Business news 29 April 2022

James Salmon, Operations Director.

Business insolvencies jump to highest in 10 years. 19% rise in companies in critical financial distress. London sees 94% jump in start-ups. Small businesses struggle to fill vacancies. Staff seek pay rises as cost of living climbs.  FTSE bosses flag inflation fears.  And more business news.

Business insolvencies jump to highest in 10 years.

Insolvency Service figures show that there were 4,896 company insolvencies in England and Wales in Q1, the highest total since 2012.

This was driven by a 117% jump in voluntary liquidations. There were 4,274 creditors’ voluntary liquidations in the three months, the most since 1960.

The number of individual insolvencies in England and Wales was 14% higher than a year earlier, at 32,305, the highest quarter since Q4 of 2018 when there were 33,768.

Samantha Keen at EY-Parthenon commented: “It’s likely we’ll see further waves of insolvencies among larger businesses as the impact of rising costs affects their bottom line.” She added: “Businesses in sectors most affected by fluctuations in cost and supply chain pressures and changes in business confidence, such as retail, food producers, and high energy users – such as chemical and paper manufacturers – are likely to be most vulnerable.”

19% rise in companies in critical financial distress.

Meanwhile, Begbies Traynor, reported a 19% rise in businesses in critical financial distress compared to the start of 2021. It’s “Red Flag Alert” research reflected the strain two years of extraordinary financial pressures have had on thousands of companies. It said 1,891 firms were now in  critical financial distress

Begbies Traynor’s research highlights a sharp rise in County Court Judgements (CCJs), an early sign of future insolvencies, because they show creditors are making legal claims. CCJs were up 157% compared to a year ago, the report said.

Construction and hospitality are the sectors struggling most, according to insolvency firm Begbies Traynor.

London sees 94% jump in start-ups.

A record 18,549 tech businesses were incorporated in London in 2021, a 94% increase on the 9,572 recorded in 2020.

Analysis by RSM UK shows that London accounted for 49% of all new tech businesses in the UK last year. Overall, UK tech incorporations increased 62% in 2021, from 23,579 to 38,240.

David Blacher, RSM’s head of media and technology, noted the “unprecedented level of tech incorporations,” and commented: “London saw the biggest take-up, but to be seeing incorporations increasing by between 40 – 60% in regions throughout the UK is very encouraging.” Analysis shows that the UK tech sector this year became only the third economy to reach $1trn in value, alongside the US and China.

Small businesses struggle to fill vacancies.

Analysis by accounting service Xero suggests that a difficult jobs market is holding small businesses back, with 7.4% fewer people working in small firms than there were in February 2020.

Alexander von Schirmeister, UK managing director at Xero, said: “Small businesses are very worried about finding people … It’s getting really, really tough and it’s putting these businesses under pressure.” He added that “even when the growth opportunities are there they can’t leverage them because they just don’t have the internal labour to satisfy the demand that’s coming their way.”

Meanwhile, Xero also found that revenues at small businesses rose 13.5% in March but remain behind pre-pandemic levels. The increase partly reflects higher prices being charged by small businesses, alongside rising orders.

Staff seek pay rises as cost of living climbs.

Workers are set to call for pay rises amid a tightening cost of living squeeze, with analysis by the ADP Research Institute suggesting that employers that fail to meet demands for higher wages may struggle to retain and attract talent.

The research shows that one in two workers expect their employer to increase their wages this year, with most staff ranking pay as the leading factor that attracts them to a job.

Sirsha Halder, general manager UK and Ireland at ADP, commented: “Pay is an even more pressing issue than normal right now and it is likely to remain so for the foreseeable future, with a clear knock-on effect on recruitment and retention.” The ADP Research Institute’s People at Work 2022: A Global Workforce View report, which surveyed around 33,000 workers in 17 countries, also found that around four in 10 workers cite flexibility as the most important factor when it comes to a role.

FTSE bosses flag inflation fears.

The bosses of several leading companies have voiced concern over rising prices and the possibility of inflation hitting double figures.

George Weston, the boss of Primark owner Associated British Foods, said: “We are dealing with really substantial inflation in all our businesses. It is different from 2008 inflation, I think we are back in the 70s.”

Unilever chief executive Alan Jope described the inflationary environment as “challenging,” while Premier Inn owner Whitbread said it expects the hotel industry to see costs rise by as much as 9% this year.

Sainsbury’s chief executive Simon Roberts said the chain is looking to keep prices down as it is aware “just how much everyone is feeling the impact of inflation.” He added: “We can see the early signs of customers being a bit more cautious, watching every penny, every pound.”

Barclays boss CS Venkatakrishnan said customers including small business and corporate clients “are facing far harder conditions this year as a result of inflation, supply chain issues and higher energy costs.”

Consultancy Capital Economics estimates that inflation is likely to peak at 10% in October.

US Economy.

The US economy unexpectedly contracted 1.4% while economists were predicting a 1.1% rise. The fall was put down to a record trade deficit.


