Dunelm sees “strong sales growth”

Tess Egginton
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Dunelm sees “strong sales growth”
Dunelm has seen “strong sales growth” while pre-tax profits have declined, according to interim results for the 26 weeks to 31 December 2022. The Leicestershire-based homewares retailer opened three new stores in the period, during which sales were up 5% to £835m, from £795.6m in the same period of the prior year, and 43% higher than pre-pandemic (in H1 FY20). Profit before tax was down on the prior year, slipping to £117.4m from £140.8m, which the firm said was expected and reflected the impact of sale timing and strong post-pandemic demand in the prior year, as well as inflationary impacts. Looking ahead, during the period, Dunelm made a £17m investment in digitalisation, capability and capacity to support future growth opportunity. Reflecting on current trading the company noted that whilst customers have been resilient to date, the consumer outlook remains unpredictable. Dunelm’s profit expectations for the current year, however, remain unchanged. Nick Wilkinson, Chief Executive Officer, said: “We are all learning to live in a new, complex and rapidly evolving economic reality. Recognising this, our focus has been on ensuring that we continue to offer outstanding value to our savvy customers through a proposition which is committed to quality, at the right price, across an expanding range of relevant products. We believe that this is why we have continued to grow our sales, customer numbers and market share. “In this environment, agility, creativity and innovation are more important than ever and we have endeavoured to make every pound count, both for ourselves and for our customers, helping to mitigate the impact of inflation. While we do this, it is important that we also maintain our long-term thinking, invest for sustainable growth and continue to ensure we are in a position to seize the significant opportunities ahead of us. “Much like during the pandemic, our customers, colleagues and the communities we operate in will remember how businesses behaved when times were tough, and we are confident that our approach of offering outstanding value and choice for all will enable us to – once again – emerge from this challenging period stronger than ever.”

What are your customers doing differently in light of the cost-of-living crisis? By James Pinchbeck, partner at Streets Chartered Accountants

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What are your customers doing differently in light of the cost-of-living crisis? By James Pinchbeck, partner at Streets Chartered Accountants
James Pinchbeck, partner at Streets Chartered Accountants, discusses the impact of the cost-of-living crisis on your customers and what businesses need to consider. With the rate of inflation having seemingly or hopefully peaked at a 40 year high and with Prime Minster Rishi Sunak’s announcement that he seeks to half the rate of inflation by the end of the year, we might start to feel some sense of easing in the cost of living. However, against this backdrop many households and businesses are still feeling the financial impact of the pandemic. This is aside from the fact that salaries are not keeping pace with inflation. How then does or is the current economic situation affecting customers and consumers alike and what do businesses need to think about or consider? Whilst this may depend on the nature of your business, the broad considerations tend to be the same. Perhaps the starting point is what we buy and why? Is it a necessity, essential through to desirable or even a luxury. Whilst we may cut back on and even forego luxuries, essentials are something we tend to continue to purchase. Though for such items, products or services, we continue to purchase we may consider or are more likely to consider alternative provision perhaps trading down or seeking lower cost alternatives. We may also look at reducing not just our rate of consumption or use, but even the frequency of our purchase. When it comes to where or who we buy things from, whilst we may have our preferred supplier or outlet in the current climate, we are increasingly likely to at least consider the same in a quest to find comparable cheaper alternatives. This is often even despite the longevity or depth of a business relationship. When things become financially tighter we tend to be more thorough and considered, often taking longer to make the decision to make purchases, certainly high value capital items and one-off purchases – a process which is likely to involve greater consideration and analysis before reaching or justifying the decision to purchase or not. Who doesn’t like a good deal or offer! Incentives, promotions and offers are likely to be key for those considering making a purchase as consumers and customers seek to get better value for money. Whilst businesses will no doubt look to adapt their marketing to respond to conditions affecting their business, perhaps one of the key areas to focus on is customer service and experience, both for existing and new customers. At a time when businesses are dealing with rising costs, supply chain shortages, even labour shortages, many will probably be experiencing a deterioration in their level of customer service and experience. Unfortunately, this comes at a time when most of us are feeling poorly served, perhaps are seeking or demanding more and as such puts in jeopardy our business relationship. Business as normal may be the approach of some, though for most if not all there is a need to consider both the short and longer term impact of the current situation. Few of us are likely to be running our businesses or undertaking our marketing in a year’s time like we are today. Taking time out to consider not only how your business is being affected but also what you need to do differently are likely to be key to your continued success.   See this column in the February edition of East Midlands Business Link Magazine here.

