Joules in bridge financing discussions as working capital falls below expectations
Joules, the Harborough-based designer fashion group, has seen performance fall below expectations due, it says, to “a challenging UK economic environment which has negatively impacted consumer confidence and disposable income”
Their trading underperformance has resulted in the Company’s working capital position falling below expectations, which has led the company to discussing bridge financing options as well as considering a Company Voluntary Arrangement (CVA), enabling it to pay creditors over a fixed period.
Net debt at the end of October was £25.7m with headroom of £11.4m, according to a statement to the London Stock Exchange today [Monday 7th Nov 2022 ]. However, the statement goes on to explain that this headroom is reduced by £5.6m of ‘trapped cash’ (i.e. cash held in transit by payment providers etc) and would also be reduced by repayment of the £5m short-term RCF (“STRCF”), due for repayment on 30th November 2022.
The Company is therefore in discussions with Tom Joule and its lender in regard to a bridge financing proposal in order to enable continued progress to be made with its re-financing plans. Should that bridge financing proposal, or its terms, not be agreed, the Company states that it expects it would be unable to repay the STRCF on its due date for repayment.
The Company had previously announced that it is assessing its ongoing financing requirements, including a possible equity raise, to allow the Company to strengthen its balance sheet and provide a strong platform to support its turnaround plan.
Since that announcement, the Company has had advanced discussions with a number of strategic investors, including Tom Joule, to provide a cornerstone investment in an equity raise.
It is the Group’s intention to commence consultation with key stakeholders, including suppliers, on the turnaround plan including potential alternative options, should they be required.
Consumers plan for thrifty Christmas as 59% say they’ll have less to spend
UK consumers are signalling a thriftier approach to the 2022 festive season, as 59% believe they will have less money overall to spend during the Christmas period, according to new research from Deloitte.
Surveying over 3,000 UK consumers about their spending intentions for the retail sector’s ‘Golden Quarter’, 38% of respondents say they will switch to cheaper brands or stores to seek out gifts and, when it comes to Christmas Day dinner, one in three (35%) consumers plan to do at least part of their food shop at a discounter supermarket.
With rising costs adding pressure to budgets, one in ten (11%) intend to purchase gifts either second hand or via reselling platforms this year.
Oliver Vernon-Harcourt, head of retail at Deloitte, said: “Consumers are entering the festive season with budgets under more pressure this year, and it is not surprising that almost all are considering affordability and adapting their typical Christmas spending habits in one way or another. The economic circumstances in which we enter the period has, perhaps inadvertently, fostered a spirit of thrift amongst some consumers who are looking to save money on celebrations this year.
“For some, this will mean looking to the ‘pre-loved’ market for gifts or scouting out presents via resellers. For others, this could mean shopping with cheaper stores or brands or, in the case of food, buying Christmas dinner ingredients from the discounter supermarkets.”
With the retail calendar also fast-approaching large promotional events, such as Black Friday, nearly half (46%) of consumers say they intend to buy more gifts either on sale or discounted this year.
Céline Fenech, consumer insight lead at Deloitte, commented: “Whilst it is not unusual for consumers to look for discounts in the run up to Christmas, this year’s shopping events, like Black Friday, could see even more interest than usual as budget-conscious consumers look for smarter ways to bring down the cost of their Christmas spending.”
According to Deloitte’s data, 54% of consumers intend to shop for Christmas in November and the first two weeks of December; a period which includes Black Friday.
Fenech added: “Some consumers have also indicated that they will shop closer to Christmas Day to not only manage budgets but also take advantage of any discounts. For retailers, this will mean ensuring availability of product ranges to suit all budgets and include more ‘gift’ items within promotional ranges, expanding on the clothing and footwear, and electronic goods that are usually purchased during Black Friday events.”
Over half (56%) of consumers believe they will be spending more this Christmas because of rising prices. Whilst many consumers are looking to be more resourceful with budgets, 8% state they will simply not buy Christmas gifts this year.