NatWest enjoyed profits doubling in the last three months, due to a rise in interest rates. Operating profits before tax rose to £1.2bn in the first three months of 2022, this is compared to £573mn in the final three months of last year. Uncertain economic and business conditions remain a looming threat to the business this coming year. It stated “We are also very aware of the challenges and concerns the cost-of-living crisis is causing for for of our customers up and down he country”.

Travis Perkins

Travis Perkins released a statement overnight stating increase demand in infrastructure and housing encouraged sales to jump 13% for the first three months of the year. However it warned investors of increased uncertainty regarding the impact inflation will have on its raw materials business. Britain’s biggest seller of building materials reported total sales for its first fiscal quarter up 13.6% on last years results.

Reckitt Benckiser

Reckitt Benckiser the consumer goods company saw its like-for-like revenues grow in Q1 by 5.6% to £3.42bn. Its nutrition’s and health revenues were up 20.4% and 20.6% subsequently. The firm expects revenue growth to continue despite “significant cost inflation”. Forecasting adjusted operating margins to be in line with last years expectations.


AstraZeneca has said it expects revenue from its Covid-19 vaccine to fall by a fifth this upcoming year. The vaccine recorded £920m in sales in the first quarter of the year. Its new drug treatment used by Covid patients with poor immune responses ‘Evusheld’ is expected to at least partially offset loss. Core earnings per share at $1.89, were higher than the forecasted $1.70 year-on-year, with revenues soaring 60% to $11.4bn.


Elon Musk has sold $4 billion in Tesla shares in a move that looks like it was to support the completion of his purchase of Twitter.


Apple has said that supply constraints are going to hit revenues to the tune of $4 to $8billion, sending shares down. Revenue increased 9% year on year to $97.3bn  but shares fell on the forward guidance.


Amazon has posted its first quarterly  loss in 7 years as sales dropped 3% as it referred to both the end of the pandemic and supply constraints. The company posted a loss of $3.8billion, most of which was due to the investment in electric vehicle company, Rivian which took a $7.6 billion hit. They also projected slow growth in Q2. Shares were down around 10%.


Whitbread reported a swing to annual profit, on a strong recovery from the worst of the pandemic, with the Premier Inn owner also reinstating its payout. The Dunstable-based hotel and restaurant group swung to a pretax profit of £58.2 million in the year to March 3, from a loss of £1.01 billion a year earlier. This was on revenue that more than doubled to £1.70 billion from £589.4 million.

Weir Group

Weir Group posted a record quarter, with group orders on the up, though it expects to see a profit hit as it winds down its operations in Russia. Group orders in the first quarter of 2022 were up 15% compared to a year ago. The engineering company said it saw a ‘very strong demand for aftermarket’ and ‘good progress on strategic growth initiatives’

House prices could fall 5% in two years.

UK house prices could fall nearly 5% in the next two years according to Capital Economics, having climbed almost 20% since the start of the pandemic. While it predicts that house prices will rise 9% in 2022, analysts say values will slip by 4.8% by the end of 2024, with a 3% decline predicted for 2023 and a further 1.8% fall in 2024. Capital Economics says rising inflation and a sharp rise in mortgage rates will drive the fall in prices, predicting that the average mortgage rate, which is currently 1.8%, will double to 3.6% during 2023.

Davey: Households hit by ‘unfair’ tax rises.

Liberal Democrat leader Sir Ed Davey warns that Londoners are facing a “cost-of-living emergency” and suggests that ministers are “doing nothing to help” but are instead “adding to the pain with their unfair tax rises.” He says the 1.25% National Insurance increase has cost London and the South-East £520m this month alone, while freezing tax thresholds is a “stealth tax” that will “drag” 630,000 low-earners across the region into paying income tax and push another 750,000 middle-earners into the higher 40p tax bracket. Calling for a “big tax cut to put money back into people’s pockets,” Sir Ed says the Lib Dems are calling for an emergency VAT cut, saying this would save struggling families £600 each this year and boost consumer spending.

Downing Street does not rule out windfall tax

Number 10 has refused to rule out a windfall tax on large energy firms if they fail to invest to boost Britain’s supplies, despite having rejected Labour’s call for such a levy that could pull in money to help ease the cost-of-living crisis. On a windfall tax, the Prime Minister’s official spokesman said ministers have “set out we don’t think this particular approach is the right one,” but added that it is “right that we keep all options on the table.” Insisting that “these companies must step up to invest,” the Downing Street spokesman added “we will want to work with them to do that … We think that is the best approach and we will continue to discuss with them how to achieve that.” This comes a day after Chancellor Rishi Sunak signalled that the Government could be prepared to rethink its previous opposition to such a levy, saying that he would consider a windfall tax if energy firms fail to invest in the UK, saying that “nothing is ever off the table in these things.” Mr Sunak’s comments came on the same day that Deputy Prime Minister Dominic Raab warned that Labour’s proposal of a windfall tax would be “disastrous” and damaging to investment. Labour’s Ed Miliband commented: “As energy prices for families rocket, Rishi Sunak’s words show that the Government is simply running out of excuses to oppose a windfall tax on oil and gas companies.”

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.