Manufacturing fuels hope of a V-shaped recovery – business news 2 July 2020
2 July 2020.
James Salmon, Operations Director.
Manufacturing fuels hope of a V-shaped recovery, news on a vaccine, UK firms cut 12,000 jobs, BOE warns of more to come, house prices fall, Lloyds calls for SME support, tax, insolvencies and a lot more.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
Covid-19 general news
There was another record increase in covid-19 cases in the USA. The number of new cases rose by about 53,000 on Wednesday, with Arizona, Texas and other Southern states recording new daily highs.
The number of cases in the Middle East the number of cases passed the 1 million milestone. The World Health Organisation said the region has reached a “critical threshold”.
BioNTech and Pfizer reported positive results from a small trial of a new covid-19 vaccine which showed significantly elevated” antibodies within four weeks
Markets.
The FTSE 100 ended the day flat yesterday as positive news from US manufacturing offset a strengthening pound and negative virus fears. European indexes fell while US indexes climbed modestly on news of the vaccine .
Manufacturing fuels hope of a V-shaped recovery
UK Manufacturing activity grew in June, prompting hope that the UK may see a V-shaped economic recovery following the hit from the coronavirus pandemic.
The IHS Markit/Cips manufacturing PMI, where scores below 50 show decline and above 50 show growth, rose from 40.7 in May to 50.1 in June, having hit an all-time low of 32.6 in April.
James Brougham of industry lobby group Make UK said: “Manufacturers are leading the economic recovery.” Considering the data, Pantheon Macroeconomics’ Samuel Tombs warned that “it remains highly unlikely that manufacturing output will recover to its pre-coronavirus level on a sustained basis within the next year”. Meanwhile, the survey raised concern over jobs in the sector, with employment falling for a fifth straight month in June. Rob Dobson, a director at IHS Markit, said: “Concerns are rising about the potential for marked job losses, especially once the phase out of government supp ort schemes begins.” Dave Atkinson, UK head of manufacturing at Lloyds Bank, warned that manufacturers are “bracing themselves for the second half of the year in the knowledge that a reckoning looms.”
The US Manufacturing Sector rebounded sharply in June, fuelling hopes that the world’s biggest economy is on its way back to normality as coronavirus restrictions are lifted. The manufacturing purchasing managers’ index from the Institute for Supply Management moved to 52.6 in June from 43.1 in May. Above 50 indicates a return to growth in the sector.
UK firms cut 12,000 roles
More than 12,000 UK workers are set to lose their jobs after a number of firms announced plans to lay off staff over the past two days.
Job losses announced include: up to 5,000 at Upper Crust owner SSP Group; 1,700 at plane-maker Airbus; 700 at Harrods; 600 at shirtmaker TM Lewin; up to 900 at management consulting firm Accenture; 300 across Virgin Money, Clydesdale Bank and Yorkshire Bank; Arcadia, whose chains include Topshop and Dorothy Perkins, is shedding 500 of its 2,500 head office staff; and 1,300 crew and 727 pilots at EasyJet are facing redundancy. John Lewis has also said it will close stores but has yet to detail job losses, while firms including WH Smith and Bensons for Beds have announced plans to reduce staff numbers.
BBC News says the cuts come ahead of the Government’s furlough scheme being pared back before ending in October, suggesting that with firms having to consult on redundancies for 30-45 days, “some wil l feel that now is the time to act”. With the retail sector among the hardest hit, Milan Pandya of Blick Rothenberg has urged Chancellor Rishi Sunak to deliver a “clear and comprehensive plan” to support the sector, commenting: “If the redundancies continue, the Government has a real long-term problem of unemployment.”
BoE warning on unemployment
Bank of England interest rate-setter Jonathan Haskel has said the UK economy could be affected by the pandemic more severely than previously thought. He told the Brighton Chamber of Commerce that “Worryingly the indicators of rising unemployment are already revealing themselves, with unemployment claims recorded to date enough to put us back to levels of unemployment not seen since the financial crisis.”
Pandemic hits female workforce
Writing in the Mail, Dame Helena Morrissey looks at the impact the coronavirus and lockdown has had on working women. She notes PwC research showing that if the UK increased the female employment rate to the same level as Sweden, the economy would grow by almost 9%, equivalent to £180bn.
