- UK sales were down by 9% in Q4 compared to Q3, while UK advanced orders reduced by 17%
- Overseas sales and orders were down by 3% and 1% respectively
- The proportion of businesses that increased their workforce fell by 8% (a net 25% of organisations grew headcount in Q3 compared to 17% in Q4), while there was a 3% drop (from a net 38% in Q3 to 35% in Q4) in those saying they expect to employ more staff in the next three months
- The rate of improvement for cashflow dropped by 10% at the same time as 62% of organisations (up from 46% in Q3) were concerned about future price rises
- There was a 2% drop in the proportion of businesses intending to invest in machinery and a 7% in those anticipating investment in training staff
- Confidence on turnover and profitability improvements dropped by 3% and 8% respectively
East Midlands economic recovery slows as businesses grapple with uncertainty and price rises
The brakes are being applied to job creation, sales and investment in the East Midlands as economic growth slows down, new research reveals.
Every indicator of economic activity recorded a drop between the third and fourth quarters of 2021 in East Midlands Chamber’s Quarterly Economic Survey, while confidence was also down.
It was also the first time the State of the Economy Index – which aggregates the various indicators to rate the region’s economic health – fell since the beginning of the pandemic, having grown consistently since Q2 2020.
Chris Hobson, director of policy and external affairs at East Midlands Chamber, said: “The reading of our State of the Economy Index will be a disappointment for businesses and indicates an economy that continues to grow, but at a rate of pace that is slowing.
“To put it another way, over the past few months, the brakes have started to be applied to parts of our economy.
“When we dig a little deeper, we can see the reality for many businesses. They are having to contend with rising prices for raw materials and staffing, which is putting the squeeze on margins.
“While many businesses spent much of 2021 trying to stave off passing these price rises on to support competitiveness, additional pressures at the end of the year, including increased energy costs, seem to have provided the proverbial straw to break the camel’s back.”
Just under 400 businesses across Derbyshire, Leicestershire and Nottinghamshire took part in the survey between 1 and 22 November.
Key findings from the survey for the East Midlands included:
Chesterfield IoT software company raises £2.1m
A Chesterfield-based business which aims to transform industry with its internet of things software platform has raised £2.1m to accelerate its international expansion.
Konektio received funding from both the Midlands Engine Investment Fund (MEIF) and Northern Powerhouse Investment Fund (NPIF), managed by Mercia and Foresight Group, along with existing investor Tern plc.
The funding will allow Konektio to further develop the product, boost its sales and marketing team, create a number of new highly skilled roles at its headquarters, and grow sales in international markets.
Konektio’s main product AssetMinder enables companies to connect to and monitor assets, ranging from individual components to turbines in remote locations or assets across an entire factory floor. The technology gathers data from the assets, allowing users to make informed decisions on maintenance and servicing, reducing downtime and energy usage and improving efficiency.
AssetMinder, which was commercially launched just over two years ago, is now used across multiple sectors from food processing and manufacturing to logistics, energy and water industries. Konektio clients include maintenance and repair operation Dexis, GCE Healthcare, global engineering company Howden and gas turbine manufacturer Centrax, among others.
The company, which was previously known as InVMA, was founded by Patrick Nash, Jan Hemper and Jon Hill, who recognised the need for the software due to their work as industrial IoT consultants. It now employs around 20 staff at its headquarters in Chesterfield and has recently opened an office in North Carolina.
Peter Stephens, CEO of Konektio, said: “Companies have started to cut through the confusion around digital manufacturing and the next industrial revolution and now share a real appetite to see how the intelligent use of data can deliver returns on investment.
“This is really good news for our business, and we are looking to capitalise on this trend by investing significantly in product development, R&D and expanding our global customer base. The investment secured will help us achieve these goals.”
Kiran Mehta, investment manager at Mercia, said: “Konektio is a deep tech company with the potential to transform industries ranging from manufacturing to infrastructure and power generation. The team are renowned for their knowledge and strong track record. This funding round will enable them to take their product to the next level and establish the company on the global stage.”
Adam Huckerby, senior investment manager at Foresight, added: “We have been impressed by management’s achievements to date. There is a wealth of growth opportunity in the market and this is one of several IOT-related investments Foresight has made. We look forward to working with the team over the coming years.”
Al Sisto, CEO of Tern Plc, said: “We are very pleased that Konektio has secured a significant institutional investment in order to fund the next phase of its growth. We welcome the Mercia and Foresight funds as our partners, alongside the management and founders of Konektio, to help the business achieve its full potential.”
Kerry’s Fresh donates Christmas trees to local care homes in bid to spread festive cheer
Nottingham-based produce supplier Kerry’s Fresh has donated a number of real trees to local care homes and causes – in a bid to share some festive cheer this Christmas.