Vernon-Harcourt concluded, “Ongoing rising costs have seen consumer spending habits shift for a prolonged time, with non-essential items often the first to go. Unfortunately, it appears that this cost-cutting will also be reflected on some aspects of Christmas celebrations as some consumers will forgo gift-giving altogether. Whilst this will be a difficult financial decision for some, others will have re-prioritised what the festive period means to them, following a number of COVID-impacted Christmases.”
More than 80% of UK SMEs want to switch to electric vehicles
Most UK small businesses want to switch to electric vehicles but are held back by rising vehicle costs and electricity bills, new data from NatWest shows.
Despite the research revealing that 81% of SMEs want to transition to green transport, the current economic conditions are delaying plans rather than causing them to be abandoned entirely. Of those looking to take their first steps into greener transport, only 40% plan to start within the next 2 years, highlighting the need for greater support to allow businesses to fulfil their climate ambitions sooner.
SMEs are reporting that the price of electricity is a barrier for more than a quarter (28%), whilst vehicle costs are deterring a further third (32%). However, the business case for adopting electric vehicles appears to be the main motivator for SMEs looking to electrify their fleet (44%), however emissions reductions (40%) and sustainability concerns (36%) are also found to be key drivers in the move to greener transport.
Recognising the barriers preventing SMEs from taking action to improve their sustainability, NatWest Group, through Lombard, has launched Green Asset Finance which gives businesses a way to finance assets that help to make their businesses more sustainable, such as electric vehicles. Since July 2021, Lombard has provided £1.3billion in climate and sustainable funding, to businesses transitioning to electric vehicles, hybrid vehicles, and other renewable assets, including those in the Agricultural sector.
Commenting on the findings, Ian Isaac, Managing Director at Lombard, NatWest Group, said: “It’s clear to see there is appetite among UK small businesses to transition to electric vehicles in order to both lower fuel costs, and make a significant contribution towards the nation’s climate targets.
“However, the current economic climate and immediate cashflow concerns means that many SMEs feel they need to put plans on hold. We’d encourage any business looking to take that first step in their own sustainability journey to research the support measures available.
“The first step on this journey is the hardest and it’s a big decision for businesses. But our research shows the intention to transition is there, and the sooner businesses take that first step, the sooner they will be able to see the benefits. At NatWest and Lombard, we can help them make sense of their business case even against the backdrop of increasing energy costs.”
The bank is also working in partnership with energy tech company Octopus Energy to offer businesses EV charge points at discounted rates, and last year partnered with EV8 Technologies to launch the EV8 Switch app, which uses real world data to help drivers understand if switching to an EV makes economic sense for them.
If it does, the bank can then offer funding to SMEs to allow them to spread the cost of transition to EV, through options such as contract hire. This allows businesses to have certainty around vehicle operating costs over a fixed period, as well as the option to regularly refresh their vehicles and adapt their fleet to meet changing business needs and guard against the risk of technology obsolescence.
NatWest has recently begun offering Green Loans and Green Asset Finance to SMEs from £25,000, ensuring that more businesses can access funding to help transition to more sustainable practices such as electric vehicles, in turn reducing costs in the long term, all whilst supporting UK net zero targets.
NatWest has also created a new Carbon Planner, a free to use digital platform designed to help UK businesses manage their fuel and operational costs and reduce their carbon footprint to help them go and grow greener. This includes providing a cost of transport overview that businesses can then use to build a business case for investing in their transition to net zero. Since launch around two-thirds of businesses that have used the NatWest Carbon Planner have produced a carbon reduction action plan for their business.
The bank has recently also launched one of the UK’s biggest EV car parks at its Scotland headquarters at Gogarburn in Edinburgh, investing in 264 chargers for colleagues and visitors to charge their electric vehicle. The launch forms part of the bank’s aim to halve its own operations emissions by 2025.
2022 Leicester Business Festival begins today
The 2022 Leicester Business Festival (LBF) – one of the regions biggest Business Festival’s ever – begins today [Monday 7th November] with over 80 business events taking place throughout Leicester, Leicestershire and online.
The festival which runs over the next fortnight also coincide with COP27 – the 2022 United Nations Climate Change Conference – themed around protecting the world’s biodiversity for limiting carbon emissions and adapting to climate impacts.
