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Top story
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Interest rates cut by 1.5 per cent
The Bank of England has cut interest rates by 1.5 percentage points to 3 per cent, its lowest level since 1955. In October it cut rates from 5 per cent to 4.5 per cent in an emergency move coordinated with other central banks. There has been widespread calls from North West business for a bold cut, although few expected more than 1 per cent. On Monday economist Professor Patrick Minford spoke in Manchester on the need for the UK to follow the lead of the US lead, saying: “The Fed has played a blinder”. John Daly, Tenon’s regional head of corporate finance, sounded a note of caution: “Today’s much needed reduction will help by easing pressure on existing borrowers rather than stimulating new lending. But new lending is the key that encourages the recovery of personal and business confidence but this is unlikely to get back into growth mode until mid 2009. Lower interest rates alone will not cure the banks’ lending hangovers that are likely to last for the next six months."
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Deals
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Massive appetite for acquisitions
Businesses in the north of England are still hungry for acquisitions, even in the current downturn. According to research by Investec’s growth and acquisition finance division, businesses with a turnover over £10m in the north are more likely to make acquisitions, with nearly a third of companies saying it was likely, compared to just 21 per cent in the south. Services companies are more likely to make acquisitions in the next 12 to 24 months, followed by distribution companies and manufacturing companies. The most popular source of funding is private equity. John Clifford of Investec, said: “A reduced appetite for lending amongst traditional banks is likely to have a profound effect on the ability of UK corporates to achieve their growth strategies over the next six months to a year; and possibly longer. Yet for good businesses, there will still be funding options available, particularly amongst the more niche mid-market lenders.”
More moves in IRC shares
Paul Dawes has increased his stake in Individual Restaurant Company (IRC), the parent group of Piccolino and Restaurant Bar & Grill, for the second time in a month. Dawes now holds just over 11 per cent of the business. Malcolm Walker, the founder of retailer Iceland, also upped his stake last week in the group to just over 3 per cent. IRC has expanded into new territories this year amid tough market conditions.
Birchall has the Upperedge
Manchester-born businessman Alan Birchall’s business, Upperedge, has acquired Van Der Made Beheer, a Dutch company that supplies potato products and ready meals to supermarkets, for €3.2m from previous owner Perkins Food Group. Its range complements existing products supplied by Country Chef, an associated company of Upperedge, based in Scunthorpe, which supplies potato products to the food service industry and supermarkets. Birchall, who was advised by accountancy firm CLB Coopers, said: “The factory in Holland manufactures quality products and there is a dedicated workforce, but there is surplus capacity and we therefore plan to expand production to service the demands of the UK market.” Funding for the deal was secured from IFN, a Dutch Bank.
Sportech boosts online strength
Liverpool-based pools operator Sportech has paid £600,000 for the football website 4thegame.com as it looks to build on an increased online profile resulting from its launch of The New Football Pools in August. 4thegame.com, a general website for football supporters acquired from Manchester-based Fast Web Media, attracts 700,000 unique monthly users. Sportech chief executive Ian Penrose said: “This is an important part of our strategy to increase the online visibility of the New Football Pools and engage with football fans from around the world.”
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Business
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Be big and bold on climate change, urges Gray
Bryan Gray, chairman of the Northwest Regional Development Agency, this morning said the North West needs to think bigger to gain an edge in addressing climate change. Speaking at the North West Climate Change conference at Liverpool’s BT Convention Centre, Gray said: “We need bigger and bolder plans than we’ve seen before and need to overcome the perception issue – businesses need to see the opportunities created by a low-carbon economy. The current downturn is a chance to refocus on less consumption, less waste and more investment in quality of life.” The conference will inform the region’s action plan for climate change beyond 2010. Other speakers included: Michael Kelly, chief scientific adviser in the Department for Communities and Local Government; Andy Togher, director of business relations at the Carbon Trust; and Paul Kelly, corporate affairs director at Asda.
Timber engineer in administration
Chorley-based Palgrave Brown, supplier of timber engineered products, has been placed into administration. Businesses restructuring partners at BDO Stoy Hayward have been appointed as administrators and are conducting a review. The company, which has a large customer base, has a national distribution network of 17 offices throughout the country, employing a total of 491 staff. BDO’s Dermot Power said: “Palgrave Brown is a casualty of the well-documented contraction of the construction and housebuilding industries. This sudden and steep downturn is at the centre of the company’s current difficulties.” The firm is working with interested parties to secure a sale of the business as a going concern. In 2002 Palgrave Brown was acquired for £30.6m in secondary buyout backed by Aberdeen Murray Johnstone Private Equity.