The family-run business delivered real trees to Church Farm Skylarks care home in Lady Bay, and Church Farm Rusticus in Cotgrave, where they were greeted with joy from residents and staff.
The Friary, a local charity based in West Bridgford also received six trees from the business, to deliver to local, vulnerable families who would otherwise not have had a Christmas tree this year.
Aidan Kerry, business development manager at Kerry’s Fresh delivered the trees personally and said: “Ensuring we followed all safety procedures, it was really lovely to meet some of the residents at the care homes and we were delighted to see how pleased they were to receive the trees.
“We also hope we brought some joy to those families who will have received the trees in partnership with The Friary this year.
“As a business, we are always looking at ways we can help and engage with the local community spread some cheer, especially in such uncertain and turbulent times. We wish everyone a safe and Happy Christmas.”
Specialising in care for people living with Dementia, staff at Skylarks care home were preparing for their annual ‘Winter Wonderland’ themed party for residents where the tree would take centre stage.
Whilst at Church Farm Rusticus resident Jean was excited at the prospect of decorating the tree.
Helen Walton, head of operations at Church Farm Care, said: “We were delighted to receive Christmas trees at our Church Farm care homes from this generous local business. Our family members love Christmas and everything that is involved.
“Engaging with the local community is extremely important to Church Farm Care so this gesture means a great deal.”
90% of Midlands businesses set to be impacted by R&D tax reform
Ninety per cent of Midlands business leaders will need to rethink their tax and innovation strategy as the Government has confirmed new R&D tax relief rules, first announced in the Budget, according to new research from accountancy firm, BDO.
The bi-monthly Rethinking the Economy survey of 500 leaders of medium-sized businesses reveals the significant proportion of Midlands businesses that will be impacted by the announcement which aims to target abuse, improve compliance and drive UK innovation.
Experts warn that without forward planning and a holistic tax strategy, this could have substantial implications on business’s cashflow and moreover for innovation in UK businesses and particularly in the regions.
Ross Northall, partner at BDO LLP, said: “At a policy level, it makes sense that the Government are seeking to onshore R&D, enhance UK innovation and better police genuine UK R&D but, practically, business leaders need a plan.
“The 90% of Midlands businesses with overseas R&D will need to consider modelling the impact of these tax changes on their R&D claim. This will allow them to truly understand the net cost of innovation for future R&D now the detail has been announced.
“Of course, the greatest cost to UK Plc could be that businesses invest less in R&D overall as they’re not able to transfer the current level of investment into the UK.”
ONS figures estimate that approximately £25.9 billion of the £47.5 billion of R&D investment in 2019 was in the UK with the remainder spent overseas.
BDO tax director, Claire Hudson, added: “For business leaders, this isn’t a case of just re-looking at their approach to R&D. Companies need to take a strategic approach and consider the detail of these changes and whether a restructure is required.
“There are several corporate tax considerations, such as whether onshoring would result in a transfer of IP, whether transfer pricing is impacted, and any overseas entities need to be liquidated. The good news is there is time to get into the detail, but this needs to be a priority for leaders in the new year.”
Businesses have struggled with staff shortages over the past 12 months and recent data showed 77% of Midlands businesses are already planning to increase their use of contractors to bridge the skills gap next year. Skills shortages could also be a considerable barrier to onshoring effective R&D.
BDO tax partner, Ben Tarry, who leads the Global Employer Services team, added: “The changes may also have an impact on staffing models within businesses, which could see a need for increased resource located in the UK.
“This could either be through permanent transfers, project workers or other. In each scenario there will be a need to consider the tax, social security and payroll compliance implications of cross-border employee movement.”
There is also a Government consultation – open until the 7th January 2022 – seeking views on the introduction of a UK re-domiciliation regime, which would make it possible for companies to re-domicile and therefore easier to relocate to the UK.
Housing developer on a mission to make Christmas special for disadvantaged kids
East Midlands housebuilder Peter James Homes has collected well over two hundred gifts as part of a drive to ensure that no child goes without a present this Christmas.
Alongside its partners within the McCann Group; J McCann & Co Ltd and McCann Utilities, Peter James Homes has teamed up with Nottingham radio station Gem 106 and charity, Cash for Kids as part of this year’s Mission Christmas.
Cash for Kids teams up with radio stations and companies across the UK every year to make sure every disadvantaged child wakes up on Christmas morning with a present under the tree.
For the past few weeks, Peter James Homes has been asking its suppliers, and anyone else who wished to help out, to donate new and unwrapped Christmas presents for youngsters of all ages.
Now, 298 presents have been amassed at the group’s head office in Chilwell, Nottingham.
