Inflation, skills shortages and cost of living crisis threaten business growth
Increasing energy bills or the overall rising costs of living are the biggest challenges facing almost half (47%) of businesses in the next six months, according to new research by accountancy and business advisory firm, BDO.
The bi-monthly survey of 500 leaders of medium-sized businesses reveals a third will increase the price of their goods and services in response to rising costs. Retail and wholesale businesses have been particularly hard hit, with 39% planning an increase in prices.
Meanwhile, rising costs mean almost a third (30%) of businesses are planning to reduce the number of goods and services they offer, as a result of these products becoming less profitable. 29% are switching to cheaper suppliers to reduce costs.
Warnings from the Office for Budget Responsibility that inflation could reach close to 9% in 2022 are also giving serious cause for concern, with almost two thirds of mid-sized business (59%) having only planned for an inflation rate of 3-5% this year.
As a direct result of rising inflation almost a third (31%) are seeking additional finance, rising to two-fifths (42%) of hospitality and leisure businesses and 36% for retail and wholesale – all industries that have already been hard hit by COVID-19. Even as analysts predict further hikes in interest rates, 29% of businesses are using new or existing overdraft facilities, with a quarter (24%) taking on higher levels of debt to ensure their survival.
Recruitment is another area that threatens to derail growth. More than a quarter of businesses (26%) said finding staff with the right skills is their biggest challenge over the next six months.
24% of businesses are most worried about the cost of hiring and with competition for talent fierce, a fifth (19%) see retaining employees as their biggest challenge this year. Almost a third (30%) are increasing wages in an effort to support staff through the cost-of-living crisis.
Ed Dwan, partner at BDO commented: “This is a deeply concerning time for the UK businesses, with inflation and global uncertainty all threatening to stifle the post-pandemic recovery.
“The large number of businesses taking on new or increased debt piles in a period of mounting inflation is testament to the challenges they face, and the hike in National Insurance this month could prove a tipping point for many in the midst of the cost-of-living crisis.
“These businesses are the engine of the economy and their concerns should not be overlooked. As part of its levelling-up agenda, the Government should consider introducing more targeted policies that encourage investment and drive growth for the UK’s medium-sized businesses.”
Newly-relaunched scheme aims to protect future of UK’s seafood sector
The Fisheries and Seafood Scheme has been relaunched to help support the long-term sustainability, resilience, and prosperity of the seafood sector across England.
Following the success of the scheme, which first opened last year, at least £6m in funding has been secured every year until April 2025, providing long term investment to the sector.
The scheme will continue to fund projects that boost business resilience and increase sustainability across our world-class fishing industry, further strengthening support for food producers across the catching, processing and aquaculture sectors.
This builds on the work of the first year of the scheme, which saw more than 500 projects approved for a range of seafood and marine businesses, charities and other organisations.
Improvements this year include simplified guidance, enhanced levels of funding for micro-entities and funding that is better targeted at the sector’s needs.
Regular reviews will ensure FaSS continues to evolve over the next three years to reflect feedback from across the sector, evolving policies and the needs of the industry.
The scheme will continue to be administered by the Marine Management Organisation on behalf of Defra. The MMO has a team ready to provide advice and support to potential applicants.
Fisheries Minister Victoria Prentis said:”The Fisheries and Seafood Scheme has already approved 500 projects for funding across our sector. Through the scheme, we are better able to target support and invest in projects that champion the seafood sector and support its long-term sustainability.
“We have expanded the scheme until 2025, providing a welcome boost for coastal communities around the country. I urge all eligible organisations to apply.
Tom McCormack, Chief Executive Officer of the MMO, said: “The MMO wants our fishing and seafood sectors to continue to develop, adapt and ultimately succeed as we move forward into our new era as an independent coastal state.“We look forward to working with applicants from across England and supporting our fishing and seafood communities through the continuation of the already successful Fisheries and Seafood Scheme.”
Defra and the MMO will continue to work with industry to provide financial assistance through the FaSS to deliver sustainable growth in the catching, processing and aquaculture sectors, boosting coastal businesses and communities. In addition, FaSS will also deliver some funding through more flexible calls for projects, based on specific policies. For projects which last less than a year, the MMO recommends that applicants aim to complete their project within the same financial year as application. To ensure long-term support is delivered to the sector, the FaSS will now also support multi-annual projects which can be completed up until the end of February 2025.- Further detail on the Fisheries and Seafood Scheme can be found on the scheme webpage.