Annual house prices see first fall in eight years
House prices in the UK fell for the first time on an annual basis in eight years in June, according to Nationwide, slipping 0.1% year-on-year, having increased 1.8% in May. Month-on-month, prices slipped 1.4% as the coronavirus lockdown hit the property market. Figures show the typical home was worth £216,403 in June. Nationwide’s chief economist, Robert Gardner, commented: “While latest data from HMRC showed a slight pick-up in residential property transactions from April’s low, in May they were still 50% lower than the same month in 2019.” He added that with lockdown measures set to ease further, market activity is likely to edge higher in the near term but remain below pre-pandemic levels.
Lloyd’s of London calls for SME support
A new report by Lloyd’s of London calls for the insurance industry to do more to help SMEs recover from the impact of the coronavirus crisis, with chairman Bruce Carnegie-Brown saying: “COVID-19 has demonstrated that there is much more we can do to support our customers by providing protection for the changing risks they face.” Business interruption insurance designed to help SMEs during future crises, by pooling non-damage business interruption coverage among participants in Lloyd’s insurance market, is one suggestion set out in the report.
OECD: US remains part of tax talks
The OECD has said the US is still taking part in discussions around a global digital tax, despite American officials suggesting the contrary. US treasury secretary Steven Mnuchin has said the US would pull out of talks if European countries did not halt their plans for independent digital taxes, while US trade representative Robert Lighthizer recently said the US was “no longer involved in the negotiations”. Despite these comments, OECD general secretary Angel Gurria yesterday insisted: “To be clear, contrary to some earlier media reports, the US has not pulled out of the negotiations.” Since the US suggested it was stepping away from talks, finance ministers from the UK, France, Italy and Spain have exchanged correspondence with American officials over the matter, with it suggested the European nations have offered to take a “phased approach” to their individual taxes so as to get US officials back around the tabl e. Meanwhile, Mr Gurria has stressed the need for international agreement on a plan that will “ensure that a minimum level of tax will be paid, no matter how much clever tax planning is undertaken by multinationals.”
MPs call for digital tax amendment
A cross-party group of 22 MPs have called for an amendment to the Digital Services Tax that would force large technology companies to disclose country-by-country detail of their revenues and profits. Under the existing system, the information is disclosed to the taxman for all multinational companies but is not made public. In 2016, MPs voted in favour of releasing the information for all multinational companies so as to help tackle tax avoidance but the necessary legislation has yet to be brought forward.
Business bosses back online sales tax
A poll of company leaders suggests that business rates should be replaced with an online sales tax, with the majority backing the move. With many digital businesses prospering amid the coronavirus crisis and lockdown, BDO’s Paul Falvey said it is “logical to pay tax based on online sales to help the economy recover”.
Wigan woe as club enters administration
Wigan Athletic has become the first club in professional English football to enter administration following the coronavirus pandemic. This comes just four weeks after Hong Kong-based consortium Next Leader Fund took over the Championship club, promising to secure its future. Administrators from Begbies Traynor say the immediate objective is to “ensure the club completes all its fixtures and to urgently find interested parties to save Wigan and the jobs of the people who work for the club”. Under league rules, Wigan face a 12-point deduction for entering administration.
Lookers results delay leads to suspension from trading
Shares in car dealership firm Lookers have been suspended from trading after the company failed to publish its final results. An accounting probe carried out by Grant Thornton is ongoing after a £19m hole in Lookers’ accounts was identified. Auditor Deloitte has said it will resign as soon as the accounts for last year are released, while five directors at Lookers, including its chairman, are due to step down.
City AM
Sainsbury’s sees sales climb in lockdown
Sainsbury’s saw sales climb 8.5% for the 16 weeks to 27 June but expects the coronavirus pandemic to deliver a £500m-plus hit to profits. Julie Palmer of Begbies Traynor says new CEO Simon Roberts is facing the task of “navigating the supermarket through the murky economic waters of COVID-19.”
The Scotsman, Page: 34
Police raid Wirecard offices
Police have raided Wirecard offices on the continent as investigations into the €1.9bn accounting scandal intensify. Prosecutors and police officers were supported by police IT experts as they swept five properties in Germany and Austria, including Wirecard’s headquarters near Munich. Meanwhile, Felix Hufeld, head of regulator BaFin, has refuted suggestions it fell short in investigating Wirecard, saying its ability to act was limited as the firm was not classified as a financial services provider.
Tesla
Tesla overtook Toyota to became the world’s most valuable carmaker, overtaking Toyota, despite building on 4% as many vehicles last year as their market capitalisation hit $208 billion yesterday.
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections