Cash and recovery in 2013
March 1st, 2013
Courtesy of Thames Valley Business Magazine February 2013
For many Thames Valley based businesses, 2013 is a year for optimism, opportunity, growth and investment
What could 2013 offer you and your business?
Respondents to Pitmans’ Annual “Funding your Business” Survey, conducted in December 2012, clearly felt the UK economy would remain in recession for the majority of 2013, but it is against this backdrop that over 76% of Thames Valley based respondents said that they anticipate a year of steady growth in 2013. This is a marked contrast to respondents from businesses which lie outside of the Thames Valley region, 60% of whom forecast trade at similar levels as 2012.
The Thames Valley has long been labelled the economic powerhouse of the UK, thanks largely to its diversity, strong skills based and excellent infrastructure – attracting top talent and global businesses from software, manufacturing, pharmaceutical, utility and construction sectors.
87% of survey respondents had a positive and open attitude towards obtaining finance from non-traditional sources – this was significantly greater in Non-Thames Valley based business in 2012 compared to 2011 while Thames Valley based respondents remained consistently positive. There is a marked enthusiasm for other sources of finance including crowd funding, stock market flotation and venture capital, as well as borrowing from friends and family.
Despite numerous public sector initiatives, only 14% of survey respondents stated that they would consider applying government grants, this is a small increase from 11% in 2011.
Cash is king and many business leaders across the Thames Valley have been gearing their operations to capitalise on future market developments by investing cash to drive down debt and to improve their financial position such that they could acquire weaker competitors. This suggests a buoyant attitude in an uncertain economy, where opportunities in the market are sought out and solid foundations laid down for growth in the years ahead.
What are you doing with your cash at present? (survey respondents were asked to select all that applied)
- 40% of all survey respondents are using existing cash to fund their daily operations to reduce their debt. This is an increase from 30% in 2011.
- Funding growth remains a popular choice – with 27% of respondents (a small increase from 23% in 2011). This may be indicative of greater market confidence.
85% of survey respondents stated that they believe that their funder understands their business. This is however a reduction in confidence against the previous year.
Does your funder understand your business?
The majority of Thames Valley based survey respondents stated that they will remain loyal to their existing funders. This suggests that relationships may have continued to strengthen as a result of the difficult economic environment, that loyalty is a two way street. This also suggests that funders are striving to understand their customers, recognising their challenges and adapting to suit the demands of the market.
Over 38% of respondents who are Thames Valley based stated their funder was ‘excellent’.
Confidence in funders’ supporting the needs of business remains strongest among Finance Directors, as 70% of Finance Directors participating in the survey scored their funder as being supportive of their business.
How helpful has your funder been in supporting your business in 2012?
Cash flow is always a concern for any business, large or small. However, the majority of business leaders participating in this survey stated that they believe their firm effectively manages debt collection. They support this by intimating that they do not anticipate the failure of clients to pay as having a great impact upon their business. The optimisation of debt collection practices has been necessitated by the economic climate, forcing companies to rationalise, and automate processes to reduce overhead and supplier costs. Nonetheless more companies are vetting their clients in advance of supplying them with credit facilities.
Whilst many look to 2013 with uncertain eyes, participants of the survey suggested various ideas to improve the economy and create the spark required to ignite the regional economy.
Survey participants suggested many ways of that the government could help them over the forthcoming 12 months including:
- “Reduction in Corporation Tax”
- “Return of the RDA’s”
- “Reduction in VAT”
- “Less red tape”
- “Increased support for transportation and infrastructure”
- “Incentives for part time working and related subsides”
- “Easier access to bank finance”
- “Incentives for Private Equity investments”
So where will support come from to fuel growth for Thames Valley businesses in 2013? Clearly strong management teams, innovation and enterprise require healthy relationships with funders to form the infrastructure required for growth.
For a summary report of the survey, please click here.
Patrick Long
Banking & Finance Partner
T: 0118 957 0488
E: plong@pitmans.com
Funding your Business Survey
November 14th, 2012
Win a Christmas turkey!
Click here to take part in Pitmans “Funding your Business” survey.
