Business news 18 July 2024
Disappointing Kings Speech for small business. Inflation, private equity, workers rights, house prices, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Disappointing Kings Speech for small business
The Labour Government’s first King Speech was disappointing for small businesses. There was no mention at all of support for small business, no mention of the late payment culture or any measures to tackle late payment. No mention indeed of any support for small business owners who are struggling in this high interest, high tax, low growth environment. There was talk of measures in the building industry which will benefit the big players and there was more promise of bureaucracy around employment that will further hit small businesses. There was also no mention of Business Rates reform and added employment burdens that will hit SMEs.
If you are worried about late payments, talk to CPA about how we are using existing legislation to combat this problem. For over 100 years we have been tackling late payers for our SME members while maintaining goodwill.
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.
Trade groups agree new policies ‘fall short’ for small business
Policy announcements in the new Government’s first King’s Speech “fell short” in supporting small firms across the UK to help drive economic growth, according to business groups.
Industry leaders said challenges facing small businesses were largely “overlooked,” with Tina McKenzie, policy chair of the Federation of Small Businesses (FSB), saying the announcements “fell short on the central challenge – getting growth back into the economy and ensuring wealth creation in every local community.” She added that apart from planning reform, “there was no sign of delivery of the small business plan promised by Labour in opposition.”
Bea Montoya, UK chief operating officer at Simply Business, commented: “The King’s Speech offered an opportunity for the new Government to deliver help for the UK’s five million small businesses and build on the pre-election signals to ‘pull up the shutters’ for Britain’s entrepreneurs.” However, she added, “it’s hard to detect much positive news for SMEs within the outlined proposals.”
Labour has previously indicated it would look to introduce legislation to address late payment of firms, an issue which has been heavily highlighted in recent years by CPA and across the small business community but there was nothing in the King’s speech.
However, there are a couple of possibly beneficial proposed bits of Legislation
The Arbitration Bill
This bill is aiming “support more efficient dispute resolution, attract international legal business, and promote UK economic growth”. While this appears to be focused on the international legal market and disputes between multinationals, there may be some benefit for simplifying the resolution of small business disputes although comments we have seen from legal experts don’t give us much cause for hope.
Audit Reform and Corporate Governance Bill
While the details are yet to be seen, CPA welcomes the Government’s announcement of draft legislation in the new parliamentary session to modernise the regulators powers and strengthen the transparency and integrity of the UK’s corporate governance, financial reporting and audit.
The announced reforms will see the creation of a more powerful watchdog. The Audit Reform and Corporate Governance Bill unveiled in the King’s Speech will pave the way for the Audit, Reporting and Governance Authority (ARGA) to replace the Financial Reporting Council (FRC). The Bill will look to ensure more robust and rigorous scrutiny of large companies by auditors and will also see all directors of large companies face sanctions if they fail in their financial reporting duties. King Charles said the reforms will “strengthen audit and corporate governance.”
FRC chief executive Richard Moriarty welcomed the draft legislation, saying there are “serious gaps in the regulatory toolkit.” He added that the reform plans build on the FRC’s “transformation in recent years into a more robust and effective regulator and its remit to support the UK’s economic growth and international competitiveness.”
Alan Vallance, chief executive of the ICAEW, commented: “Establishing the new statutory regulator – the ARGA – and providing it with powers to take effective enforcement action against directors of UK public interest entities, is a crucial part of these reforms.” Gavin Hayes, head of policy and public affairs at the CIIA, added: “Ensuring the audit regulator has the legal powers it needs to do its job effectively is vital to restore trust in the audit and corporate governance system.”
Andrew Howell of law firm Taylor Wessing said corporate governance reform is “long overdue,” adding that the “key will be in the detail, and how the government balances oversight of corporate conduct and proportionate audit reform without bringing in excessive red tape.”
Much of the proposed changes were planned following the collapse of Carillion 6 years ago. changes over which the Tories dithered. However the reforms seem focused on larger and international businesses, so are likely to do little to tackle the wide spread fraud we at CPA see of bogus companies filing fraudulent accounting statements to obtain elevated credit ratings and thus defraud honest SME suppliers into providing goods the con-artists have no intention of paying for. While we suspect the legislation is unlikely to have any impact on fraud, lets wait and see.
