said volunteering in the local community was important to everyone at Lubrizol and employees had been involved in many initiatives around the world from helping out at a US foodbank to picking vegetables in China.
He said: “All of us are really lucky and it’s always important to give back to the community – lots of people are not as lucky as we are.”
The team from Lubrizol also included Nadina Singh, the company’s global procurement logistics director who is based in South Africa, who said she was enjoying spending her morning painting. She was working alongside China-based Stephanie Shen, Lubrizol’s procurement director for Asia Pacific, and senior director Deanna Murlin.
Deanna said: “Perhaps a reason why a lot of us enjoy working at Lubrizol is that it’s important that we are employed somewhere where we can give back to the community and that we are given that opportunity to do that. It’s very nice to do this.”
Planters painted by Lubrizol volunteers were made by YMCA residents for use in the charity’s garden, through its Men in Sheds project. Wood for the geodesic dome was donated by Derby Timber Supplies.
Scott Gillespie, from the YMCA, said: “At the YMCA we are trying to encourage as many local communities as possible to help support the work we are doing to support our residents. Our Men in Sheds project gives our residents confidence, and future skills.
“The support from Lubrizol is incredible. It’s amazing just how well the Lubrizol team works together and seem buzzing from it. It’s team-building for them and invaluable for us. It’s absolutely phenomenal.”
YMCA Derbyshire provides accommodation to people at risk of homelessness. Through its merger with the Padley Group, it provides a community hub for those experiencing poverty and social isolation, where people can access a range of support including basic provisions such as clothing and food, as well as advice on debt, budgeting, mental health, addiction, registering with a GP and legal advice.
The charity is currently providing accommodation for more than 200 people in Derby who might otherwise not have a home.
Burton retail space to sizzle with new letting
Following the recent letting of Unit 2, 158 High Street, Burton upon Trent, commercial property agent, Rushton Hickman, have let Unit 1, the remaining ground floor suite.
In 2020, T&T Assets Limited acquired the building from Rushton Hickman and subsequently transformed the first and second floors into residential accommodation, while also renovating the ground floor into two premium retail / office units.
The 351 sq ft retail space is in a prime location in Burton town centre, directly facing Station Street, a popular pedestrianised shopping area with heavy foot traffic.
Sam’s BBQ & Bakes are the new tenant in Unit 1, 158 High Street. Run by a brother and sister duo, this new town centre spot offers a variety of traditional American slow smoked meats, such as pulled pork and beef brisket, all seasoned with their own special rubs.
Taylor Millington, Surveyor at Rushton Hickman, who negotiated the deal, said: “I am confident that Sam’s BBQ & Bakes will be a great addition to the busy high street and we are excited to see them succeed due to their unique food offerings. We take pride in our efficient two-month turnaround time and this deal further emphasises the continuing demand for high-quality retail space.”
Further letting secured on Interchange 25 Business Park
FHP have completed the letting of the first floor at Unit 5, Interchange 25 Business Park to Equans, a provider of technical services, FM, regeneration and energy services.
Interchange 25 Business Park comprises a development of eight self-contained detached office buildings providing high quality office specification throughout, with a variety of occupiers including Air IT, Nurture Fertility, GPA Global, and Keepmoat Homes.
Equans have taken 2,071ft² of open plan office accommodation with ample car parking spaces.
Amy Howard, Surveyor at FHP Property Consultants, said: “After a slow start with initial interest, it was a great result to secure Equans on the first floor offices. It was evident that
the demand for the whole space of circa 4,000ft² was limited following on from a few viewings that resulted in no offers on the property.
“We therefore looked at different options to secure full occupancy. The out-of-town office market continued to show a strong level of demand between the 2,000ft² and 2,500ft² size bracket, which resulted in us changing our marketing approach and offering both the whole space and on a floor-by-floor basis.
“Once we added the additional availability options, it resulted in several further viewings and we secured Equans Ltd. Equans were a delight to work alongside from the start and they will be an excellent addition to the park.
“Securing a tenant for the ground floor space is a priority for us in order to achieve full occupancy for our client, interest remains strong so we are hopeful to achieve this over the course of the next few weeks.”
Purpose Media supports new regional authority with key web project
Strategic marketing agency Purpose Media is helping the East Midlands’ newly elected mayor and the team she leads communicate with the two million people living in their region.
The South Normanton-based business was chosen by East Midlands Combined County Authority to design and build a website which will demonstrate how it is delivering the region’s strategic priorities after a historic devolution deal signed with central government.
The body came into being in the spring of this year, taking over responsibility from Westminster in areas such as transport, skills, regeneration and economic development across Derby, Derbyshire, Nottingham and Nottinghamshire.
It controls a £1.14 billion investment fund and is responsible for £1.5 billion of transport spending, under the leadership of Claire Ward, who was elected as East Midlands Mayor in May.
Devolution is viewed as a way of uniting the region, giving it a stronger voice nationally and internationally and bringing more local control of decision-making on key issues.
Instrumental to the new authority’s operations is a need to communicate with those it has been set up to represent, and with only a matter of weeks from the devolution deal being ratified to the mayor and her team beginning work, it turned to Purpose Media to design and build a website to explain its role, detail its priorities and encourage interaction.
Tim Lenton, Purpose Media’s digital innovation and strategy director, said the agency was delighted to be entrusted with delivering such an important project within the region where it is based.