Anti-TIF group asks for a plan B
The Stop the Charge coalition has seized on the admission by Gordon Brown during Prime Minister’s Question Time yesterday that the government’s £1.5bn Transport Innovation Fund offer could remain on the table in the event of a No vote in December’s referendum. Graham Stringer MP said: “This shows the government will consider funding plan B or indeed C or D.” Paul Henly of the Federation of Small Businesses said: “We have always wanted to work with the Association of Greater Manchester Authorities on a scheme that better represents the needs of residents and businesses.”
BMI cuts Manchester
BMI has joined British Airways in cutting its transatlantic flights from Manchester Airport, saying that it has found the routes increasingly difficult to sustain. The airport stressed that transatlantic flights with other carriers remain committed to the city, following a mission by airport managing director Andrew Cornish with inward investment and tourism representatives to US airlines in October.
Chadwick expands range
Bury-based Chadwicks, which manufactures food and drink lids, is expanding into a new product, shrink-sleeves, the tight-fitting wrapping that surrounds many drinks bottles, after buying a selection of finishing equipment. The company, which employs more than 160 people, manufactures pre-cut lids for sectors including food, dairy and beverage and exports 50 per cent of its output. Chadwicks is part of the Clondalkin, a group of 40 companies specialising in packaging and products.
Water way to success
The Arvia water treatment process, which provides a low-cost and continuous way of cleaning water has scooped a major industry award. Developed by Arvia Technology, a clean technology spin-out company from The University of Manchester, the system won the Water Award in the Institution of Chemical Engineers’ Awards for Innovation and Excellence 2008. Arvia Technology was founded by Dr Nigel Brown and Dr Ted Roberts in early 2007 and opened for business in October at an incubator site.
Chambers call for more business help
Ahead of next week’s first meeting of the new Small Business Finance Forum, which will address the financial issues affecting small businesses, the British Chambers of Commerce (BCC) has released some of the key points it plans to bring to the table. BCC director-general David Frost, said. “The BCC has serious concerns about the availability of credit and the tightening of credit conditions for small businesses - if things carry on like this, many sound UK businesses will be bust by Christmas. The government has just spent billions bailing the banks out using taxpayers’ money. Surely it's not too much for small businesses to expect the right financial support.”
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Property
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PAG sells site to Zuber Issa
Property Alliance Group (PAG) has sold a site in Deeside, Flintshire, to Euro Garages, the ambitious Darwen-based service station group. The 2.5-acre site fronts Deeside Industrial Park and was sold for £1.275m following planning consent being granted to develop the site for a service station. PAG director Jonathan Mather said: “The site lends itself well to this use.” Euro Garages managing director Zuber Issa is the current Ernst & Young entrepreneur of the year for the northern region.
Braemar looks to the future
Property investment group Braemar has released its unaudited interim results for the six months to 30 September 2008. The Hale-based business has cut its losses from the same period in 2007 from £287,000 to £58,000, attributing the reduction to building turnover from £231,000 to £1.27m in both its operating divisions, fund management and property management. The group, which has prepared funds for farmland and student accommodation investment, said that it is pleased about “growing brand awareness” among financial intermediaries that it hopes will lead to credibility among financial institutions.
In House in the news
Warrington-based In House group has completed the acquisition of Avanti Properties, a business with a portfolio valued at £1,365,000. The group, which is active in lettings, broking and the break-up of portfolios for sale, also this week signed an agreement with Primegold Properties to manage 12 residential properties in Lancashire
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And finally
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New Insider out this week
The November issue of Insider features The Great Transport Debate, including a fiercely contested discussion between both sides of the Transport Innovation Fund fence and an exclusive interview with Sir Howard Bernstein, the scheme’s architect. There’s also an interview with JJB Sports chief executive Chris Ronnie and an insight into the future of manufacturing, while we examine where next for Liverpool after its Capital of Culture year. To subscribe to Insider, visit our online Shop.
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