Government pledges £20m to enhance facilities for HGV drivers
HGV drivers could benefit from a £20m to improve roadside facilities as part of continued government action with industry to boost driver welfare and tackle the effects of the global driver shortage in the UK.
The funding is part of National Highways’ existing £169m, and will go specifically towards improving security, showers and eating facilities as well as exploring increasing parking spaces for lorry drivers. Roadside service operators are being encouraged to apply for the multi-million-pound fund immediately.
The funding takes the total government investment in driver facilities to £52.5m since last year.
Roads Minister Baroness Vere said: “HGV drivers play a key role in keeping our nation running and contributing to the economy, and it is vital they feel safe and comfortable wherever they stop.
“That’s why we’re allocating £20m to ramp up security and improve amenities for drivers – building on the raft of measures we’ve already taken to support the industry. We’ll continue to work closely with the sector to boost professional driver numbers even further.”
Nick Harris, National Highways Chief Executive, said: “We want all road users to reach their destination safely and encourage everyone, from those who drive as a profession through to people traveling on holiday or for leisure purposes, to plan ahead before setting off and to take regular breaks.
“We are dedicated to improving the experience of everyone using our roads and remain committed to working closely with operators of roadside facilities to help improve the standard of parking and other amenities they provide on motorways and major A-roads. We are hopeful that the £20m being announced today will go some way towards achieving this goal.”
Olympus Print Group joins All4Labels Group
All4Labels Global Packaging Group, a leading international manufacturer of packaging solutions and digital printing, is continuing its global growth strategy through its acquisition of Olympus Print Group, one of the leading label manufacturers in the United Kingdom.
The company offers label solutions for a range of markets with a focus on the Personal Care as well as Wine & Spirits, and Beer industry. Olympus Print Group will become the first subsidiary of All4Labels in the UK. The former owners will become co-shareholders of the All4Labels Group and will continue to manage the business. Terms and conditions of the transaction were not disclosed.
“This transaction represents a new milestone for All4Labels as we will get access to the important and dynamic UK market with a strong partner who can cater existing and future customers with high-quality label solutions. The acquisition marks the beginning of our strategy to build a leading business unit in the United Kingdom through investments in organic and acquisitive growth. Along with our leadership team, I look forward to working with the Olympus Print Group team on our joint growth and success for many years to come.” highlights Adrian Tippenhauer, CEO All4Labels.
Steve Cartwright, Director at Olympus Print Group, states: “After 28 years of building the Olympus brand, we are proud of our reputation for technical expertise, high quality and strong focus on customer service. The decision to join a partnership with a global, like-minded and innovative packaging group was made easy as All4Labels shares the same strong values as Olympus Print Group. The full senior management team and employees look forward to working with All4Labels in the future.”
The new partnership with Olympus Print Group illustrates the fifth successful acquisition by the All4Labels Group within the last twelve months, underlining All4Labels sustainable investments into growth and expansion in a global context.
The transaction is subject to customary closing conditions.
‘Could have done better’, says NFU over trade deal with Australia
NFU President Minette Batters said: “As the first deal to be struck under our new independent trade policy, this FTA provided a chance to set the standard for future deals which incentivise trade in food produced to higher environmental and animal welfare standards.
“However, it is clear from this report that the UK government has missed the opportunity to reach a genuinely innovative and world-class FTA with Australia.”
“While it is reassuring that this deal will not result in a change in production standards here – for instance, imports of hormone-reared beef will still be banned – the report confirms that this FTA simply opens up UK agricultural markets for Australian produce, whether or not produced to the same standards that are legally required of UK farmers.
“This deal will pave the way for others to follow, and I’m increasingly concerned about the cumulative impact of the government’s FTA programme, especially as its own impact assessments anticipate a negative economic impact on UK farmers.
“It’s vital that government provides a clear programme of policies and investment to help UK farming get ‘match ready’ for this new, tougher trading environment.
“We also need to see government working with farmers to develop a set of core environmental and animal welfare standards which it can seek to safeguard through forthcoming FTAs, as well as in its general import policy under its current WTO commitments,” Mrs Batters added.
North Lincolnshire Council names Galliford Try to create enterprise and innovation hub in Scunthorpe
Galliford Try has been appointed to work on a multi-million-pound enterprise and innovation hub in the heart of Scunthorpe town centre, for which planning permission was granted earlier this year.
