UK Car production slumps – business news 28 January 2021.
James Salmon, Operations Director.
UK Car production slumps, warning over removing covid support, the number of empty shops soars, Singapore-on-Thames dream dismissed, covid-19, market and other business news.
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.
UK car production slumps to lowest level since 1984
Figures from the Society of Motor Manufacturers and Traders have revealed that output from UK car plants fell by 29% last year to 920,908, the first time the industry has dropped below the 1m mark since 2009. Mike Hawes, chief executive of the SMMT, said the drop in car output meant the industry lost about £10.5bn in revenues compared with 2019. The drop also had a major effect on workers, with at least 10,000 car industry jobs lost during the year. Hawes added that the headline total may be an “iceberg”, with a significant number of redundancies hidden from view in supply chains where smaller companies have had little choice but to cut back. He also said that since Brexit, sourcing parts from outside the EU, moving staff across the Channel, and gaining safety approvals for different models have all become more difficult.
Sunak warned over withdrawing Covid support
A London School of Economics-led study warns that some 900,000 small businesses, employing 2.5m workers, are at risk of going bust if COVID-19 rescue schemes are wound up. “Without further policy action, businesses face a cruel spring of bankruptcy,” said Professor John Van Reenen, of the LSE’s Centre for Economic Performance.
Number of empty shops soars
The Royal Institution of Chartered Surveyors’ quarterly survey reveals that the number of empty shops and offices in Britain increased at the fastest pace since the survey began 30 years ago during Q4 last year. Industrial property, which has been boosted by the demand for storage space from online retailers, was the only sector to record positive results.
The Royal Institution of Chartered Surveyors (RICS) said its quarterly commercial property survey showed a swing in demand towards industrial space, such as warehouses to service booming online shopping, and away from traditional retail and offices.
“Both the office and retail sectors continue to see occupier and investor demand diminish, with expectations for rents and capital values remaining deeply negative for the time being,” RICS economist Tarrant Parsons said.
Surveyors do not expect any rise in office or retail rents for the next year at least.
Singapore ? style Britain dismissed as fantasy
The idea that Britain could be transformed into a deregulated low tax Singapore-style country is a fantasy, experts have told the Times. The phrase “Singapore-on-Thames” was coined by former chancellor Philip Hammond and has been resurrected as the “Singapore of Europe” by Boris Johnson. But the CBI, the Institute of Directors and the British Chambers of Commerce all told the paper there is no desire from business for mass deregulation while Richard Asquith, vice-president of global tax at Avalara, said the UK’s balance sheet was shot and that it would be 20 years before Britain could contemplate the idea. Asquith went on to say that Brexit will not result in big changes to the UK’s tax regime. The UK already had “huge freedoms to create a low-tax jurisdiction” and the UK is unlikely to cut VAT – the primary tax the EU could directly influence – as it accounts for almost a third of revenues.
Big Tech tax debate threatens trade war
The Independent talks to experts about international talks on taxing Big Tech and the challenge the debate might post to the new US administration. The paper says the pandemic has only highlighted the issue of digital taxation with the outbreak accelerating digitalization through remote work and contact-less activities, and in some cases bringing strong profits for digital companies; meanwhile, government budgets have been put under strain through added spending and less tax revenue. Manal Corwin, a tax principal at KPMG and a former Obama administration Treasury official, said that digital taxes multiplying outside the OECD process “are threatening to trigger a trade war.” Barbara Angus, global tax policy leader for EY, adds that the question of exactly whom the new digital tax applies to was “the single biggest political issue to be resolved” in the talks.
Sunak prepares Tory MPs for tax rises
The Chancellor has told Conservative MPs that if taxes are raised in the near future then the Government will be in a better position to reduce them ahead of the next election. Speaking with the 1922 committee of backbench Conservatives on Wednesday, Rishi Sunak signaled that difficult decisions lie ahead on raising revenue and reducing the deficit. MPs told the Telegraph they now expect Mr Sunak to set out a detailed roadmap on his strategy for spending, tax rises, the deficit and other economic levers at the budget.
Covid-19 general news
There were 25,308 new cases in the UK yesterday (3.72m total) with 1,725 more deaths bringing the total above 102k.
Globally 589,484 new cases brought the total to 100.8 million with 2,174,487 deaths.
82.5m vaccines does have now been given globally.
England’s third national lock-down will be extended until at least 8 March, the Prime Minister has announced, as ministers ramp up plans to get the nation vaccinated before easing restrictions. Speaking in the Commons, Boris Johnson said schools in England will also stay closed until the spring, rather than mid-February as originally planned.
