Business news 10 December 2024
SMEs optimistic despite economic challenges. Festive spending set to soar. Nearly 40 stores closing every day. Businesses paralysed by budget woes. Planning, Saudi trade, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
SMEs optimistic despite economic challenges
Despite ongoing economic uncertainties, a survey by KPMG revealed that 92% of Britain’s small and medium-sized enterprises (SMEs) are optimistic about their growth in the coming year. Similarly, 89% of decision-makers from smaller businesses surveyed by Aviva expressed confidence heading into 2025. Euan West, head of KPMG’s private enterprise practice, said: “2024 has been a turbulent year, so it’s encouraging to see that private businesses are showing resilience.” However, challenges remain, with over a third of respondents concerned about the impact of increased national insurance contributions and the national minimum wage on profitability.
Festive spending set to soar
According to a survey by PwC, festive spending in the UK is projected to increase by 5% this year, reaching £22.7bn. The average expenditure per person on gifts and celebrations is expected to rise from £416 to £433. This increase is attributed to consumers feeling more confident after the easing of the cost of living crisis, with UK inflation dropping from 10.5% in December 2022 to 2.3% in October 2023. Consumers are prioritising food and drink, with a notable interest in premium options. Additionally, clothing is a top spending category for under-25s, indicating a potential recovery for retailers. PwC noted: “Consumers named food and drink and Christmas dinner as the top spending priorities for 2024.” Overall, the outlook for festive spending appears optimistic as consumers are ready to embrace the holiday season.
Nearly 40 stores closing every day
The UK retail sector is facing a significant crisis, the Daily Express reports, with major store closures occurring at an alarming rate. According to PwC: “A staggering 38 stores are closing daily across Britain,” as retailers grapple with rising costs and a shift towards online shopping. Notable closures include Dobbies Garden Centres, which are deemed “unprofitable,” and the popular fashion chain Monki, owned by H&M, which will close all its UK stores by 2025. Additionally, Ann Summers will close its Doncaster location by Christmas Eve. The trend of closures is expected to continue, impacting various sectors including fashion, homeware, and supermarkets.
Businesses paralysed by budget woes
Businesses are facing a “paralysed” state following Rachel Reeves’s recent budget announcement, which has led to a significant slowdown in hiring. According to an index by Manpower Group, hiring intentions have stalled at 28% over the past three months, reflecting a similar trend observed after the COVID-19 pandemic. Michael Stull, managing director at ManpowerGroup UK, stated: “There is a strong appetite to grow but the new government’s actions have thrown the labour market into yet another period of uncertainty.” The budget outlined £40bn in tax increases, including a rise in employers’ national insurance contributions, which has contributed to a decline in business confidence and concerns about potential job losses among workers.
Developers to dodge planning committees
The UK Government has announced plans to streamline the planning process for property developers, allowing applications that comply with local development plans to bypass planning committees. Housing Secretary Angela Rayner stated that this move aims to “tackle chronic uncertainty, unacceptable delays and unnecessary waste of time and resources.” The initiative is part of the government’s “Plan for Change,” which includes a national scheme of delegation and enhanced powers for local planning officers. The ministry of housing, communities and local government believes these changes will provide “greater certainty to housebuilders” and help achieve the target of building 1.5m homes by 2029. However, the proposals are still subject to expert consultation and a public review next year.
Starmer champions UK-Saudi ties
Sir Keir Starmer has defended his trip to Saudi Arabia as essential for boosting the UK economy amid calls for him to raise human rights concerns with crown prince Mohammad bin Salman. Speaking during a visit to Riyadh, the Prime Minister insisted his “sole intention” there was to help drive up living standards in the UK. He pointed to recent agreements with Saudi Arabia arguing that they could create 4,000 jobs in the UK. But Sir Keir accused predecessor Boris Johnson of “going cap in hand from dictator to dictator” when the former Prime Minister met the Saudi crown prince in 2022.
Markets
Global equities stalled as traders turned attention to tomorrow’s US inflation reading for clues on the path of interest rates.
Overnight in the US the S&P 500 fell 0.61% to 6052.85 and the NASDAQ fell 0.62% to 19736.69. This morning on currencies, the pound is currently worth $1.2758 and €1.2114. On Commodities, Oil (Brent) is at $71.85 & Gold is at $2676. On the stock markets, the FTSE 100 is currently down 0.5% at 8309 and the Eurostoxx 50 is down 0.22% at 4974.
