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Top story
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Time to face up to reality
North West directors need to act now to manage cash and keep financial backers on side in the face of tighter economic conditions. Speaking at Halliwells' annual corporate recovery and turnaround conference in Manchester yesterday, Anup Shah, partner in corporate finance at Deloitte, called for a renewed sense of focus from business leaders if they are to avoid a headlong slide into administration. "These are difficult times and nothing is more important than cash. For those managing directors who claim to manage cash well, I'd say âyes, but in yesterday's world'," he said. "Banks will not be able to support every problem company on their books. You have to keep stakeholders informed so you can build areas of consensus. How you respond at the moment will go a long way to determining the support you will get." Shah also cited the example of Lehman Brothers' rejecting an offer for the business six weeks prior to its collapse. "Humility is not normally regarded as a strength of a chief executive - now it is vital," he said.
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Deals
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Cash for communications
Bury-based communications outfit Pennine Telecom has secured a £750,000 funding package from The Royal Bank of Scotland to support its expansion efforts. Established in 1976, Pennine supplies, installs and maintains telephone systems, two-way radio and mobile cellular systems. Managing director Andrew Roberts and his senior management team took over Pennine following a management buyout in 2003. Since then sales have increased to £6.2m and the company has secured new contracts including the maintenance of Bury Metropolitan Borough Council's telephone system.
Injecting a future
Chorley-based MI Diesel Products, which supplies fuel injection equipment, has changed hands after its parent company was acquired by Wembley-based Euro Car Parts. Pinco 1555 - more commonly known as LSUK - and its 53 branches have been bought, together with subsidiaries MI Diesel Products, Protech Automotive (UK) and Yeovil Rewind. After a competitive bidding process the acquisition was completed in just 48 hours and offers a sign that consolidation in the car parts market will provide some resilience in the current climate.
Expansion funding for Stroud
Stroud Engineering Supplies, a Knowsley-based supplier of heating and mechanical equipment, has expanded its headquarters with a £200,000 financing package from NatWest. The company has purchased a new unit next to its existing base on Knowsley Industrial Park to increase its storage and warehouse capacity. Established in 1996, Stroud supplies pipeline heating and mechanical equipment including tubes, valves, flanges, pumps and instrumentation equipment.
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Business
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Staff to be cut at Cobbetts
Up to 40 fee-earners are expected to lose their jobs at law firm Cobbetts after the company announced a consultation period across its Leeds, Birmingham and Manchester offices. Managing partner Michael Shaw said: "While this has been a very difficult decision for the firm, it is an essential move in response to our changing economy. Flexibility is key for those firms intending to preserve their business in the coming months, until we begin to see economic recovery." Cobbetts employs 740 staff and is yet to confirm which practice areas will be affected. The news follows a similar move by Halliwells last week, which is also due to axe 40 staff from its national real estate division following a downturn in the property market.
Tourism body backs TIF proposals
Visit Manchester has said that the introduction of a multi-mode integrated ticketing system, like London's Oyster Card, to service a revolutionised public transport system, would help take tourism in the city to the next level. The organisation has thrown its weight behind the new transport proposals by joining United City, the alliance of businesses from across Greater Manchester supporting the Transport Innovation Fund bid. A report by the organisation states that transport is a key area for investment if Greater Manchester is to evolve as an international destination for tourists and business visitors and that London's congestion charge has been of net benefit to key tourism sectors.
What now for Ascribe?
Bolton-based supplier of IT systems to the medical sector Ascribe has proved its worth against a fluctuating share price with pre-tax profits up 28 per cent on last year. The company has also increased revenues by 14 per cent to £17.4m and improved earnings per share by 20 per cent to 2.49p. In August the management team at Ascribe confirmed it was in talks to take the company private and has since acquired the healthcare division of WCI Consulting. Ascribe is currently trading at 23.5p following a year high of 45.5p.
Insurance hikes expected
There are concerns that corporate insurance premiums could increase sharply over the next 12 to 18 months as current rating levels do not accurately reflect underlying risks. According to Robert Cholmondeley, director of Preston and Sheffield-based Taylor Patterson Corporate Insurance, pressure on insurers from adverse weather and cost inflation increasing faster than the Retail Price Index, could also see a return to 30 per cent-plus increases, as witnessed in the market conditions of 2002/03. He said: "It is likely that liability and motor premiums will go up, especially for those businesses whose house is not in order."