The company will complete detailed designs for the £12m redevelopment for North Lincolnshire Council as part of the Government’s Future High Streets Fund.
Cllr Rob Waltham, leader, North Lincolnshire Council and Towns Fund Board Member, said: “The enterprise and innovation hub will be a game-changing addition to the heart of Scunthorpe, welcoming new people to the town centre for new reasons.
“Not only will businesses benefit from the incredible environments and green space, the growth of staff and young professionals will directly support Scunthorpe’s bars and hard-working retailers. It is a real win-win for the high street.”
Designs are set to include outstanding collaborative space for businesses, as well as a 46-bed unit for the NHS and licensed café bar.
The innovation hub is one of several projects being delivered to transform Scunthorpe and create a different future. The schemes are funded with £30m of Government cash from the Department for Levelling Up, Housing and Communities, through the Towns Fund and Future High Streets Fund.
They include delivering gigabit broadband to hundreds of businesses, creating an advanced manufacturing park, delivering green energy schemes for schools and community buildings, new cultural experiences, a blue light facility, and hundreds of news homes.
The plans are designed to stimulate the creation of more, better-paid jobs, driving prosperity and ensuring a new future for people who live locally.
Cliff Wheatley, Managing Director of Galliford Try Building North East, said: “The new hub helps revitalise the high street and will attract more people into the heart of town, stimulating the local economy and ensuring its future sustainability.”
Cllr Waltham added: “With the construction of the hub moving ever closer, there is a fantastic opportunity for forward-thinking businesses to relocate or expand into the town centre, becoming part of Scunthorpe’s exciting next chapter.”
Credit management services provider expands into financial services sector with new acquisition
Lowell Group, the Leeds-based credit management services providers, has acquired Hoist Finance UK.
The transaction includes the operations of Hoist Finance UK and its entire unsecured non-performing loan portfolio, comprising of over 2 million consumer accounts, with approximately £585m 180 month Estimated Remaining Collections as at December 2021. The loan portfolio is almost exclusively in the credit card and personal loan sector.
The acquisition continues Lowell’s growth trajectory as well as delivering targeted, strategic expansion into the UK financial services sector, specifically banking. Lowell will also benefit from improved data insight from the financial services market, materially speeding up pricing and analysis whilst reducing investment risk.
The transaction is valued at £370m on an enterprise value basis as at 31 December 2021 which accounts for £340m of net debt. Completion is subject to the approval of the Financial Conduct Authority and is expected Q3 2022.
Colin Storrar, Lowell Group CEO, said: “Hoist Finance is a strong UK market player and its platform, experience, data and portfolio will bring much added value to the Lowell Group. This transaction also demonstrates our ambition, cementing our place as one of the largest UK and European credit services providers across all principal sectors. This is a continuation of our growth trajectory and supports the delivery of the strategic goals we set ourselves.”
Contractor appointed for £5.4m business incubation hub in Rotherham
Plans to create a brand-new business incubation hub on Century Business Park in Rotherham have taken a step forward with Esh Construction now appointed as contractor.
Led by Rotherham Metropolitan Borough Council, Century 2 will provide high-quality, serviceable office and workshop accommodation designed to help micro or start-up businesses grow. The facility will feature 20 workshops, 16 office units and 2 laboratories for 38 businesses.
This second phase will build on the success of the nearby Century Business Centre, which was constructed in 2000, and has since helped over 300 businesses, playing a crucial part in the economic regeneration of the Manvers area.
Esh Construction has been appointed as design and build contractor after the scheme was procured by YORhub’s YORbuild2 framework and will work in partnership with The Harris Partnership and RWO Associates.
Esh’s operations director, Paul Waller, said: “We are delighted to be working in partnership with Rotherham Council on this key facility that will enable businesses to become more successful and sustainable, contributing to a boost in local employment and the economy.
“From receiving the initial brief, Esh has led a fast-tracked pre-construction process which included developing design proposals, arranging surveys, pricing the scheme, and submitting planning all within a 10-month period. A huge achievement from everyone involved and we look forward to getting work underway.”
The new centre will feature a central reception and lettable conference facilities for larger meetings and functions. Externally, the site will include car parking, cycle storage and electric car charging points. The workshop zone will have its own dedicated service yard for light vehicles such as transit vans and utility vehicles.
A fabric first approach has been taken towards creating a more sustainable building and renewable heating will be incorporated within the office spaces via air source heat pumps.
