Start-ups on the rise -business news 21 July 2021
James Salmon, Operations Director.
Start-ups on the rise, PM urged to expand ‘pingdemic’ exemptions, Inflation more dangerous than Delta variant, Government debt, Supermarket Sales and more business news.
Start-ups on the rise
The number of start-ups launched in the UK rose by 14% in the last year despite the impact of the pandemic, outpacing the global average of a 6% increase in new businesses.
A study by UHY Hacker Young shows that there were 726,000 new businesses created in the UK in 2020 compared to just over 636,000 in 2019.
Data from HMRC also shows that in March 2021 more new businesses were created than in any other month since records began in 1989.
Martin Jones, partner at the firm, said: “Entrepreneurs in the UK have really used the pandemic and lock-downs as a springboard to start businesses. It’s exciting to see British people find the positive in the last 18 months. The entrepreneurial spirit in the UK is undimmed.”
PM urged to expand ‘pingdemic’ exemptions
Downing Street has insisted self-isolation is key to stopping the spread of Covid after two business ministers told the public self-isolation when pinged by the NHS Test and Trace app was a choice and not imposed by law. Lord Grimstone, the investment minister, called the app an “advisory tool” with no “legal” force in a letter to a large employer which leaked. Business leaders have said the system is causing chaos with so many members of staff isolating after being “pinged” by the app. People have to self-isolate for 10 days even if they’ve been double jabbed and negative COVID-19 tests do not lead to release. Mr Johnson announced on Monday that a “very small number” of named individuals from sectors that are critical to national infrastructure would be able to apply for an exemption, but no list of “critical workers” will be published.
Inflation more dangerous than Delta variant
Ambrose Evans-Pritchard asserts in the Telegraph that Monday’s stock sell-off and rush into safe-haven bonds was not driven by a surge in Covid cases but a recognition that inflation is overshooting central bank forecasts and policymakers will over-tighten to compensate. Evans-Pritchard says a report from the House of Lords last week is key to understanding the issue. Peers on the Economic Affairs Committee implicitly accused Bank of England Governor Andrew Bailey and fellow rate-setters of “falling captive to political masters, letting rip on inflation, and playing fast and loose with the credibility of British monetary management.” Now the Bank is finally tacking hard, with a variant of this hawkish turn also underway in the US, but if the Bank of England, the Fed, and their peers do not “lance the QE boil now, they probably never will” Evans-Pritchard continues. “Inflation will be allowed to take hold and the world will be back to the 1970s. Markets are having great difficulty deciding which of these two outcomes is more likely.”
Government debt
UK Government Borrowing fell over the last month as the economy rapidly rebounds from the damage inflected by the covid-19 pandemic. The government borrowed £22.8bn last month, the second-highest figure for June borrowing since records began, according to the Office for National Statistics. However, borrowing eased from May, down from £24.3bn and significantly over the last year – the government borrowed £5.5bn more in June 2020.
Supermarket Sales
Supermarket Sales have fallen in recent weeks as lockdown restrictions eased, data from Kantar showed on Tuesday, though football helped to cushion a return to more normal retailing trends. According to Kantar, take-home grocery sales in the UK fell 5.1% year-on-year to £30.01 billion in the 12 weeks to July 11. However, shoppers still spent £3 billion more on groceries compared with the same period in 2019.
Next
Next upgraded annual profit guidance and said it would pay special dividends, having enjoyed a stronger-than-expected sales performance so far in the second quarter. Pre-tax profit for the year through Jan, on a pre-IFRS 16 basis, was now expected at £750 million at the ‘central’ guidance level, up from previous guidance given in May of £720 million.
Wickes
Wickes, the DIY chain recently spun out of Travis Perkins, said its first-half sales had risen 33% year-on-year and stuck to its profit guidance.Adjusted pre-tax profit for the six months through 26 June was still expected to be around £45 million.
Treasury announces self-employed tax overhaul
Freelancers and small businesses will benefit from an overhaul of tax reporting rules, the Treasury said as it revealed changes that will see self-employed profits taxed in line with other forms of income, such as property and investment income. Under the current system, tax returns filed by the self-employed, sole traders and partnerships are based on a business’s set of accounts ending in the tax year (April 5). HM Treasury said the current rules create confusion leading to thousands of mistakes in tax returns. The changes, which will come into force by 2023, will mean businesses will be taxed on profits arising in a tax year, rather than profits of accounts ending in the tax year.
Fever-Tree
Fever-Tree Drinks lifted its annual revenue guidance following a strong start to the year, though said supply-chain woes would pressure margins.The full-year outlook on revenue was increased to a range of £295 million to £304 million.
Begbies Traynor
The fall (or delay) in insolvencies during the pandemic has hit insolvency specialist Begbies Traynor, who reported a fall in profit, but raised its dividend as results were ahead of original expectations due to acquisitions and improved trading. For the year ended 30 April, pre-tax profit fell to £1.9 million from £2.9 million year-on-year, while revenue improved to £83.8 million from £70.5 million. Adjusted profit before tax increased by 25% to £11.5m.
Commenting on the results, Ric Traynor, Executive Chairman of Begbies Traynor Group, said: “Overall, the group is in a very strong position as we start our new financial year. The four acquisitions we have completed since the beginning of 2021 have significantly increased the scale of the group and its capabilities, enhancing the support and advice we provide to UK businesses. With the benefit of our recent acquisitions, our organic growth and future acquisition opportunities, we are well positioned to deliver the anticipated material growth in earnings in the new financial year.” Begbies Traynor predicts that the end of government support schemes, which also insulated firms from Brexit, will lead to a wave of companies going bust latest this year, bringing more business to the firm.
Netflix
As the number of subscribers reaches saturation point in its home market, the number of Netflix subscribers in America and Canada fell by 430,000 in the second quarter of this year.Thanks to overseas growth, it added 1.5m subscribers – which is 85% down on its pandemic-peak growth rate . Lock-down in the first half of 2020 prompted some 25m people to open accounts. As lock down eases, that growth rate has tumbled.
Bezos goes out of this world.
The Amazon founder successfully completed the Blue Origin flight into space. . In a flight that lasted just ten minutes, the New Shepard rocket-plane reached 62 miles above the Earth’s surface. The four occupants, which included Mr Bezos’s brother, an 18 year old dutch teen and an 82-year-old space-flight pioneer, experienced several moments of weightlessness during the journey.
Working class men lose out to women in the boardroom
A Financial Reporting Council report on diversity in FTSE 350 firms, conducted with the London Business School, suggests the increasing number of women in boardrooms is being achieved by appointing women with high socio-economic status in place of men with a lower socio-economic status. The watchdog said it could not yet confirm the supposition, but added that there is an opportunity to “investigate to what extent one type of diversity is being traded for another inside boardrooms”. However, there was enough data to prove that greater representation of women in the boardroom is reshaping culture and dynamics and benefiting businesses from a social justice as well as a performance perspective. Sir John Thompson, chief executive of the FRC, said: “I want to see boards invest time and energy in making diverse appointments not to achieve a target but because it will have a positive impact on their business.” He continued: “The UK Corporate Governance Code makes it clear that board appointments should promote diversity and we want to see nominations committees reporting on progress.”
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 one will be particularly deadly for suppliers for some time to come.
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 charge our members a fixed annual subscription irrespective of how high the debt value is!
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.
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
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.