Staff have also been raising money for the cause, including making cash donations for wearing festive garb to work on Christmas Jumper Day, Friday, December 10, and the grand total currently stands at £1,405
John McCann, CEO & Chairman of the McCann Group, said: “The generosity of our staff, suppliers, partners and others has been astounding.
“The idea of bringing joy to the life of a vulnerable or disadvantaged child, brings out the true meaning of Christmas in all of us. We were simply delighted to be able to pass on so many wonderful gifts to such a worthwhile campaign as Mission Christmas, from all branches in our group.”
Companies that contributed to Peter James Homes’ Christmas gift request include Nottingham solicitors Gateley Legal, Midway Clothing, which supplies PPE and branded apparel to Peter James Homes and McCann, estate agents William H Brown and FHP Living, marketing agencies M360 and The Dairy, Castle Donington-based Poppy PR Ltd, Birmingham City Council, Enva a local skip hire company, and United Trust Bank which has funded most of the developments at Peter James Homes.
Justine Bates, fundraising executive at Cash for Kids Midlands, said: “Christmas is a time for giving, but we’re blown away by the efforts of our donors this year. We’d like to thank everyone at Peter James Homes, McCann and everyone else who has donated cash and gifts for helping to ensure no child goes without this Christmas.”
Nottinghamshire care provider sold
Specialist business property adviser, Christie & Co, has sold Bank House Care Homes which comprises a portfolio of two purpose-built care homes in Nottinghamshire.
Established by Trish and Kris Sooriah in 2000, Bank House Care Homes is a family-run business that has enjoyed success with its two most recently constructed state-of-the-art, purpose-built care homes, Ashcroft and Willowcroft, which now make up the entirety of the business’s care home portfolio.
Both homes are situated on the same site, close to Sutton-in-Ashfield town centre in Nottinghamshire.
The business has been purchased by Only Care Limited, a family-run operator established in 2007, which caters to residential, nursing and dementia care needs across England.
Speaking on behalf of Only Care limited, director, Rishi Dhamecha, says: “We are excited to have completed on the acquisition of these two purpose-built care homes in Sutton-in-Ashfield, Nottinghamshire.
“Both homes have a fantastic reputation and share the same family values as us. We look forward to working closely with the team to continue the outstanding levels of care. We also wish Patricia Sooriah and her family well in their next endeavours.”
Lee Howard, regional director – healthcare at Christie & Co, who handled the sale, says: “It has been a pleasure to act for Kris and Trish over the years, having been involved in selling them Ashcroft in 2011. It is a fitting tribute to the late Kris Sooriah and Trish’s continuation to see the units become two of the most respected homes in the Midlands and we were honoured to act in selling them to Only Care.”
Bank House Care Homes was sold for an undisclosed price.
Jobs created as distribution business expands with 100,000 sq ft unit
Commercial Property Partners (CPP) has completed a 100,000 sq ft letting at Calladine Park, Orchard Way, close to Junction 28 of the M1, to distribution business, Home Delivery Solutions (HDS).
The move is set to support HDS’s expansion requirements following significant growth over the past 18 months in the volume of goods handled through existing contracts, alongside new client contracts.
This recent growth for the business, which includes key clients Costco, B&Q and Vibrant Doors, has resulted in the expansion from its present base in Markham Vale, Chesterfield, and will secure an additional 20 jobs, with more to follow.
The unit offers HDS a modern high-grade warehouse with reception, office and refurbished welfare provision.
Sean Bremner, director of CPP, said: “We are delighted to have agreed terms with Home Delivery Solutions so swiftly after our client completed their works upon the building. HDS’s initial search was for a smaller property, but during our conversations their volumes continued to rise and so our suggestion to match them into Calladine Park has worked out well for all parties. They are a welcome addition to our client’s portfolio.”
Stephen Taylor, Managing Director of Home Delivery Solutions, added: “HDS has seen huge growth helping our clients to meet their delivery promises over the past year. The move to Calladine Park will enable our business to continue with its rapid expansion plans.
“From the first meeting with Sean, he understood what we needed, was pro-active in showing us suitable options and slick negotiations followed to enable us to move swiftly to a deal position.”
Rob Wofinden from Browne Jacobson’s Nottingham Office was legal counsel to the landlord and commented: “It was a real pleasure working alongside CPP on this matter for our mutual client. The whole transaction ran very smoothly, and the client is delighted to have Home Delivery Solutions on board.
“The lettings market in the warehouse and distribution sector is certainly very strong, particularly across the Midlands region, and it is great to be at the forefront advising on these significant letting deals with CPP.”