MKM enjoys acquisition boost
Marketing services group MKM, the Timperley-based business that made two acquisitions in Australia and London last year, is enjoying its status as a larger business with broader geographic reach and a strong market offering. The AIM-quoted group released its results for the year to the end of March today, in which pro forma revenue of the combined business was £10.3m and operating profit was £686,000. Executive chairman Andrew Johnson said: "Whilst it has taken longer to achieve our targets than we had hoped at the time of the acquisitions, we now have a good platform upon which to grow, with an emphasis on recurring revenues."
Reality check from Redmond at business summit
At the start of the long-awaited Liverpool Summit this morning, an otherwise downbeat session on the economy was enlivened by the languid Scouse wit of Professor Phil Redmond, deputy chairman of the Liverpool Culture Company. The opening panel discussion on leadership, held in front of 400 people, was chaired by Will Hutton, chief executive of the Work Foundation, and also featured Liverpool Vision chairman Mike Parker. Commenting on a potential crisis in manufacturing, Redmond said: "Ninety per cent of manufactured goods is stuff you don't really need anyway." Asked what leadership strategies would help businesses out of a potential slump, Redmond quipped: "Intuition." Delegates at the BT Convention Centre were then treated to an expansive presentation from business guru Professor Michael Porter of Harvard Business School on strategies for profit maximisation.
Mortgage crisis hits Sterling Green
Sterling Green Group, the Manchester-based debt management company, has recorded a loss of £1.65m for the 15-month period ended 31 March. Turnover was £1.3m on 11 months of trading, of which £970,000 came from debt management services and £339,000 from mortgage business. Formerly known as Hamilton Partners until its acquisition of Sterling Green in April 2007, the group is suffering under the strain of uncertain financial markets. "The group has reduced the scale of its mortgage operation in recent months and as a result of these actions the division is now operating profitably," said chairman Michael Edelson. "The operational losses have fallen significantly in the last three months and the board anticipates that the group will begin to operate profitably on a monthly basis in the short term."
New faces on crop technology board
Preston-based Plant Impact, developer of technologies that improve crop productivity, has appointed two non-executive directors to its board. David McNeilly has over 42 years' experience in life science-related businesses, including 32 years with the DuPont Co. Edward Sharkey has spent the majority of his career in the agro-chemical industry. William Thompson, previously a non-executive director, has taken on the role of chief operating officer.
Businesses fail to round up bad debt
Only 24 per cent of small and medium-sized enterprises take any legal action to recover bad debt for fear of the negative impact on relationships with clients, despite losing revenue as a result of non-paying clients. A survey of 300 UK businesses by Cattles Invoice Finance found that growing businesses have lost £11bn to bad debt over the past year. While 77 per cent of businesses were aware that they had a legal right to charge debtors a percentage on unpaid invoices, less than one in four were willing to do so.
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Property
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TEG signs at Buckshaw
The TEG Group has signed a deal to take 4,531 sq ft of office space at the Buckshaw Office Park within the Buckshaw Village scheme near Chorley. The expanding company will move from Bamber Bridge and has agreed a ten-year lease with landlord Westmarch Investments. Founded locally in 1995, TEG designs and installs plant and equipment for the composting of organic wastes.
An addition for Claremont
Claremont Group Interiors has been appointed to complete the design and fit-out of the reception and showroom at branding and promotion consultancy Brand Addition's Manchester office in Trafford Park. Brand Addition, the new name for 4imprint Corporate Sales, has recently undergone a global makeover, emerging with a new brand identity.
Farm prices hit by housing downturn
The farmland market in the North West is feeling the effect of falling house prices, according to real estate advisory Smiths Gore, because 70 per cent of farms sold have houses or buildings included. Between July and September average farmland prices in England fell 5 per cent, from £7,300 per acre a year ago to £6,900 per acre, with more farms on the market. Although prices dropped across the country, prices in the North West and Yorkshire suffered particularly - livestock farm values have fallen largely because they are equipped with traditional houses. But bare land prices have not been affected and lenders still view farming as a secure, well capitalised sector, said Smiths Gore.
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