Over 100 SME manufacturers apply for £3m Made Smarter East Midlands

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Over 100 SME manufacturers apply for £3m Made Smarter East Midlands
More than 150 businesses have now applied for Made Smarter East Midlands – with two-thirds already going forward to the next stage. In excess of 100 eligible expressions of interest have been received since the programme launched in December. During an event staged as part of Leicestershire Innovation Festival 2023, three regional businesses this week described how digital technology had supported growth. The session, led by Made Smarter East Midlands Programme Director Dr Chris Owen, outlined how new digital technologies can help to reduce waste and inefficiency while increasing resilience and competitiveness. He was supported by case studies from:
  • Anne Ford, Managing Director of Hinckley-based ballscrew manufacturer PGM Reball;
  • Mike Hague Morgan, Executive Director of Grantham-based engine and battery manufacturer Autocraft Solutions Group;
  • Darren Joint, Managing Director of Grantham-based signmaker and digital printer Viking Signs.
Anne described the cultural shift as digital technology, viewed by some as taking jobs from people, was found to reduce mundane tasks and free up engineers to instead focus on skilled tasks. Mike summarised how digitalisation had helped Autocraft to develop new skills and careers. One outcome was taking on more tech apprentices, who then learned about manufacturing while transferring their own digital knowledge to existing staff. Productivity is the theme of this year’s Leicestershire Innovation Festival, which runs until Friday. The festival is led by the Leicester and Leicestershire Enterprise Partnership (LLEP). The launch event at Loughborough University last week heard that the vast majority of businesses in Leicester and Leicestershire have fewer than 250 employees. Therefore, in order to significantly increase regional productivity, it is essential that SMEs are able to do more while using less. There are 2,790 manufacturing SMEs operating in the East Midlands region. Made Smarter East Midlands commenced after East Midlands growth subs – including the LLEP Business Gateway Growth Hub – combined to win £3m of Government funding. Its goal is to engage with more than 400 manufacturing SMEs in Leicester and Leicestershire, Derby and Derbyshire, Nottingham and Nottinghamshire, Lincoln and Greater Lincolnshire. Applications are being accepted now from manufacturing businesses with between 10 and 249 employees and a turnover of up to £50m. All interested businesses need to do is register through the Made Smarter website. Eligible businesses will be moved forward through the programme, with ineligible businesses referred for alternative support. Of the successful applicants, 130 will move on to digital transformation roadmapping, with 80 of those receiving free and intensive technical advice to develop their proposition. Made Smarter has experts available across eight disciplines, including 3D printing, AR and VR, big data, mobile devices, Internet of Things, industrial cyber security and more. More than 50 grants are also available for capital or revenue products, based on 50% match-funded grants of up to £20,000.

Unemployment’s down, but number of ‘economically inactive’ people hits record high

Stuart Pearcey
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Unemployment’s down, but number of ‘economically inactive’ people hits record high
The unemployment rate in the East Midlands fell slightly from 3.4% to 3.3% in the three months to December, according to the Office for National Statistics’ latest regional labour market data. And although that’s still below the national average, the figures show the region’s economic inactivity rate – measuring the number of working-age people who have dropped out of the labour market for reasons such as retirement, caring duties, long-term ill health or studying – climbed to a record high of 22.7%, compared to a UK rate of 21.4%. East Midlands Chamber chief executive Scott Knowles said: “After an upwards trajectory in the level of unemployment since the summer – albeit against a context of still being at historically low levels – it is good to see this curve begin to flatten in recent months. “As we also saw with the UK economy narrowly heading off a widely-expected recession at the end of 2022, this is another important indicator in illustrating the resilience of our businesses during what has been a very challenging three years with pandemic restrictions followed by a cost-of-doing-business crisis. “Yet we shouldn’t get complacent about a strong jobs market and our own research suggests unemployment levels may not remain so low this year. “Our Quarterly Economic Survey for Q4 2022 found there was an 8% decline from quarter to quarter in the proportion of East Midlands businesses that added to their workforce in the previous three months, while there was a similar drop-off in recruitment prospects over the coming three months.” The rising economic inactivity rate – running at 18.7% immediately before Covid-19 lockdowns – poses a cause for concern and the Chamber has urged Chancellor Jeremy Hunt to address it in the forthcoming Spring Budget, scheduled for 15 March. Scott added: “Not only are they continuing to face unsustainable cost pressures, but as the rising economic inactivity rate demonstrates, we have one of the tightest labour markets ever seen. Businesses that want to grow, and create jobs and wealth in their local areas, are unable to do so because of acute skills shortages. “This poses a major concern for the road ahead as our economy plateaus but with the Spring Budget fast approaching, there are measures the Government can take to support businesses to develop a skills base fit for 21st century industry. “In our Business Manifesto for Growth launched in Parliament last November, we proposed a series of reforms around how businesses invest in their people. “These include flexible incentives for business investment in staff training, expanding the use of the apprenticeship levy, bringing forward the introduction of the lifelong loan entitlement to support retraining and the retainment of an older workforce, and a comprehensive reform of the shortage occupation list to allow sectors facing urgent demand for skills to get what they need. “In other words, this is about ‘getting the basics right’ – removing the day-to-day barriers for businesses and ensuring the basic building blocks of economic success are in place.”