At LBF 2022, climate impact is also featured strongly on the agenda with experts set to highlight real life examples of ways businesses can work towards net zero and be more sustainable. As well as first hand insights from Twycross Zoo on biodiversity there will be a range of expertise from local universities and businesses.
One event which will showcase the race to net zero is ‘Field of Dreams: creating a grass roots net zero football club.’ Taking place on 11 November 12-1.30pm at Heritage House, DMU Campus.
This project involves researchers at DMU who have begun scoping work with Leicester Nirvana Football Club to identify how a team begins the process of decarbonisation. The aim is to help the club become Net Zero in carbon emissions in all aspects of the beautiful game. This includes travel to games, the players’ diets and nutrition, the kits the players wear to train, the clubhouses and lighting, recycling practices and inclusive values. Both teams want to use the SDGs as a framework for collaboration to achieve their visions.
Associate Director of SDG Impact, and Net Zero Research Theme Director at De Montfort University, Mark Charlton said: “This is a very exciting project, whether you like football or not. There are so many aspects to amateur sport that will need addressing as we all work towards a Net Zero future. This is a fantastic opportunity for local businesses to come along and find out more about the actions Leicester Nirvana are taking to reach net zero.”
Other events themed around sustainability include:
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Navigating net zero: how to overcome the challenges facing businesses
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Field of dreams: creating a grassroots net zero football club
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Zero emissions, positive impact -they key actions to reduce your organisation’s carbon footprint
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Innovation masterclass – helping your business grow, profit and be sustainable
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Biodiversity conservation opportunities at Twycross Zoo
Tickets are available now and can be secured online at: www.leicesterbusinessfestival.com
Cérélia’s takeover of Jus-Rol hits hurdles with CMA
The merger of home baking brand Jus-Rol and Northamptonshire pastry maker Cerelia agreed in 2021 has hit hurdles after the Competition and Markets Authority (CMA) identified possible competition concerns, which they say could impact on prices and product quality.
The CMA launched an in-depth review into the deal in June 2022 and provisionally found that the merger brings together what are the 2 leading suppliers in the market by a considerable margin. Ready-to-bake items supplied by Cérélia and Jus-Rol account for nearly two-thirds of all such products sold in the UK.
While there are differences between the companies’ products, the evidence gathered by the CMA shows that Jus-Rol products compete with grocery retailers’ own-brand products supplied by Cérélia for the same space on many supermarket shelves. Evidence from grocery retailers shows that they consider the companies’ products to be important alternatives to one another – in particular because there are few alternative suppliers of either branded or own-brand products. Grocery retailers also told the CMA that their ability to trade off Jus-Rol and Cérélia when purchasing these products enables them to get a better deal for customers.
The CMA’s investigation provisionally found that the 2 businesses face very limited competition, with all other suppliers being far smaller, and many lacking the capabilities held by the merging businesses. The CMA also provisionally found it is unlikely that any supplier would enter the market, or expand its existing activities, to address the loss of competition brought about by the deal.
On this basis, the CMA has provisionally concluded that the deal would substantially lessen competition. This would risk UK grocers facing higher prices and lower quality products, which could ultimately be passed on to their customers.
Margot Daly, chair of the independent inquiry group carrying out the Phase 2 investigation, said: “Food prices are already increasing, which makes it important that we don’t allow a lack of competition to make the situation worse.
“Jus-Rol and Cérélia are by far the largest suppliers in the ready-to-bake sector and the competition that takes place between them helps grocers to give shoppers the best possible deals.
“Today’s decision is provisional, and we will now consult on our findings and listen to any further views before reaching a final decision.”
The CMA welcomes responses from interested parties to its provisional findings by 25 November 2022 and its notice of possible remedies, which sets out potential options for addressing its provisional concerns, by 18 November 2022. These will be considered ahead of the CMA issuing its final report, which is due by 24 January 2023.East Midlands Chamber announce Leicestershire business of the year
The Leicestershire Business of the Year awards by East Midlands Chamber, saw Scope Construction, a fast-growing contractor for the residential and commercial sectors, crowned the Leicestershire Business of the Year.
The Loughborough-based company – which provides construction, refurbishment and interior design services – also won the Outstanding Growth award at the Leicestershire Business Awards, which was held on Friday (4 November) in partnership with headline sponsor Mazars.