The lock-down in England is showing some signs of starting to curb the spread of the virus, the Financial Times reported, citing the React-1 study, led by Imperial College London. The prevalence of the virus had started to flatten last week, though high infection rates will continue to strain the healthcare system, according to the report
The European Union continue to argue over their contract with AstraZeneca Plc after the British Pharma giant rejected demands that it take Covid-19 vaccine supplies from its U.K. factories to make up for a shortfall in doses in Europe following a production glitch in Europe.
Sanofi, a French drug firm whose own vaccine attempts have failed, will produce 125m doses of the Pfizer/BioNTech serum in an effort to speed the EU’s vaccination roll-out.
Pfizer Inc. and BioNTech SE said results of studies indicate their vaccine is effective against both the U.K. and South Africa variants
GlaxoSmithKline announced a collaboration with Eli Lilly & Co and California-based Vir Biotechnology Inc to evaluate a combination of two Covid-19 therapies in low-risk patients with a mild to moderate version of the disease
Mexican President Andres Manuel Lopez Obrador is resting and in isolation at the National Palace in Mexico City after testing positive for Covid-19
Aussie trade
The United Kingdom’s next free trade deal is set to be with Australia, with the agreement to provide a major boost for the UK’s telecoms sector. The deal could be completed as soon as March, with UK residents to benefit from cheaper Australian food and wine, while Stoke’s famous pottery manufacturers will benefit from lower export tariffs.
Markets.
Yesterday the FTSE 100 closed down 1.3% at 6567.37 as investors remained concerned about the ongoing global covid-19 situation and the slow vaccine roll out and revolution against short sellers drove up the price of heavily shorted stocks across the globe. And selling has continued this morning as the market is down a further 1.8% after the selloff continued in the US, despite Apple (who recorded its highest ever quarterly revenue) and Facebook both beating estimates in the latest quarterly filings. Overnight, the S&P 500 dropped -2.57% and the NASDAQ dropped -2.61%. Sterling is at 1.126 Euros and 1.364 US Dollars as the turn in risk sentiment is hitting commodity currencies and driving up so called safe havens. Brent Crude is at $55.4 and Gold is at $1840.
Federal Reserve Chair Jerome Powell made clear the U.S. central bank was nowhere near exiting massive support for the economy during the ongoing coronavirus pandemic, as officials left their benchmark interest rate unchanged near zero and flagged a moderating U.S. recovery
FRC and FCA issue joint statement for companies, auditors and users of financial accounts
The Financial Reporting Council (FRC) and the Financial Conduct Authority (FCA) have published updated guidance for companies and auditors to ensure high quality financial information continues to flow to users to support decision-making. The joint guidance encourages preparers and auditors to allow more time to publish their financial accounts, making use of available flexibilities. Along with these measures, the FRC and FCA strongly encourage investors, lenders and other users of financial statements to take into account the unique set of circumstances arising from COVID-19. Mark Babington, the FRC’s Executive Director of Regulatory Standards, said: “As the busiest period of the year for the preparation and audit of financial accounts approaches, it is paramount that investors and users of financial information continue to receive high quality financial information. While companies and auditors face increased challenges in preparing their accounts, the joint measures allow for additional time to ensure high quality reporting. Companies, auditors and investors should familiarise themselves with the latest guidance during these uncertain times to ensure they are managing reporting frameworks and stakeholder expectations appropriately.”
Results mixed for drinks companies
Drinks giant, Diageo said raised its interim dividend even as first-half profit and sales declined amid lower pandemic fueled sales from pubs and bars. For the six months ended 31 December, Reported net sales fell 4.5% during the second half of the year, while operating profit declined 8.3% to £2.2 billion.
Britvic reported a decline in first quarter revenue and said performance would continued to be affected by the pandemic-led sales weakness in its out-of-home division. In the first quarter, total revenue fell 9.8% to £328.1 million and was down 5.8%, when the the disposal of the French private label juice business was excluded
Fever-Tree meanwhile expects to beat revenue expectations for last year following strong supermarket sales of its soft drinks and mixers during the pandemic. The firm said this morning that total revenue for 2020 is expected to be £252.1m, ahead of guidance provided in September.
EasyJet
EasyJet reported a slump in first quarter revenue and said it expected second-quarter capacity of just 10% of the prior-year period as lock-downs continued to dent air travel activity. For the three months ended 31 December, revenue fell 88.4% to £165 million year-on-year as number of flights slumped 83.3% following an 87.1% reduction in the passengers.
FCA considers raising contactless payments limit again
New proposals being considered by the Financial Conduct Authority could see the limit for contactless payments raised still further to £100. A consultation on the move is to be launched, forming part of a more general consumer credit update. Consumers will have until the 31 January before firms are legally able to begin repossessing goods and vehicles, under the regulator’s rules.
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.
You put up with the PAIN – now claim the GAIN!
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.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
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 extra 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.