G F Tomlinson to progress multi-million-pound planetarium in Nottinghamshire

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G F Tomlinson to progress multi-million-pound planetarium in Nottinghamshire

Pre-construction work has officially started on the multi-million-pound planetarium at Sherwood Observatory Science Discovery Centre in Sutton-in-Ashfield, Nottinghamshire.

Midlands-based contractor G F Tomlinson has been appointed through Scape’s Beyond the Public Sector framework to complete pre-construction design and planning, with the state-of-the-art centre expected to be completed and fully operational by autumn 2024.

Working alongside SCAPE, one of the UK’s leading public sector procurement authorities, has enabled the client to accelerate the delivery of the scheme through early contractor involvement with G F Tomlinson.

The development will transform a disused underground Victorian reservoir, which was dug in the 1880s, into an education centre for school and group visits, and will feature an exhibition hall, classrooms, a café and meeting rooms, as well as the state-of-the-art planetarium.

The reservoir will have a new structure built above it, to increase the useable space and transform the existing structure into a habitable and unique building. The scheme aims to inspire interest and careers in STEM learning, as well as increasing footfall to the local area.

Plans were submitted to Ashfield District Council by Mansfield and Sutton Astronomical Society, in November, following aspirations to increase annual visitor numbers from 3,000 to 20,000.

Funds for the project have recently been awarded through a contribution of £3.1 million from the government’s Levelling Up Fund Round 2. Further funds were also secured through the council’s £62.6 million Towns Fund.

Craig Stopper, framework construction manager at G F Tomlinson, said: “We feel very privileged to have been chosen as the main contractor, by Mansfield and Sutton Astronomical Society, to lead on such an exciting and unique project, and what promises to be a pivotal tourism and educational attraction.

“The multi-million-pound scheme will attract thousands of visitors to the region and raise not only awareness of the local area and the history of the site, but STEM career opportunities for future generations. We very much look forward to bringing the vision for this planetarium to life.”

Mark Robinson, group chief executive at SCAPE, said: “The Sherwood Observatory will not only breathe new life into the local community but will provide exceptional social value by inspiring interest in STEM learning careers.

“We are, therefore, delighted to be working closely on such a special project with our partner, G F Tomlinson and Mansfield and Sutton Astronomical Society, via our SCAPE Beyond the Public Sector Framework. Our delivery teams will be instrumental in ensuring efficiency, time and cost savings throughout.”

Dr Steve Wallace at Sherwood Observatory said: “We have been eagerly anticipating this moment for several years and it’s great to have reached the point where we are able to have G F Tomlinson join the team. We believe that the young people in our area should be afforded the same opportunities for extracurricular enrichment as those from more affluent areas.

“The new Centre greatly increases the capacity of the observatory, to deliver outreach, and will help to inspire a new generation of scientists and engineers from across the region, thereby supporting jobs growth and prosperity.”

Cllr Matthew Relf, executive lead member for regeneration and corporate transformation, said: “This is such a fantastic project that will help supercharge the astronomical society’s brilliant work on engaging young minds with STEM subjects, lighting a fire in our next generation of scientists and engineers.

“It’s one of the many interconnected projects – covering health and wellbeing, tourism, skills and jobs and urban regeneration – that are coming to Ashfield over the next few years as part of our ambitious regeneration programme to turn around decades of neglect. These projects will benefit not just Ashfield but the broader region too. Yet another great reason to Discover Ashfield.”