Founded by Maz Patel and Paz Patel in 2015, the business has almost trebled its seven-figure turnover over the past 12 months, and expects to double it again this year after building a reputation mainly via word of mouth for its work on a range of projects including shop, restaurant and car showroom fit-outs, as well as home refurbishments.
The Leicestershire Business Awards, recognised East Midlands Chamber members across 13 categories, ranging from Excellence in Innovation and Environmental Impact at organisational level through to individual honours for Entrepreneur of the Year and Apprentice of the Year, in addition to the overall Business of the Year winner.
Finalists, chosen by a judging panel of the Chamber’s senior leadership and board of directors, as well as sponsors, discovered their fate during a gala dinner attended by hundreds of people at Leicester City FC’s King Power Stadium.
Scott Knowles, chief executive of East Midlands Chamber, said: “The past few years have been challenging for our business community, and yet we continue to see so many shining examples of business success across our region.
“It’s always important to celebrate these achievements and shout about the great things happening right here in Leicestershire. We know it is a fantastic place to do business and these organisations – many of which have worked together to maximise their impact within their sectors and communities – are doing a wonderful job.
“Later this month, the Chamber will launch a Business Manifesto for Growth in the East Midlands and Beyond in Parliament that illustrates how our region is a Centre of Trading Excellence. Our Business Awards are full of companies that are living proof of this.”
Money raised for East Midlands Chamber charitable fund
The Leicestershire Business Awards – one of three awards hosted by the Chamber, along with Derbyshire and Nottinghamshire – were hosted by comedian Patrick Monahan.
A raffle was held to raise funds for East Midlands Chamber president Lindsey Williams’ three chosen charities this year – Focus, Nottinghamshire Wildlife Trust and Treetops Hospice.
Lindsey, chief executive of Coalville-based housing association Futures Housing Group, added: “Behind every nominee and winner whose name will go up in lights are people and organisations that are truly delivering for the region. Their achievements generate employment, wealth and opportunity not just for those directly connected, but for the wider community.
“So I’m proud to see the Chamber yet again take the opportunity to bring us together and celebrate our top talent – for their success but also for what they bring to the East Midlands as a whole.”
Winners of the Business Awards
Business Improvement Through Technology – Consultus International Group
Community Impact – Leicestershire Cares
Outstanding Growth – Scope Construction
Excellence in Collaboration – BrightER Futures (De Montfort University and ER Recruitment)
Environmental Impact – Michael Smith Switchgear
Commitment to People Development – CR Civil Engineering
Apprentice of the Year – Jessica Gould, CR Civil Engineering
Entrepreneur of the Year – Jaz Kaur and Narinder Nijjar, Fraser Stretton Property Group
Education and Business Partnership – Leicestershire Cares
Excellence in Customer Service – Paradigm Wills & Legal Services
Excellence in International Trade – Unimed Procurement Services
Small Business of the Year – Creative62
Excellence in Innovation – The Simulator Company
Business of the Year – Scope Construction
Businesses and community groups to have consultation on £1.14 billion devolution deal
Businesses, organisations , community groups and the public are to have their say on the £1.14 billion devolution deal which councils are keen to press ahead with as they say it will offer the region a package of new powers and funding worth £1.14 billion.
Derbyshire County Council, Nottinghamshire County Council, Derby City Council, and Nottingham City Council have all given the green light to a public consultation on devolution, so the public, businesses, community groups and other organisations will now have the chance to have their say about the deal, in a public consultation.
The leaders of each of the four councils signed up to work on a devolution deal on 30th August this year at Rolls Royce in Derby, after the Government offered the region a package of new powers and funding worth £1.14 billion.
Since August the councils have been working on agreeing a more detailed proposal for consultation, which includes more information about how devolution would work in our area.
The deal would provide the region with a guaranteed income stream of £38 million per year over a 30-year period, and would cover around 2.2 million people, making it one of the biggest in the country. It would also mean a new regional mayor and new type of combined authority for the area, from 2024.
