Manufacturing M&A rebounds

UK manufacturing M&A activity grew by 11% in 2024, rebounding to levels last recorded in 2022, despite the continued pressure of rising costs, labour shortages and geopolitical tensions, according to accountancy and business advisory firm BDO. BDO’s Manufacturing Deals Review reveals that 782 UK manufacturing deals were completed in 2024, up from 707 deals reported in 2023. Despite this buoyancy, the sector is not without its challenges as businesses look to implement the rises to employer’s NI costs and minimum wage levels and prepare for the proposed employment law changes. Analysis shows that deal activity slowed somewhat in the first half of 2024 but gained momentum following the Autumn Budget with 475 deals completed in the latter six months. Additionally the findings show an urgency for deal completions in view of anticipated changes to Capital Gains Tax and Business Asset Disposal Relief. Furthermore there was an increasing interest from entrepreneurs considering exit both of their ownership and the UK. Businesses in the engineering services subsector were the most prolific deal doers seeing a 26% increase in activity and representing almost a third (32%) of all completed transactions for the year. This was followed by businesses in the packaging & materials sector which saw deal volumes increased by almost a fifth (18%), and accounting for 11% of all completed transactions. Separate research from BDO and Make UK reveals that over a quarter (26%) of UK manufacturing business are considering a sale of all or part of their business within the next two years. This increases to over a third (35%) across the next three to five years, suggesting a positive shift in M&A sentiment as many business leaders look to implement their strategies. Roger Buckley, UK Industrials M&A Partner at BDO, said: “Last year proved to be a busy year for manufacturing deals but upcoming policy changes are now weighing heavily on business confidence, recruitment plans and growth intentions. Many businesses will be hoping for a boost in sentiment when the Industrial Strategy is announced later this year. “Looking ahead we expect to see a solid year of M&A activity. Valuations are holding firm and there remains a large cohort of cash-rich investors who believe in the long-term prospects and broad opportunities for growth within the sector. These businesses now need government to offer incentives that will support their investment in new technologies and onshoring or reshoring operations.”

SMEs promised share in work from increased defence spending pledge

Thousands of small businesses in the UK will receive government support to ensure they benefit from the historic decision to increase defence spending to 2.5% of GDP. The government has announced plans for a new hub to provide SMEs with better access to the defence supply chain and committed to set direct SME spending targets for the Ministry of Defence by June this year. This is a chance for small, often family-owned, firms to bring their innovations, their agility and their expert workforce to the task of strengthening Britain’s defences. It will help create new jobs, boosting the economy of small towns and suburbs in the UK. It follows the Government’s historic uplift in defence spending to 2.5% of GDP by April 2027, with a commitment to hit 3% in the next Parliament. This investment in defence will deliver the stability that underpins economic growth, and will unlock prosperity through new jobs, improving the lives of people in every corner of the UK. Defence Secretary John Healey said: “For too long small businesses felt locked out of defence, but we’ve listened and we’re acting. Today’s announcement will ensure that smaller firms benefit from increased defence spending, attracting new suppliers and fast-tracking the technologies of the future into the hands of our Armed Forces. This a new era for defence and we will ensure it plays the fullest part in our national economic growth. “The new hub and investment targets will ensure this increased spending directly benefits SMEs as much as possible – supporting jobs, growth and innovation. This is a vote of confidence in the prospects of up to 12,000 SMEs, supporting them to raise finance and train workers with confidence. It marks further progress to deliver the government’s Plan for Change, putting more money in people’s pockets and rebuilding Britain.” Nearly 70% of defence spending goes to businesses outside London and the South East, bolstering local economies from Scotland to the North West. However, only 4% of this spending went to SMEs in 2023-2024, which is why the Government is stepping up to provide more support to SMEs and help them get their foot in the door in the defence supply chain. The new Hub will work with suppliers across the nations and regions of the UK to ensure that it fully meets their needs. This will strengthen defence procurement through increased choice and faster access to innovation. It will keep the UK at the forefront of defence technology, improving the capabilities available to our Armed Forces, the competitiveness of UK industry and growing potential exports benefits.

Third Lincolnshire library launches business hub

Businesses in Grantham are being offered access to a business hub at the town’s library with flexible and confidential workspaces with modern technology.