Advertising Standards Authority upholds complaints against Leicester company’s Harold Shipman ad

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Advertising Standards Authority upholds complaints against Leicester company’s Harold Shipman ad
The Advertising Standards Authority (ASA) has upheld 115 complaints against a Leicester life insurance company’s ad featuring serial murderer, Harold Shipman. Know for its provocative marketing, DeadHappy came under fire in January after including a picture of Shipman in two paid-for social media ads on Facebook and Instagram, with overlaying text which stated: “LIFE INSURANCE … Because you never know who your doctor might be.” Shipman is estimated to have murdered between 215 and 260 of his patients. In a statement, ASA said that the adverts “trivialised and made light of the murders committed by Harold Shipman, such that they were likely to cause both serious and widespread offence to those who saw them.” It added: “We further considered that any reference to the murderer in advertising material was likely to be distressing, particularly for those who had lost family members or friends at Shipman’s hands and that, in the context of an ad promoting life insurance, the distress caused was unjustified. “We concluded that the ads were not prepared with a sense of responsibility to consumers and to society and did not comply with rules on issues of harm and offence. We welcomed DeadHappy’s assurance that they would not be repeated.” DeadHappy has since apologised for any offence or distress caused, saying it was never their intention to offend and that once it became clear that the ads were causing offence, they removed them. The ads went live at 2 pm on 23 January, and were taken down at 8 am on 24 January. DeadHappy confirmed that they would not run the ads again and are reviewing their processes in relation to the creation and approval of ads, endeavouring to make better informed decisions going forward.

Loughborough University director lands non-exec role with Sport England subsidiary

Stuart Pearcey
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Loughborough University director lands non-exec role with Sport England subsidiary

Loughborough University’s Commercial and Facilities Director for Sport Jo Simpson has been appointed a Non-Executive Director to the Sports Council Trust Company board – a subsidiary of Sport England.

Whilst remaining in role at Loughborough, Simpson will work collaboratively with the Sport England Executive Team to deliver against its agreed objectives. As part of the role, Jo will advise on nationwide investment opportunities and ensure the business is adhering to its overall strategic goals. Jo, who has extensive experience in both the sport and private sector, joined the University in 2016 and has since led Loughborough Sport’s commercial offering by generating external income and additional revenue to support the growth of its world-class sporting ecosystem. She previously spent 11 years at the Youth Sport Trust as both Finance Director of the Group and Managing Director of the Trading Company, and nine years as Vice Chair of the British Wheelchair Basketball Board. “I am delighted to be joining the board of the Sports Council Trust,” Simpson said. “The work they do to use sport to preserve and safeguard the physical and mental health of communities across the UK is hugely inspiring and impactful. “By providing access to world-class facilities they allow members of the public to play more sport helping to create communities who are happier, healthier and better connected. These facilities are also invaluable training environments for elite athletes, allowing them to perform at their best on the international stage. “The synergies with Loughborough are clear. We have created a world-leading sporting ecosystem with opportunities for all supported by multiple commercial partners. “I am very excited to contribute my commercial experience to support and grow the incredible work done by the Sports Council Trust.”

16.1% rise in insolvency-related activity in East Midlands

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16.1% rise in insolvency-related activity in East Midlands

The number of East Midlands businesses experiencing insolvency-related activity in January jumped by 16.1% compared to the same period in 2022, according to new research from the Midlands branch of R3, the insolvency and restructuring trade body.

R3’s figures, which are based on an analysis of data from business intelligence provider Creditsafe, show that there were 72 cases of insolvency-related activity in the region last month, up from 62 in January 2022.

The statistics, which include liquidator appointments, administrator appointments and creditors’ meetings, show a similar picture for December 2022, with a 22.8% year-on-year rise in insolvency-related activity compared to December 2021.

The figures come on the back of a number of high-profile company administrations in recent weeks, including local high street retailer Paperchase, and the airline Flybe, which served the region from its West Midlands base at Birmingham Airport.

R3 Midlands chair Eddie Williams, a partner at PwC in the region, said: “What we are seeing here in the East Midlands is a reflection of what is happening to businesses at a national level, where annual insolvency numbers are now riding at a 13-year high.

“Statistics published by the Insolvency Service at the end of January show that corporate insolvencies in England and Wales increased by 57.3% last year to 22,109 compared to 2021’s figure of 14,059, and by 75% in comparison to 12,632 in 2020.

“Rising numbers of company directors in the East Midlands are now turning to insolvency processes to resolve their financial issues in the face of rising costs, low consumer confidence and ongoing economic turbulence.

“These issues will not disappear overnight, and we urge business owners to be aware of the first signs of financial distress and seek advice from a qualified source as soon as they show themselves. Many R3 members offer a free initial consultation to those who are looking for such help and want to explore their options.”