Inflation steady at 2% in June
UK inflation held steady in June, with the latest figures from the Office for National Statistics (ONS) showing price growth remained at the Bank of England’s target rate of 2%. Core inflation – which excludes the price of fuel and food – remained at 3.5%. Inflation in the services sector, an area closely watched by the Bank of England, remained steady at 5.7%. With inflation not coming down from May’s reading, analysts say an August interest rate cut is now less likely. Financial markets reduced their forecasts for the likelihood of an August cut from a 50% to 35%. Reflecting on the ONS data, Ian Stewart, chief economist at Deloitte, said: “Headline inflation is in retreat and is running well below rates in the US and the euro area.” Looking ahead, Yael Selfin, chief UK economist at KPMG, said: “Our latest analysis sees UK inflation potentially rising to a high of 3% before the end of the year.”
Wage growth
UK wage growth slipped below 6% to 5.7% for the first time in 20 months, while unemployment held at 4.4%, the highest rate since 2021. But with inflation at 2% real wages are rising.
Markets
Yesterday, the FTSE 100 closed up 0.28% yesterday at 8187.46 and the Euro Stoxx 50 closed down 1.14% at 4891.46.
Overnight in the US the S&P 500 fell 1.39% to 5588.27 and the NASDAQ sunk 2.77% to 17996.93 as traders jumped out of tech stocks in response to Bidens threat of more sanctions on the chips trade with China with Nvidia, AMD and Broadcom leading the fall.
This morning on currencies, the pound is currently worth $1.30 and €1.188. On Commodities, Oil (Brent) is at $85.40 & Gold is at $2470. With stock markets, the FTSE 100 is up 0.67% at 8241 and the Eurostoxx 50 is down 0.16% at 4883.
Private equity investment falls
UK private equity investment dipped 20% in the first half of 2024, according to data from KPMG. The analysis shows that 656 deals were completed in the first six months of the year. Mid-market deals saw a shallower decline, dropping 11% to 321 deals. Alex Hartley, head of private equity within corporate finance at KPMG UK, said that despite the slow start to 2024, the firm is optimistic that “with greater economic and political stability, there are strong fundamentals for the M&A market to return to healthier levels of activity.”
Workers get right to flexible working from day one
The Government has announced an overhaul of employment rights that will mean staff are entitled to flexible hours from the first day in their job. The Employment Rights Bill outlines reforms including: a ban on exploitative zero-hour contracts; giving workers reasonable notice of any changes in their shifts; compensation for cancelled or reduced shifts; an end to “fire and rehire” practices; parental leave, sick pay and protection from unfair dismissal available from day one on the job; removal of the lower earnings limit for statutory sick pay; and a ban on dismissing women who are within six months of returning to work after having a baby. Gary Smith, general secretary of the GMB union, said the Bill “contains much that will make a big difference to the lives of working people.”
However, Tina McKenzie, policy chair of the Federation of Small Businesses, said many small employers “are concerned about the prospect of increased costs and risks when they employ people,” adding that the Bill offers “no commitments … to look after small employers who will struggle the most.”
OBR granted new powers
The Office for Budget Responsibility (OBR) will have new powers to oversee and assess major Government spending changes. A Bill introduced by Labour aims to prevent significant uncosted measures from being announced without sufficient scrutiny to mitigate the impact on public finances. The Bill requires ministers to consult the OBR before making major tax and spending changes. The OBR will have the power to scrutinise any significant and permanent changes, as well as publish a financial forecast relating to them.
Denton plots Body Shop rescue
Charles Denton, the former CEO of Molton Brown, is set to lead a rescue takeover of The Body Shop. The high street cosmetics chain went into administration in February, but a consortium led by investment platform Aurea Group has now reached an exclusivity agreement with administrators at FRP Advisory. The deal is seen as the best outcome for creditors and will ensure the long-term success of The Body Shop. The transaction is expected to be completed in the coming weeks, pending due diligence checks.