Cryptocurrencies ran into a bout of selling as the optimism sparked by Donald Trump’s embrace of the sector begins to cool. Bitcoin fell below $95,000 at one point.
Ashtead
Ashtead, A British construction equipment rental company, is ditching its main listing on the London Stock Exchange in favor of New York. The move is a yet another blow for the City’s capital markets, which have seen a steady exodus of companies.
Ashtead believes “the US market is the natural long term listing venue”. Shifting its primary listing to the US from London “is in the best interests of the business and its stakeholders”. It still plans to keep a UK listing. “Today Ashtead is substantially a US business, reporting in US dollars, with almost all the group’s operating profit (98% in FY24) derived from North America, which is also the core growth market for the business.
Murdoch
A Nevada court has denied the billionaire, Rupert Murdoch’s attempt to change a family trust and give control to his eldest son. Mr Murdoch wanted to amend a family trust created in 1999 to allow his son Lachlan to take control without “interference” from his siblings Prudence, Elisabeth and James who are reported to have different political sensibilities and vision for the future of the media empire.
Quantum Google
Google unveiled “Willow”, a quantum chip which it says needs just five minutes to solve a mathematical task that would take the fastest supercomputers 10 septillion years, longer than the age of the universe.
Moonpig
Moonpig reported a swing to a half-year loss amid tough trading conditions in its Experiences arm. The greeting cards seller and gifting firm backed annual guidance, however. Moonpig’s pretax loss in the six months to October 31 amounted to £33.3 million, swinging from profit of £18.9 million a year prior. Revenue rose 3.8% on-year to £158.0 million from £152.1 million.
Nvidia
Nvidia fell, dragging down the wider information technology sector, as China opened a probe over suspicions that the US chip-maker broke anti-monopoly laws around a 2020 deal. The move is seen as a retaliatory move by Chinese authorities over US actions against Chinese companies. Beijing unveiled the investigation days after US President Joe Biden’s administration launched its third crackdown on China’s semiconductor industry in as many years. China’s State Administration for Market Regulation did not elaborate on the potential breaches but said Nvidia was also suspected of violating commitments made in 2020 during its acquisition of Mellanox Technologies Ltd.
BP
BP announced it will “significantly reduce” investment in renewable energy through to 2030, as it combines its offshore wind business with that of Tokyo-based power company Jera Co Inc. The equally-owned joint venture, Jera Nex BP, is set to advance the companies’ existing wind projects and create one of the world’s largest global offshore wind businesses. However, the standalone business will “significantly reduce BP’s anticipated investment into renewables through the rest of this decade”, BP said in a statement.
Wealth creators flee UK over tax hikes
Rishi Khosla, co-founder and CEO of OakNorth, has expressed concern that “wealth creators” are leaving the UK due to recent tax hikes. He asserted that the Government’s actions do not align with its narrative of promoting economic growth. The Chancellor, Rachel Reeves, has raised the maximum capital gains tax rate to 24%, prompting warnings from business leaders about the potential impact on the UK’s attractiveness for entrepreneurs. Khosla remarked: “I absolutely know that the change in approach to taxation for wealth creators is driving… wealth creators out of this country at a rate which, frankly, I have not seen before.” He also pointed out that the Government’s investment strategy favours large corporations over start-ups, which he believes are crucial for innovation and growth.
Bank of England warns that hedge funds bring ‘vulnerabilities’ to gilt market
Bank of England deputy governor Dave Ramsden has warned that leverage used by hedge funds to build larger positions in UK government debt “could lead to system-wide risks” and needs careful monitoring. Ramsden, who is head of markets at the BoE and in charge of its balance sheet, was giving details of a new funding window for non-banks that the BoE plans to offer in periods of financial stress. He added that there had been no major bank failures or bouts of market dysfunction in 2024, even though political events had stoked volatility.
Severn Trent’s £1.68bn accounting trick exposed
Severn Trent Water has been accused of using an accounting trick to inflate its balance sheet by over £1bn, BBC Panorama has revealed. The company is accused of creating a shell company and then have its parent buy it for £3bn. Severn Trent Water then acquired 49% of the firm – and that investment was valued in the water company’s accounts at £1.47bn. The ruse was uncovered by retired auditor Stanley Root, who stated: “This is as near to an unreal transaction as you can get… I think the balance sheet, the financial statements, are misleading.” The BBC argues that the inflated balance sheet has been used to justify shareholder payouts. Severn Trent denies any wrongdoing, asserting that all dividends are justified by earnings.