“We are proud to be part of the East Midlands business community and to represent many clients who are also based locally, so it is a thrill to be selected to support the new combined county authority in its work attracting investment, encouraging prosperity and creating opportunity within the area,” he said.
“We were able to draw on our 15-year experience of building websites for hundreds of clients and working with government bodies such as the Department for Culture, Media and Sport and the Forestry Commission.”
The new site was constructed on a WordPress content management system, allowing the authority’s staff to easily add content, but with a bespoke ‘front end’ delivering enhanced user experience.
It is customisable, allowing for minutes of meetings and key documents to be displayed and indexed, and is optimised for performance and search.
“Timeframes were tight, but we used our technical expertise to deliver a flexible platform which blends the best tools available with our own creativity and which can be developed in line with the authority’s future needs,” added Tim.
“Once again it shows that clients can present us with pretty much any challenge and we are able to rise to meet it.”
Richard Dawson, the authority’s Interim Strategic Communications Manager, said: “We are really pleased with the look and feel of the new website, which was delivered on time and to our exact specifications. It has been a pleasure dealing with the Purpose Media team.”
Derby City Council leader replaced after no confidence vote
Derby City Council’s leader has been replaced after losing a confidence vote.
The vote of no confidence from opposition leaders related to the conduct and actions of Cllr Baggy Shanker regarding the failed Sinfin Waste Treatment Plant and an associated £93.9m invoice from Derbyshire County Council, which he has disputed.
Shanker was quoted by the BBC saying the motion was “a desperate act of political opportunism.”
The ex-leader is the Labour party’s candidate for the Derby South constituency in the general election.
Shanker’s deputy leader, Labour’s Nadine Peatfield, has taken his place after the vote to back the motion was tied, with mayor, Conservative, Ged Potter using his casting vote to force a new leader.
Organisations representing thousands of businesses, including the Business Improvement Districts (BIDs) for the Cathedral Quarter and St Peters Quarter, plus Marketing Derby, as well as investors, such as St James Securities and Wavensmere Homes, submitted letters expressing deep concern about the introduction of political instability at a crucial time for Derby ahead of the vote.
At immediate risk is a huge sum of up to £500 million of investment with genuine fears that instability will further affect investor confidence costing the city jobs and investment.
Wavensmere Homes, which has already built over 900 new homes in the Nightingale Quarter, with a further 500 homes in the immediate pipeline, has said it may consider re-evaluating a further £250 million of investment in Derby.
St James Securities said that negotiations on the next phase of the £230 million Becketwell scheme were at a very sensitive stage and feared this might be threatened.
The BIDs are especially concerned about losing city centre regeneration momentum and yesterday Marketing Derby wrote to the mayor of Derby, Ged Potter, reiterating these concerns and urging a different approach be taken to solve any political problems.
Inflation returns to target
Inflation has returned to the Bank of England’s 2% target for the first time since July 2021.
Measured by the consumer prices index (CPI), which rose by 2% in the 12 months to May 2024, it is down from 2.3% in the 12 months to April.
The biggest downward contribution to the fall in inflation came from food-price inflation, which dipped to 1.7% in May, the lowest annual rate since October 2021. This was partially offset by higher petrol prices.
The UK has also won the international race to get back to target, being the first among the euro area and US to bring headline inflation back down to 2%. In fact, the UK currently has the lowest headline inflation rate in the G7 bar Italy.
Despite this, the impacts of sustained high inflation over the past three years will remain for some time, with the relative cost of essential goods expected to remain high.
The Resolution Foundation notes that overall prices have risen by 22% since July 2021 (when inflation was last at 2%), while energy prices have risen by 66% and food by 31%.
Core inflation, meanwhile, which takes out volatile factors like energy, food, alcohol and tobacco to give a clear picture of underlying trends, rose by 3.5% in the 12 months to May 2024, down from 3.9% in April.
James Smith, Research Director at the Resolution Foundation, said: “It’s very welcome to see headline CPI inflation falling back to its 2 per cent target for the first time since July 2021. And while the UK experienced a higher inflation peak during the cost-of-living crisis, it has now got back to target more quickly than either the US or euro area.
“But the legacy of a long period of very high inflation means there is unlikely to be much of a feel-good factor among families, as they continue to struggle with the higher cost of essentials.
“And while headline inflation is back to normal levels, domestically-driven services-price inflation remains elevated. This inflation will worry the Bank of England, and may give pause for thought when it comes to cutting interest rates.”
“Inflation returns to target, but Bank of England is unlikely to fire starting gun on interest rate cuts tomorrow,” noted Yael Selfin, Chief Economist at KPMG UK.
“The Bank of England will be encouraged by the slowdown in headline inflation, and while concerns will remain over elevated underlying price pressures, further falls in services inflation are anticipated over the coming months. Today’s data are unlikely to spur a surprise rate cut tomorrow, however, the MPC could have sufficient evidence to begin its easing cycle in August.
“While underlying price pressures have moderated somewhat, they remain uncomfortably high, with services inflation running at 5.7%. The Bank will need to see a continued fall in services inflation before it can be confident that headline inflation will stay sustainably at its 2% target in the medium term. A slower pace of pay rises may lead to weakening services inflation, helped by a loosening labour market.
“Energy prices continue to present a risk for the UK inflation outlook. Wholesale gas prices have risen by more than 30% since the start of April, and if prices remain at this level into the autumn, household energy bills could potentially rise again in October. Nevertheless, the overall outlook for inflation remains broadly positive, and we expect headline inflation to hover around the target range over the coming months.”