Chris Poulter, Leader of Derby City Council, said: The East Midlands has long been overlooked and held back compared to other areas of the country. The cities and counties in our region should have a bigger voice, and this devolution deal would give us the influence, funding, and powers that we deserve.
The investment in this deal will bring with it many opportunities. We could see more jobs, better transport and housing, an enhanced greener environment, and more value for money of services provided for our people.
The proposals that we’re consulting on are just the beginning, and we’re determined to build on it over time. I would encourage everyone to give us their views on the deal by taking part in the consultation.
Barry Lewis, Leader of Derbyshire County Council, said: “Devolution is about getting a better deal for Derbyshire and the East Midlands and achieving a fair share for our region. It will bring us more money and mean we can make more meaningful decisions here, rather than in London.
“This deal will bring more and better jobs and opportunities for training, improve the local economy, result in better transport and housing, and accelerate our route to Net Zero. I encourage everyone to take part in the consultation and give us their views on devolution.
“A devolution deal, should it be agreed, would be the beginning, not the end. We’re determined to build on this deal over time, as other areas have done.
Ben Bradley MP, Leader of Nottinghamshire County Council, said: “It’s great news that we’re moving forward with devolution plans for Nottinghamshire and the wider area. I’m really pleased that we’re making progress with this.
“Devolution can bring real benefits for local people, as it has done in other parts of the country. It will mean more funding for our region, and the opportunity to have more meaningful decisions made here, near the people they affect, rather than in London, so they can be better tailored to local needs.
“This is an opportunity to create jobs, boost our economy, enhance transport, build more and better homes, improve our environment, and more, and we need to grab it with both hands. I don’t want our area to miss out on a chance to improve things for everyone who lives and works here.
“Devolution can help us be more effective locally, make better use of public money, and most importantly, improve people’s lives. It would lay the groundwork for us to build on in the future, to benefit future generations.
“I’d encourage everyone to take part in the consultation and give us their views on the devolution deal.”
David Mellen, Leader of Nottingham City Council, said: “This deal has the potential to make a significant difference and local people would see the real benefits from the investment with more and better jobs, housing, training and much more.
“For too long this region hasn’t had the investment it needed and deserves – by working on a deal we can start to address this, but this is just the start, and I will make sure that we get our fair share and make the most of this funding.
“It would allow us to start to address the long-term under-investment in our region. It would give us more control over our own area, where local people would have a say in the region’s priorities rather than decisions made in London.”
If the devolution deal goes ahead, it would create the first of a new type of combined authority, which requires new legislation from central government. As well as the £1.14 billion, it includes an extra £16 million for new homes on brownfield land, and control over a range of budgets like the Adult Education Budget, which could be better tailored to the needs of people in our communities.
The devolution deal is a level 3 deal, which offers the most local powers and funding. It would mean a new elected regional mayor, like those which already exist in other areas, who would represent both cities and counties. The role of the mayor would be to look at major issues affecting the whole region, give the area a bigger voice, and take advantage of local knowledge and expertise.
The deal means that a future mayor and combined authority could:
- Work towards Net Zero and cleaner air with new low carbon homes, retrofit existing houses with external wall insulation, promote the use of renewable energy, and protect and enhance green spaces, like areas for wildlife and green verges.
- Build on the region’s existing knowledge and expertise in green technology and promote the growth of a future low carbon economy by investing in related skills training at colleges and other training facilities.
- Set up and coordinate smart integrated ticketing and enhanced concessionary fares schemes.
- Work with Homes England to build more affordable homes, by using new powers to buy land and housing (With district and borough council consent).
- Enhance the region’s economy by developing new commercial space to maximise opportunities.
- Work with national government on initiatives to address homelessness, domestic abuse, community safety, social mobility, and support for young people.
- Take advantage of economies of scale by using combined and devolved budgets to deliver more value for taxpayers and more cost-efficient services.
Derby’s iconic Sadler Gate sees return of fashion entrepreneur
Independent Derby born and bred apparel designer, Karl Shaw is returning to Sadler Gate, this time at number 49, with his ‘Derby centric’ clothing venture; ‘Mr Shaw’.