Administrators sell part of fibre infrastructure installation business saving 83 jobs

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Administrators sell part of fibre infrastructure installation business saving 83 jobs
Following the appointment of Tom Straw and Chris Lewis of RSM UK Restructuring Advisory LLP over Light Source Design Limited on 31 January 2023, the administrators have achieved a sale of part of the Nottingham-headquartered business, securing 83 jobs and enabling the principal customer Openreach to minimise disruption to its national fibre network build programme. The sale was to M Group Services Telecom Division, giving them an increased provision of fibre build and other services to Openreach, and who will also be working closely with the company’s sub-contractor partners to maximise employment opportunities and mitigate the impact of the administration. Tom Straw, partner at RSM UK and joint administrator, said: “We are delighted to secure a partial sale of the company’s business and assets, including the right to continue using the company’s name and brand, through a complex multi-faceted transaction in a short timeframe. This has saved jobs and allows for the best possible return to the company’s creditors. We would like to wish the purchaser all the best taking the business forward.” Mark Turner, Managing Director of the Telecom Division at M Group Services, said: “We are proud to be delivering solutions for the future of UK telecommunications infrastructure. This agreement further strengthens the long-standing relationship between Morrison Telecom Services and Openreach. We look forward to welcoming our new colleagues and sub-contractors and the additional capability they bring to our business.”

Leicester projects support more than 1,700 local people and 400 businesses following £3m funding scheme

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Leicester projects support more than 1,700 local people and 400 businesses following £3m funding scheme
Five community initiatives have supported more than 1,700 local people and 400 businesses after Leicester City Council helped them to bid for a share of £3million in funding. Last summer, Leicester City Council submitted the five bids from among 29 applications received to the Government’s Community Renewal Fund (CRF), a short-term funding scheme aimed at building skills, supporting local businesses and providing employment support in the wake of the COVID-19 pandemic. All five bids were successful, and resulted in the five projects benefitting from a share of £3million in funding. The projects were:
  • Positive Communities – a voluntary and community sector partnership of 12 local organisations led by the Highfields-based Bangladesh Youth and Cultural Shomiti, working to support people into employment and developing new skills development. It received £584,230.
  • A community ESOL (English for Speakers of Other Languages) scheme aimed at improving language skills to help people into employment, led by Leicester-based Twin Employment and Training. It received £500,000.
  • The ‘She Inspired Business Playbox’ project – comprising five local voluntary and community sector organisations – which works to support women into employment and business. The project was led by Zinthiya Ganeshpanchan Trust, a local organisation helping women to escape from poverty and abuse, and was successful in its bid for £349,588.
  • Leicester Accelerator – a partnership of seven business support organisations led by East Midlands Chamber of Commerce. They successfully bid for £1million of CRF funds, to fund a range of support programmes for businesses, including the use of digital technology, mentoring, and grants.
  • Leicester Textiles Renewal – an integrated support programme to improve skills, support innovation and encourage best practice in the city’s textile and garment industry. The bid, led by Leicester City Council, received £500,000 of CRF funding.
The projects ran from 1st November 2021 to 30th September 2022, and so were expected to achieve results quickly. All of them involved collaborative working between a series of partner organisations, so there was considerable emphasis on joint working and shared responsibility. As well as leading on the textiles renewal project, the city council oversaw the bidding process, provided administrative support for each scheme and has evaluated the success of them all. The city council also hosted a celebration event for the projects, which was held at City Hall in Leicester on 10 February. People who benefitted from the schemes attended, along with the community groups and organisations that delivered the five projects. As a result of the projects, a total of 1,786 individuals and 426 businesses have been supported. In more detail:
  • 553 people who were previously classed as ‘economically inactive’ and a further 567 who were unemployed were helped into work or training;
  • 666 employed individuals were supported to increase their skills;
  • 391 small businesses and 35 medium or large businesses benefitted from tailored business support;
  • 477 people gained a qualification, for example in maths, ESOL or textiles training;
  • 52 businesses were supported to develop decarbonisation plans;
  • 13 new businesses were created.
Leicester assistant city mayor responsible for jobs and skills, Cllr Danny Myers, said: “It’s great to see what a far-reaching impact these agile and innovative projects have had in such a short space of time. They are a great advert for partnership working, showing what can happen when community groups work together to achieve shared goals. “The city council has played a supportive role throughout, from overseeing the bidding process and financial management of the schemes, through to evaluating their results. We also managed the textiles renewal project, which we know has resulted in more workers knowing their rights and gaining important new skills in this area via our textiles training academy. This will help to raise standards in the garment industry. “Initiatives like these are a key part of our work to help Leicester meet its potential, to become a fairer place to work. We will continue to work with community organisations who understand the need to help people develop their skills and build their confidence so that they can get better paid work with better rights.”
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