Time to go green and boost your business
Leicester’s Business Gateway is giving small businesses the opportunity to play their part in tackling the climate crisis and improve their bottom line with a series of six webinars in the new year. As well as reducing their carbon emissions, the businesses will be helping to attract more trade as customers increasingly looking to buy from sustainable companies.
The Business Gateway has commissioned Sustainability West Midlands (SWM) to run the webinars which start in January and, like all Business Gateway events, will be free of charge to participating businesses. The programme of webinars will cover How to find funding and support; Green transport; Energy saving; Reducing waste and Bringing your staff on board.
Andy Whyle of SWM said: “We’re delighted to be working with the Business Gateway again to promote sustainability, particularly as Leicestershire is so clearly committed to tackling climate issues head on. We’ll be including speakers from local companies who have already introduced green changes, so that other small businesses can see how easy it is. Our focus throughout will be on supporting small businesses to understand the need to go green, where to find funding to do this and the benefits that they can create.”
Sonia Baigent, Chair of the Business Gateway Board, added: “In the near future, there are bound to be new regulations around waste reduction, renewable energy usage and carbon emissions so this programme is designed to help Leicestershire businesses get ahead. On top of that, the latest research shows that a massive 85% of UK consumers now make more sustainable lifestyle choices. By becoming more sustainable, our businesses can get a share of that. Going green really will boost your business.” (Deloitte: Sustainable Consumer)
An additional benefit for participating businesses is that they will be supported to draft their own Green Policy document at each webinar, completing it at the final webinar in March 2022.
The full programme of webinars for Going Green to Boost your Business is:
What Does Net Zero Mean for your Small Business? 11 January
Funding, support and opportunities for your SME 25 January
Greener Transport 8 February
Energy Saving in your Small Business 22 February
Reduce your Waste, increase your Profitability 8 March
Engaging your Customers and Staff 22 March
All webinars start at 1pm and run until 2.30pm
You can book your place here: https://bit.ly/2ZYYN53
Accountancy firm secures private equity investment
Dains Accountants has secured significant investment from Horizon Capital, the private equity investor specialising in technology and business services.
With almost 200 staff, Dains provides services to 4,000 fast-growth businesses, international companies and high net worth individuals helping clients achieve their goals through audit, tax and business advisory and support services.
The market that Dains operates in is highly fragmented and driven by strong tailwinds due to increasing levels of compliance and sophistication, as a result of which a growing proportion of clients are outsourcing business-enhancing tasks to expert providers.
Dains has delivered growth through the COVID-19 pandemic. Horizon Capital have invested significant capital to expand these capabilities further and to enhance this through high quality acquisitions. The partnership with Horizon will enable Dains to continue to build on the momentum already created following the recent acquisitions.
Dains is Horizon Capital’s fourth new platform investment in 2021 following those in BP3, Modern Networks and The Marketing Practice (TMP) earlier in the year, which have already completed four acquisitions collectively on their buy and build journeys.
Richard McNeilly, managing partner of Dains, said: “This is an exciting time for Dains, our clients and colleagues. We are delighted to be partnering with Horizon Capital who have a strong track record in supporting companies such as ours to accelerate both organic and acquisitive growth. Dains has grown in recent years thanks to the hard work of our colleagues and the support of our clients, and we look forward to building on that success with this investment.”
Luke Kingston, partner at Horizon Capital, added: “We are excited to invest in Dains as the company provides essential, tech-enabled services to a large universe of Small and Medium-Sized Enterprises and high net worth individuals, both vital components of the UK economy. Dains is already a strong player with an impressive track record, and we look forward to working with Richard and his team to supplement this with an exciting acquisition strategy.”
2022 Business Predictions: Lee Marshall, Managing Director at Viridis Building Services
It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Lee Marshall, Managing Director at Viridis Building Services.
2021 has been another year dominated by Covid-19. We began the year optimistic of its end but as the year has gone on, we have continued to adapt to this new way of life. For businesses, there has undoubtedly been a strain financially, but the pandemic has also brought with it an opportunity to promote the importance of health and wellbeing at work and at home.
At work, a new ‘blended’ approach has taken centre stage, with employers understanding that staff need a good work-life balance by working both at home and in the office. The office has also seen a change with many downsizing their space to a better suited environment.
Many have also moved house or made changes to their home to meet their new needs, as well as deciding it is time for a career change – even to jobs that they may not necessarily have considered pre-pandemic.
I predict that these trends will continue to grow into 2022 as Covid will remain a key feature in our lives and pave the new way of working and living.
I also think that sustainability, which has been a big talking point this year, will continue to be high on the agenda for 2022. With agreements from COP26 beginning to impact legislation and the next COP being held an unprecedented one year after Glasgow, we will certainly see environmental solutions become engrained in all policies and procedures over the next five years as we to try to combat change.