Royal Mail
Royal Mail’s owners, International Distributions Services posted total revenue of £3.26 billion for the three months to June 3, up 8.2% from £3.01 billion a year prior. The firm noted an improved performance for Royal Mail, with the postal service’s volume of total parcels up 11% to 315 million from 283 million a year prior, as it noted a 50% jump in the deliveries of postal vote returns for the 2024 general election compared to the 2019 election.
Frasers
Frasers celebrated a “break-out year” for building future growth, after posting adjusted pretax profit of £544.8 million for the twelve months ended April 28, up 13% from £481.8 million a year prior. This result, Frasers reflected, was at the top of its guidance range. Meanwhile, pretax profit from continuing operations fell 21% to £507.0 million from £638.0 million, while revenue fell 0.9% to £5.54 billion from £5.59 billion.
House prices rise 2.2% in May
Office for National Statistics data shows that average UK house prices climbed by 2.2% to £285,000 in the 12 months to May. The increase marks the third consecutive month where prices have risen and the rate of growth is the highest since July 2022.
Latest Insolvencies
Appointment of Liquidator
ETM CONSULTING LIMITED
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GEYERWORKS LTD
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AMPHORA INTERMEDIATE I LIMITED
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MCCANN CONSULTANTS LIMITED
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SCIROCCO ENERGY LIMITED
LAYCOCK AND GERRARD LIMITED
LEYTON UK PARTNERS LLP
DINNER TIME PET FOODS LIMITED
SHEDDEN ASSOCIATES LIMITED
JAMBAR CONSULTANCY LTD
TRUSK 2010 LIMITED
SOVEREIGN CLINICS LIMITED
TOTALUNIQUE LIMITED
SUNTOP BOARDING KENNELS AND CATTERY LTD
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EVA ACTUARIAL & ACCOUNTING CONSULTANTS LIMITED
COOLGAME (UK) LTD
BETR TECHNOLOGY LTD
SCHLEE AND COMPANY LTD
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P W REGINALD LIMITED
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LONGPONT LTD
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WEISMULLER & COMPANY LIMITED
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PAI UK GENERAL PARTNER LIMITED
W.E.NORTON(MACHINE TOOLS)LIMITED
HADOVER LIMITED
ANSTEY HOMES LTD
A.KITCHEN – D.WALKER LIMITED
IGROUP UK LOANS LIMITED
U-STORE UK LTD.
CHOICESTEADY HOLDINGS LIMITED
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AMPHORA GROUP LIMITED
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PINKLYNX LTD
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PARAMOUNT D&B LTD
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VIOLET DEVELOPMENTS LLP
LANSGROVE LIMITED
Winding Up Petitions
SHERIDAN BUSINESS AND TRADING CENTRE LIMITED
RHEINTACHO UK LTD
13374171190324 LTD
ACCOUNTANT4ALL LTD
OXFORD R Z LTD
1 CHARLES STREET LIMITED
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SUPREME CLASS LIMITED
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LAILA AND DENIZ (HEREFORD) LTD
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MALT PROJECTS LIMITED
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PANIRY SOLUTIONS LTD
BLACK MIRE LTD
TAZ TRADE LTD
FASHION FRONTIERS LTD
O.J & SONS LTD
SL ENTERPRISES LTD
20/21 ART FAIR LIMITED
BEXLEYHEATH RESTAURANTS LTD
THE EEL SCREEN COMPANY LTD.
UK CAPITAL RESERVE LIMITED
LINCOLN’S PROPERTY SERVICES LTD
STRAND ACCOUNTING SERVICES LIMITED
BOXCAR EVENT PRODUCTIONS LIMITED
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NETWORKS FOR GOOD LIMITED
URBAN RETAILING LTD
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REDTHUNDERBOLT LONDON LIMITED
PSYNERGIA PLC
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ENSTATIC LIMITED
THE BOXING HOUSE NUMBER THREE LIMITED
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Why should you become a CPA member!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have seen many financial crises, this last one was particularly deadly for suppliers fand we are still seeing elevated insolvencies as businesses struggle.
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.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!
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 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.