All responses will enter a prize draw to win an organic 7kg Berkshire turkey delivered to the address of your choice for Christmas.
A summary of the results of this survey will be published by the Thames Valley Business Magazine in their February edition.
Prizes will be drawn on the 17th December.
Winners will be notified on the 17th December.
Turkeys will be delivered before Christmas to local Thames Valley addresses.
See terms and conditions.
Pitmans ‘Excellent work’ highlighted in The Legal 500
November 1st, 2012
Courtesy of Thames Valley Business Magazine October 2012
The level of service is ‘exceptional’ at Pitmans, where the lawyers have ‘a very good understanding of the market and the specific needs of the client’. Work highlights included advising Maple Leaf Bakery UK on the partial sale of its bakery business, and assisting with various matters relating to Tesco’s acquisition of shares in Blinkbox Entertainment. Andrew Peddie is an ‘excellent corporate specialist with great expertise and experience’. Philip Weaver recently advised the shareholders of Thames Travel on its sale to Go-Ahead.
With a team including a number of former City litigators, Pitmans has seen an increase in shareholder matters, guarantee claims and misrepresentation disputes. Practice chair Sue O’Brien handles complex commercial litigation, often with an international element, and is also and ADR-accredited mediator. Tim Clark is recommended for his experience in IT-related matters and company and shareholder disputes.
Pitmans is highlighted for its ‘excellent success rate’ in sectors including technology, construction and retail. Team head Suzanne Brooker is ‘readily available, sharp and commercial’.
The ‘excellent’ Pitmans has a ‘longstanding, loyal team of trusted advisers’. Highly rated practice head Patrick Long concentrates on corporate banking transactions and advises banks and corporate borrowers on refinancing and restructuring issues. The team is on the panels of 10 major banks.
Insolvency & Corporate Recovery
‘Fast-moving and forward-thinking’ firm Pitmans houses an ‘excellent’ team which is ‘quick to grasp important issues’. Department head Suzanne Brooker has an ‘outstanding level of knowledge, and is one of the best in the business’. The team experienced a rise in both personal and corporate insolvency instructions in 2011.
Recognised for its strong technology-sector expertise, Pitmans recently assisted Toshiba TEC Europe Retail Information Systems in relation to an application for union recognition by Unite. Mark Symons leads the team, which includes the recommended Richard Devall. The firm also stands out for its niche practice in business immigration.
The ‘responsive and helpful’ Pitmans advises defined benefit schemes on issues such as scheme appointments and the switch from RPI to CPI. Recent work includes advising the trustees of CitiFinancial Europe on the merger of its occupational schemes into a larger parent scheme. ‘Clear, analytical’ department head David Hosford leads a team that includes two solicitors dedicated solely to pensions-related litigation.
Ferhat Choudri’s team at Pitmans gained several new clients in 2011, and acted in a multimillion-pound indemnity case.
Pitmans is highly regarded for its work advising housebuilders on acquiring development land, and recently handled two multi-million-pound site purchases for Bewley Homes in Reading and east Challow. Other clients include Banner Homes, Coutts & Co, Urban Outfitters, and Porsche. Team head Andrew Davies and Paul Murray are recommended.
Pitmans recently acted in three cases relating to property contamination.
Pitmans’ client base is largely made up of housebuilders, but the firm also acts for international banks and retail clients. It advised Banner Homes on over 20 sites in the South East.
Pitmans’ lawyers have a ‘very good understanding of the market’, and provide an ‘exceptional’ service. The IT team is now four partners strong following Philip James’ recent arrival from Lewis Silkin LLP. The lawyers divide their time between London and Reading.
Pitmans is noted for its ‘rapid response times and creative commercial solutions’, and recently acted for Live Nation in a European Court of Justice trademark appeal. Practice head Jeremy Summers is recommended, as is Sally Britton; both divide their time between London and Reading.
Too good to be true
July 11th, 2012
Re-published from the Pitmans Times 2012
White collar business fraud in the UK sadly continues to be a by product of corporate life. Rather like car accidents or physical crime most of us think “it will never happen to me”. Fraud inevitably takes its victims by surprise and is often a tragic breach of trust by friends, co-workers or business collleagues who are well known to the victim.