The move will mean a new IT suite equipped with business software, as well as drop-in working zones kitted out with acoustic booths and ‘bubbles’ for interviews and online meetings. Facilities have been designed with flexibility in mind, meaning the spaces can be used as additional study space for library users, as well as by local education providers, community groups, and more. Visitors can also look forward to a refreshed and redecorated library, with new carpets fitted throughout. Cllr Martin Hill, leader of Lincolnshire County Council, said: “We’re investing in a suite of new facilities to support the town’s small businesses, providing three new flexible working areas to meet their needs. “By listening to residents and businesses and implementing creative solutions like business hubs, we can continue to ensure that Lincolnshire’s libraries remain the beating heart of community life.” Grantham is the third library in Lincolnshire to benefit from the addition of business hubs, following Lincoln and Spalding libraries, and work is expected to start later this summer.

Spilsby Market relaunch aims to boost local economy

Spilsby Market will relaunch on Monday, 4 March, following efforts by East Lindsey District Council and Spilsby Town Council to revitalise the weekly event. The market aims to attract more traders and visitors, support local businesses, and provide residents with fresh, locally sourced products.

As part of the initiative, the council has introduced a 50% reduction in market fees. Pitches now start at £7.50—among the lowest in the region. The market will operate every Monday throughout the year.

Grantham Library to add business hub with flexible workspaces

Lincolnshire County Council is investing in a new business hub at Grantham Library, providing flexible workspaces and modern technology for local businesses, students, and community groups.

The hub will include an IT suite with business software, drop-in working zones, and acoustic booths for interviews and online meetings. Spaces will also be available for study and educational use.

Grantham is the third Lincolnshire library to receive a business hub, following similar upgrades in Lincoln and Spalding. Renovations, including new carpets and redecoration, are set to begin later this summer.

Barnsley Council unveils £5m business support package

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Barnsley Council has announced a proposed £5 million support package to help businesses in the borough, offering financial relief and safeguarding jobs. The initiative, funded through surplus business rates collected nationally and locally, was introduced as part of the council’s budget plans.

The scheme includes 100% business rate relief for eligible retail, leisure, and hospitality businesses operating in Barnsley at its launch. Additional funding will be available for companies not qualifying for rate relief, with access tied to engagement with council business support services.

The package will take effect on 1 April 2025 and run until 31 March 2026. Barnsley and Rotherham Chamber of Commerce welcomed the move, highlighting the pressures businesses face from rising costs and reduced support. The council aims to strengthen the local economy and maintain the vitality of town centres, positioning Barnsley as an attractive place for investment.

Howdens commits to £100m share buyback as market challenges persist

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Howdens is set to return £100 million to shareholders through a new share buyback programme, reinforcing confidence in its financial strength despite ongoing pressures in the UK kitchen market.

The company reported steady results for 2023, with revenue rising slightly by 0.5% to £2.32 billion and pre-tax profit edging up 0.2% to £328 million. While market conditions remain tough, Howdens has focused on cost efficiencies and strategic investments to maintain stability.

Last year, the business expanded its footprint with 29 new depots and modernised 76 existing locations across the UK. It also introduced 11 new kitchen ranges, enhanced its digital infrastructure, and upgraded manufacturing and supply chain operations to support its trade customers.

North Lincolnshire Council wants to bring AI Growth Zone to the area

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North Lincolnshire Council wants the Government to designate an AI Growth Zone in Northern Lincolnshire, with the prospect of nearly 10,000 new construction jobs, 1,200 new jobs on site and a further 4,000 industrial jobs safeguarded through supply chain opportunities. The AI Growth Zone could mean £15bn in private business investment and 1.5 gigawatts of AI processing capacity coming to Northern Lincolnshire, helping to boost industries in the region and across the UK. The area is uniquely positioned to attract this opportunity thanks to its industrial base, skilled workforce and the fact it generates 20% of the UK’s total electricity, including 27% of its offshore wind. Four major sites are in the early stage of development and one £3bn scheme – Humber Tech Park – has already been approved. Humber Tech Park, the UK’s first dedicated AI training data centre, will be built on land near the A180 to the south of South Killingholme and create around 400 jobs. A second site is on unused land at British Steel’s Scunthorpe plant. Thousands of green jobs will be created as the council continues to work with British Steel to deliver new investment on surplus land on the 300-acre site. The Northern Lincolnshire Artificial Intelligence Growth Zone will also commit to signing up to and adopting the UK Steel charter, further embedding UK produced steel in high-profile infrastructure projects alongside the recent Heathrow commitment. This will support the safeguarding of steel making in the UK and high-value jobs in the North Lincolnshire region. The other two sites are in early development and will be revealed later this year. North Lincolnshire Council is partnering with Greystoke, the specialist planning business for high-tech infrastructure, on the AI Growth Zone. Cllr Rob Waltham, leader, North Lincolnshire Council, said: “There is a huge opportunity to create thousands of better paid jobs here in North Lincolnshire, attracting innovative technology companies who will provide a positive future for local residents and their families. “I am really keen to create opportunities for young people with these new jobs. All too often they leave our area for big cities, with this investment there is scope for them to stay locally with their families and help us to build a strong and growing economy for tech businesses on our doorstep. “We already have a track record of delivering these investments following the permission of ‘The Humber Tech Park’. This is an unprecedented investment in our area, and it will be a magnet for attracting other high-tech businesses to make North Lincolnshire their home. “We want to make the most of this and sites have been secured for these fantastic developments, including on land at British Steel in Scunthorpe. “We are determined to take advantage of the green and high-tech opportunities globally while harnessing our engineering skills and capabilities locally into the future.” Sam Matthew, chief operating officer of Greystoke and director of Humber Tech Park, said: “Northern Lincolnshire AI Growth Zone will supercharge the UK’s AI capability and can be rolled out rapidly and at great scale. “Delivering more than 1.5 gigawatts of AI processing capacity, it will create exciting new opportunities for national and regional industries. North Lincolnshire’s substantial energy infrastructure, and extensive skills base make it the ideal location for an AI Growth Zone.”