The site is located just off the A6195 at Wombwell. It will be managed by Rotherham Investment and Development Office (RiDO) which manages similar facilities across the borough.
There will also be a focus on achieving a BIM Level 2 accreditation throughout the scheme, with Magenta Solutions Ltd leading on the BIM Execution Plan, as well as achieving a BREEAM rating of ‘Very Good’.
New seven-storey building approved for Leeds as next phase of landmark development
Plans for Vastint UK’s landmark Leeds development, Aire Park, have taken a significant step forwards as planning consent has been granted for the next phase of the scheme.
Leeds City Council has approved plans for a new seven-storey building, which will provide 75,000 sq ft of office space and almost 7,000 sq ft of flexible ground floor space for local retail, restaurant and amenity businesses.
The new building is located on the corner of Waterloo Street and Hunslet Road, neighbouring the iconic Tetley building, and will mark the gateway to Aire Park on the approach from Leeds train station and city centre. Work on the building is set to begin later this year.
The building has been designed by architects Cartwright Pickard, with sustainable construction and occupant wellbeing in mind. Manufacturing elements of the structure and façade offsite will help to make the building more environmentally friendly by maximising its thermal performance and reducing waste. The building will target BREEAM Excellent.
Reflecting changes in the world of work due to COVID-19, the ground floor has been designed for a flexible co-working space. Cycle storage and changing facilities promote healthy commuting and active lifestyles and, unlike a sealed air-conditioned office building, opening windows will give tenants control over levels of fresh air.
Floor-to-ceiling windows on all sides of the building will also give office workers 360-degree views across Leeds, providing high levels of natural light and a strong visual connection to the greenery of Aire Park. The building also has a large roof terrace with views across the park and Leeds’ skyline.
A Leeds City Council Planning Officer’s report accompanying the decision said: “The proposals present the next step in the delivery of the built setting to a 21st Century, child-friendly, biodiverse and climate change-adapted City Park for all generations, that would bring significant new pedestrian and cycle connections, the delivery of major office employment space in the South Bank, and the first phases of the regeneration of the Tetley Brewery site, which closed almost ten years ago.”
Plans have already been approved for additional commercial space, the restoration and expansion of the former Crown Hotel, and the detailed design of the park, as part of the first phase of the development.
Payments entrepreneur aims to triple business with help of £850k investment
A fast-growing card payment solutions provider aims to treble the size of its business following an £850,000 investment.
Grimsby-based Card Industry Professionals has raised the equity funding from both the Northern Powerhouse Investment Fund (NPIF) and the Midlands Engine Investment Fund (MEIF), managed by Mercia.
Founded in 2017, by award-winning young entrepreneur Ciaran Savage, Card Industry Professionals provides card terminals, point of sale and online payment solutions to thousands of merchants throughout the UK. It focuses on SMEs including retailers, hair and beauty salons and hospitality businesses, and offers a range of solutions to suit different trading volumes and requirements.
The company has doubled its revenue each year since it launched. The management team has also been bolstered by the addition of Ciaran’s mother, Lyn Savage, as operations director, and sales director John Selby, who, between them, have over 40 years’ experience in the payments industry.
Card Industry Professionals employs a 13-strong team in Grimsby and has a nationwide network of over 130 sales agents. It currently processes over £25m worth of transactions per month and aims to triple that number in the next 18 months. The funding will enable it to strengthen its board, create around 10 new jobs in Grimsby, and continue to expand its product range by incorporating the latest innovations in payments and fintech.
Ciaran Savage, founder and director, says: “This is an exciting moment for Card Industry Professionals as we continue to grow and develop. The investment will enable us to deliver our long-term plan to support and introduce many more merchants to new and emerging payments technology.
“As we shift to more contactless and digital payment methods, we want to make it as easy as possible for merchants to access and adapt to the new payments technologies available, feel supported with the implementation and enable merchants to provide the choice and flexibility to their customers.
“With this investment we can develop upon our portfolio of products, as well as expand our sales team throughout the UK and customer support teams based within our head office.”
Maurice Disasi of Mercia added: “The pandemic has accelerated the uptake of contactless payments and many smaller firms – particularly ‘cash-led’ businesses such as takeaways and hair salons – are having to adapt.
“Card Industry Professionals focuses on this underserved market and is ideally placed to help businesses make the transition to alternative payment methods. The funding will enable the company to stay at the forefront of technology and expand its market share.”