Fraud is the betrayal of trust. Its prevention and detection requires transparency and accountability. As well as business checks and controls, it is important to use common sense and keep an open mind so when a fraud is discovered the business can move quickly to protect itself.
All businesses should have a risk management plan in place, or develop one immediately if they don’t. The initial 24 hour checklist should cover: business objectives for the outcome; an investigation team; possible suspension of the wrongdoer; evidence protected, gathered and assessed; insurance check and notification; and management of the publicity. Reporting fraud to a law enforcement agency may be required, but in itself may not lead to recovering any loss. But there are a range of civil recovery measures in place for that. The first step must be to protect the current position. A Court order can be obtained quickly to prevent transactions or to freeze assets. A search order allows entry into premises to look for, preserve and copy evidence.
Who should a claim for recovery be against? The perpetrator, or the party in possession? Or, maybe against the party who failed in their duty of care, such as a company director, auditor or professional adviser? A simple request for repayment in some cases may suffice. Otherwise, insolvency proceedings may be the most effective tool to use. A trustee in bankruptcy can be appointed and investigate the extent of wrongdoing, while a similar role can be played by an insolvency practitioner where a company is put into liquidation. Whatever options considered, always consult an expert legal team first.
Alan Shenton
Solicitor
T: 0207 634 4639
E: ashenton@pitmans.com
Lighting up the region
June 11th, 2012
Re-published from the Pitmans Times 2012
“As first class engineers, The Premier Group (TPG) are manufacturers of the Olympic and Paralympic torches for London 2012. Bus ask us about the legal side and we call in the experts. Suzanne Brooker has provided ‘top drawer’ legal services to TPG and has proved to be a valued member of team.
As manufacturers of such a prestigious and inconic symbol of the Games, we welcomed the legal knowledge, dedication and acommercial approach Suzanne afforded our team throughout both the contract negotiations and the production process.” – Denis Meagher, Managing Director, The Premier Group.
Suzanne Brooker
Partner
T: 0118 957 0516
E: sbrooker@pitmans.com
Cash is King
June 11th, 2012
Re-published from the Pitmans Times 2012
Keeping cash flowing is still the top priority for both small and large businesses – and for good reason. Without it companies struggle and it can undermine attempts at long-term business planning and forecasting.
With company liquidations increasing last year, there has never been a more important time to keep control of costs – and debt, claims Pitmans’ Debt Recovery expert Donna Goddard.
Donna says: ‘Many companies are finding that they now need to refer aged debts at 45-60 days instead of leaving them to hit 90-120 days as they may have done in the past. In today’s economy, leaving an aged debt 120 days will make it more difficult to recover. With a Debt Recovery team capable of acting as an extension of your own in-house credit control or accounts department, we are well placed to help you reshape your procedures and keep the money coming in.’
Pitmans offers not just a comprehensive but also a flexible service which can be tailored around the client’s individual needs. If you need to your improve cashflow or have any questions about debt recovery, we are always on hand to help.
Donna Goddard
Director
T: 0118 957 0507
E: dgoddard@pitmans.com
The business squeeze
June 8th, 2012
Re-published from the Pitmans Times 2012
Loans to UK companies have halved since 2007, says a new report. Research by business credit information provider, Graydon UK, shows that based on returns made to Companies House, 100,000 fewer business loans or mortgages were made in 2010 compared to the decade peak in 2007.
These facts bear out what businesses already know – that traditional forms of finance from the banks has become more difficult to obtain over the past four years. Yet the government has done much to encourage lenders and major high street banks have pledged to support the £40 billion National Loan Guarantee Scheme, which aims to encourage lending and ease credit to small and medium sized operators. Evidence of its success is awaited.
Specialist finance and business advice from professionals like the team at Pitmans is another way to access the expertise necessary to find creative ways to raise capital.
Pitmans’ Patrick Long says: ‘With senior debt criteria becoming more stringent, alternative methods of funding are attracting the attention of businesses who are looking to raise finance. However senior debt can still be accessed for companies who meet the criteria set by the banks providing meticulous accounts and records in order to help ease new protocols on bank loans. Painting an accurate picture of creditworthiness and business accounts will in itself help attract investment. There is a lot of goodwill (and money) out there, but it may need some planning and investment in time in order to benefit from it.’