Financial distress surges among Yorkshire businesses

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Yorkshire businesses are experiencing a sharp increase in financial distress, with 3,303 firms classified as being at critical risk of insolvency in Q4 2023—a 32.4% rise from the previous quarter, according to Begbies Traynor’s latest Red Flag Alert report. Year-on-year, the number of distressed businesses in the region grew by 18.3%.

The financial strain in Yorkshire is more pronounced than the national average, where critical distress rose by 25.9% quarter-on-quarter and 2.6% year-on-year. Less severe financial difficulties also climbed, with Yorkshire seeing a 13.1% rise since Q3 and 9.2% over the past year, compared to 12.9% and 5.6% across the UK.

The construction sector reported the highest number of critically distressed businesses in Yorkshire, reaching 604—a 30.7% increase from the previous quarter. Real estate and property services firms in severe financial trouble rose by 35.4% to 409, while professional services businesses, including accountants, solicitors, and architects, saw a 51.5% increase, affecting 256 firms.

Bradford IT recycling firm sold

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Ucan Secure IT, a large-scale provider of recycling services for redundant IT equipment, has been sold to EGO Technology in a deal that forms “a UK powerhouse” in its sector. Founded in 2010, Bradford-based Ucan collects and securely disposes of equipment including desktop computers, laptops, hard drives, tablets, mobile phones and printers, whilst also offering data destruction solutions. The company operates in Yorkshire and across the UK, working with businesses and authorities including schools and universities, and has been recognised as a zero landfill organisation. In a transaction advised upon by Andrew Dodd, KBS Corporate Director, Ucan was sold to EGO Technology, an award-winning secure IT disposal company with over 30 years of experience in sustainable recycling solutions. Announcing the deal, EGO, based in Burton-on-Trent, described its acquisition as “creating a UK powerhouse in sustainable IT asset disposal and rare earth metal recovery.” “We are absolutely delighted to have Ucan join the EGO family,” said Ian Austin, EGO’s CEO. “This acquisition is a key milestone in our growth strategy, and significantly strengthens our position in IT asset disposal solutions. “By integrating Ucan’s recycling and streaming capabilities, along with their strong team and shared vision for environmental stewardship, and the circular economy, we will create a vertically integrated model that enhances our ability to recover all valuable materials, including increasingly important rare earth metals. “Working together, we are poised to achieve remarkable things. Crucially, this acquisition reinforces our commitment to supporting the wider ITAD (IT Asset Disposition) and IT disposal industry by providing robust, UK-based recycling solutions that ensure compliance, and minimise environmental impact.” EGO believe the integration of Ucan will “provide a comprehensive, end-to-end service for businesses throughout a cross-section of industries seeking maximum value and accountability for their surplus IT hardware.” “We are forging new standards in secure IT disposal, tackling complex waste streams head-on, and will enable ITAD companies to provide high-integrity reporting for WEEE (Waste Electrical and Electronic Equipment) waste,” added Ian Austin. “Everything we truly value comes from nature, and everything we truly value depends on it. This partnership allows us to further our commitment to sustainable practices and resource recovery, and we couldn’t be more excited about the future.”