The Derby entrepreneur also has plans for the upper floor space too, in the form of a hub for creatives and a coffee and craft beer bar. Clowes Developments, which owns the property along with several others in and around Derby City Centre many of which are now occupied, and are delighted with Karl’s plans for Sadler Gate.Kevin McFarlane, Associate Director at Clowes Developments said: “As landlords of several commercial properties within Derby city centre, Clowes recognise their responsibility to help regenerate the town. We have been working with the Council and invested parties such as Marketing Derby over the past year to provide upgraded premises for start-ups and continue to improve the aesthetics of some of our more tired looking properties. Our aim is to encourage occupiers and promote increased footfall into the area.
“We are delighted to welcome Karl Shaw back to one of our properties on Sadler Gate. Our vision and aspirations for Derby are aligned and we wish him all the best in his venture.”
Karl said: “When I started, Mr Shaw was a great way to keep my creative juices flowing; free from commercial and client constraints. I had often thought about developing a clothing brand as fashion is a great love of mine and I can’t deny the buzz from knowing someone would wear my brand… a living, breathing identity. I’m excited to combine this with my passion for Derby as we open up Mr Shaw House and combine our love for fashion, music, creativity, craft beer and coffee all in one place!”Join Business Link at East Midlands Expo 2022
Hard to believe there’s just 10 days to go to the 2022 East Midlands Expo !
An established event which East Midlands Business Link is proud to partner once again – this free to attend annual expo returns for the 20th year attended by the b2b sector, including construction , property, business, investment, finance, professional services and other related sectors. This year’s chosen venue is the prestigious De Vere East Midlands Conference Centre, in Nottingham and the date to save in your diary is the 14th November.East Midlands Business Link looks forward to greeting visitors old and new and to add a little fun to the occasion, we’re inviting guests to drop their business card in to one of our ‘festively-charged’ staff for a chance to win a case of wine delivered direct to your door. If you’d like it delivering to your home rather than your office, just write the delivery address on your card when you drop it in and don’t forget to let us know whether you prefer reds, whites or a mix.
East Midlands Expo always proves a perfect day for networking so if you want to make business contacts and/or generate new business (and lets face it, who doesn’t?) then this is the place to be.
As always, the exhibition will be open to attendees from 9.00am, with seminars taking place between 10:45am and 12.00 noon.
Custodian REIT completes multi-million acquisition of Edinburgh counterpart
Leicester-based Custodian REIT has completed its acquisition of its Edinburgh headquartered counterpart, Drum Income plus REIT plc, an income- focused real estate fund targeting UK regional commercial property assets, primarily in the office, retail and industrial sector.
Under the terms of the deal, Drum Income Plus REIT shareholders will be entitled to receive 0.530 new Custodian shares in exchange for each Drum share.
Drum Income Plus REIT Plc (DRIP REIT) was an income- focused real estate fund targeting UK regional commercial property assets, primarily in the office, retail and industrial sector. Between 2015 and 2021, it successfully purchased and managed a varied portfolio of high-quality assets in key regional locations across the UK.
In September 2021, DRIP REIT and Leicester-based Custodian REIT announced they had reached agreement on an all-share acquisition of DRIP REIT, providing shareholders with exposure to a larger portfolio with more diversity across both sectors and geography, whilst benefiting from a property strategy entirely consistent with DRIP REIT.
Commenting on the Acquisition at the outset, Hugh Little, Chairman of Drum said:”This transaction gives Drum Shareholders the opportunity to participate in a portfolio of regional real estate assets that has similar characteristics to the existing Drum portfolio but is larger and, as a result, more diversified. Drum Shareholders will benefit from lower costs as a proportion of net assets and from the greater premium to NAV at which the Custodian Shares may trade. The Board is grateful to Drum Real Estate Investment Management Limited for the skill and effort it has devoted to the Company since IPO and looks forward, on behalf of Shareholders, to a continuing investment with Custodian.”
David Hunter, Chairman of Custodian added: “I am delighted to announce this important transaction for Custodian, which I am confident should benefit both our new and existing shareholders. The property portfolios of each company are complementary, and the Acquisition is expected to deliver increased earnings and dividend cover, to further diversify our portfolio and to reduce our Ongoing Charges Ratio.”