Frankie Dettori named after losing anonymity battle with HMRC
Frankie Dettori has lost a three-year battle for anonymity regarding his involvement in a controversial tax avoidance scheme established by Paul Baxendale-Walker, a former solicitor and porn star. The scheme, deemed a “sham” by a tax tribunal, allowed wealthy clients to set up trusts to reduce their income tax bills. Dettori has been in dispute with HMRC since 2019 over his tax obligations and has earned nearly £160m in his career. Although he initially sought to keep his identity secret, Mr Justice Mills ruled against his application, stating that he failed to justify the need for privacy against the press’s right to open justice. Mr Dettori said that he had been told the structure he used was approved by HMRC, adding that new advisers “are working hard to unravel the mess that I have been put in.”
Massive payday for claims firms ahead
The recent court ruling regarding undisclosed commissions in car loans has sent shockwaves through the motor lending industry, with potential compensation claims reaching up to £30bn. The Financing and Leasing Association’s annual convention last month highlighted the anxiety among lenders, as the ruling could lead to a surge in claims not only for car loans but also for other consumer finance sectors. Darren Smith, managing director of Courmacs Legal, said: “We are seeing increased interest from external investors who wish to be involved in these claims.” The Financial Conduct Authority is now proposing to extend the deadline for lenders to respond to complaints, but the legal obligations remain.
Latest Insolvencies
Appointment of Administrator – PELTA MEDICAL PAPERS LTD.
Appointment of Administrator – TIME GB (BRECON) LIMITED
Appointment of Administrator – WMPROP GROUP NO 1 LIMITED
Appointment of Liquidators – AURA FERTILITY LTD
Appointment of Liquidators – FOSROC EXPANDITE LIMITED
Appointment of Liquidators – MDL ROUNDHOUSE CONSTRUCTION LIMITED
Appointment of Liquidators – STROUD GREEN LAUNDERETTE LIMITED
Appointment of Liquidators – TOWD POINT MORTGAGE FUNDING 2019 – GRANITE4 PLC
Appointment of Liquidators – OIAX LIMITED
Appointment of Liquidators – BP WEST ARU I LIMITED
Appointment of Liquidators – WOSCO RESEARCH LIMITED
Appointment of Liquidators – PETROLEUM TECHNOLOGY COMPANY (UK) LIMITED
Appointment of Liquidators – DUNCANSBY TIDAL POWER LIMITED
Appointment of Liquidators – LONSDALE MILLER LIMITED
Appointment of Liquidators – ZPC CAPITAL LIMITED
Appointment of Liquidators – WASTE HOLDINGS LIMITED
Appointment of Liquidators – COCONUT LIZARD LTD
Appointment of Liquidators – SPOV LIMITED
Appointment of Liquidators – CORD WORLDWIDE LTD
Appointment of Liquidators – DUNLOP CONVEYOR BELTING INVESTMENTS LIMITED
Appointment of Liquidators – BNP PARIBAS NET LIMITED
Appointment of Liquidators – CFSIM LIMITED
Petitions to wind up (Companies) – M3 BUILD LTD
Appointment of Liquidators – REGSPEC LTD
Petitions to wind up (Companies) – LONDON PROJECT CONSTRUCTION CONTRACTS LIMITED
Petitions to wind up (Companies) – KENT & SONS GRAB SERVICES LTD
Petitions to wind up (Companies) – NORTHERN DRYLINING LIMITED
Petitions to wind up (Companies) – CUSTOS GROUP LIMITED
Petitions to wind up (Companies) – SB COMPONENTS LTD
Petitions to wind up (Companies) – EZ TEAMSPORTS LIMITED
Appointment of Administrator – RONNAN CORPORATION (ENERGY) LTD
Appointment of Liquidators – ATKINSR?ALIS BROOMCO LIMITED
Appointment of Liquidators – IGNITE MUSIC & ENTERTAINMENT LIMITED
Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!
If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA’s collection department for purchase on recourse?
CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.
Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.
Just call 020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
Discover NOW the potential value of late payment compensation hidden in your sales ledger!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.