Patrick Long
Partner
T: 0118 957 0488
E: plong@pitmans.com
For more information on the National Loan Guarantee Scheme, visit here.
Market analysis by Dennis Turner
June 6th, 2012
Re-published from the Pitmans Times 2012
How times change. In previous generations, two Chancellors, Jimmy Thomas and Hugh Dalton, were forced to resign because of indiscreet Budget leaks. Today, virtually everything of significance in George Osborne’s Budget was trailed in advance and there were few surprises on the day.
And it was not so long ago that the Budget was a significant economic event, justifying the huge media hype but the net effect of the Chancellor’s efforts was a difference of £470 billion this tax year in an economy worth around £1,500 billion. What the Bank of England does with interest rates is at least as important as what the Treasury does with taxes.
So much of the immediate reaction to the Budget is essentially political – who wins and who loses from changes to spending and taxes. With so little money at his disposal, this zero sum game means that anything given to one group had to be paid for by taking away from another. So the highest and lowest earners were deemed to be winners while middle England and pensioners were adjudged losers. For an economist, the Budget matters more for clues it gives into the government’s thinking on the pace and direction of activity.
Given that good news today is news that is not as bad as you were first expecting, Mr Osborne’s Budget had some fairly good economic news. He felt able to raise his growth forecast for 2012, still a relatively feeble 0.8%, but better than his forecast last November and much better than recession-bound Europe. The double dip recession may be upon us but output growth is strengthening as the year progresses and the prospect of 2-3% increases in GDP next year and beyond look achievable.
The growth the Chancellor is projecting, moreover, is ‘the right sort of growth’. If the UK is to avoid the excesses of boom and bust of recent years, the country needs to wean itself off the traditional dependence on households and governments spending (and borrowing) too much and devote more of the national resources to investing and exporting. The breakdown of Mr Osborne’s forecasts show this rebalancing has been factored in. And, if there is a success story in the British economy today, it is the corporate sector. While the personal and public sectors are locked in by debt, companies are sitting on a pile of cash they have been reluctant to spend. Some of his technical tax changes and the unexpected reduction in corporation tax show that Mr Osborne is looking for businesses to lead the economy forward and not the consumer.
Risks remain however. International events, such as more disruption in Europe or further surges in the oil price, could de-rail his plans. At home, he needs to get a tighter grip on his own spending to ensure the AAA credit rating is maintained. Whilst progressing towards a balanced budget and a sizeable drop in the ratio of national debt to GDP is painfully slow. Sticking to Plan A was the obvious course.
Unexciting and perhaps less significant than it used to be, the Budget nevertheless was the change for Mr Osborne to convince people his policies were fair, on the right track, and might inject some confidence into the business community. On balance, he didn’t do a bad job.
Dennis Turner, Economist
Thames Valley businesses geared up for gold in 2012
February 3rd, 2012
Courtesy of Thames Valley Business Magazine February 2012
What could 2012 offer you and your business? For many Thames Valley-based businesses, 2012 is a year for optimism, opportunity, growth and investment, writes Patrick Long, Banking & Finance Partner, Pitmans LLP.
Respondents to Pitmans “Funding your Business” Survey , conducted in December 2011, clearly felt the UK economy’s recovery would remain in recession for the majority of 2012, but it is against this backdrop that over 60% of Thames Valley based respondents said that they anticipate a year of steady growth in 2012. This is a marked contrast to respondents from businesses which lie outside of the Thames Valley region, who predominantly forecast trade at similar levels as 2011.
The Thames Valley has long been labelled the economic powerhouse of the UK, thanks largely to its diversity, strong skills based and excellent infrastructure – attracting top talent and global businesses from software, manufacturing, pharmaceutical, utility and construction sectors.
Click here to view the summary of Pitmans “Funding your Business” Survey.
For further information on the survey, please contact Pitmans Banking & Finance team.
Patrick Long
Partner
T: +44 (0) 118 957 0488
E: plong@pitmans.com