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Top story
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North West slams “unsustainable” Budget
As the financial and business communities this morning digested Chancellor Alistair Darling’s Pre-Budget Report, the general mood in the North West was far from buoyant. “It’s a real live now and pay later budget,” said Robert Jackson, chief executive of Manchester-based Montpelier Chartered Accountants. “I'm not sure this level of debt will ever be paid back in my working lifetime. It is a third-world, meteoric debt level. If this was a business, it would be unsustainable.” Other commentators said it would be the New Year before the success of the changes announced yesterday could be judged. “Party politics got in the way of an important announcement, and it seems as if both Labour and the Conservatives have an eye on a possible election,” said Jo Sellick, managing director of financial and legal recruitment firm Sellick Partnership. “The deferral of increases in the small companies rate of corporation tax and the extension of carry-back relief for losses of up to £50,000, is a welcome measure. However, it is also important to keep up the momentum to reduce the main rate of corporation tax.”
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Deals
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What is an MBI?
With more and more businesses facing distressed turnaround situations, this month Insider’s online Deals Advice section brings you a new feature to explain management buy-ins (MBIs), a rare sight in the deals market that could, say advisers, become more prevalent as funders call for skills input at management level. “The real value for MBI teams is going to be in buying businesses shortly before or in an insolvency process because they’ll be paying very little for goodwill but getting a slimmed-down business,” says John Green, chief executive of accountancy and business advisory firm Pierce in Blackburn. To read more, visit our Deals Advice section and click on What is… an MBI?
JD takes JJB stake
Bury-based sports retailer JD Sports Fashion has taken a stake in North West rival JJB Sports by purchasing 25,058,100 shares at of 32.25 pence per share, giving it just over 10 per cent of the issued voting ordinary share capital of JJB. Described as a “strategic investment”, the deal marks Wigan-based JJB’s important position in the performance sports retail market, Meanwhile, JJB has received an bid from a potential buyer for its Fitness Clubs business, widely believed to be former JJB owner Dave Whelan.
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Business
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Cameron brands TIF a “bribe”
Conservative Party leader David Cameron flew in and out of Manchester in a private helicopter last night to blast the Pre-Budget Report as “depressing”, but he also waded into the local debate on the congestion charge by slamming the offer to Greater Manchester as a “bribe” and “not right”. His speech to Greater Manchester Chamber centred mainly on the economy and was the same as the one he delivered earlier that day to the CBI, but included a note of anger at the surprise rise in National Insurance: “This represents the end of the idea that taxation should encourage enterprise and I find that profoundly depressing.”
MAG sees profits slide
Manchester Airports Group (MAG), which was yesterday linked with a bid to buy Gatwick Airport, has seen its pre-tax profits tumble 41.7 per cent for the six months to 30 September to £38.4m as passenger numbers across its four airports fell 2.2 per cent to 16.6 million for the period. Turnover for the group, which operates Manchester, East Midlands, Bournemouth and Humberside Airports, also dropped 4.3 per cent to £217.3m. The group attributed the dip in performance to the challenging economic conditions, coupled with the closure of its baggage handling subsidiary Ringway Handling Services, which had made revenue of £7.8m in the same period last year. It added that the decline in pre-tax profit was because it had written down the value of investment properties by £17m and a land disposal in the previous period had generated £6.4m.
Torotrak on track
Despite the crisis in the vehicle manufacturing sector, Leyland-based transmission specialist Torotrak said it remains “securely positioned” after releasing its interim results for the six months to 30 September. The company has reported an 80 per cent increase in revenue for the period, up from £521,000 to £927,000. Losses have been reduced to £1.9m, down from £2.4m last year. Chief executive Dick Elsy said the improving results were thanks to a diversification strategy that has seen it move away from the passenger car market to focus on trucks and buses. It is also working with Tata Motors and exploring opportunities in the Formula 1 industry.
The burden of VAT cuts
Chancellor Alistair Darling’s much-leaked plans to cut VAT by 2.5 per cent have been widely derided for their minimal impact on prices for consumers. But professional advisers in the North West this morning expressed concern over the impact of the changes on businesses in the region. Christine Hewson, head of tax at KPMG in Manchester, said: “They will have to bear two sets of systems changes, when the rate goes down and then returns to 17.5 per cent in January 2010. These are expensive, time consuming and are coming at most businesses’ busiest time of year.” The cut in the VAT standard rate means the UK now has the lowest rate in the EU alongside Cyprus and Luxembourg, observed Barry Stocks, director of BTG Tax in Manchester, who added: “But, unlike these countries, the temporary nature of the cut means the UK will not see businesses relocating to the UK to take advantage of it. The real winners are the businesses and sectors that have major spending on goods and services and cannot recover all the VAT – such as the finance and insurance sector, universities, charities and health.” Meanwhile, northern supermarket chain Booths became one of the first retailers to announced a price cut as it prepares to allow its customers to benefit from the VAT cut four days early, from Thursday.
MediaCity move for 2ergo
AIM-listed 2ergo, Lancashire-based provider of mobile enabling technology, has announced a move to new headquarters in Salford Quays. Since its formation in 1999 the company has grown by 628 per cent in the past five years and is poised to transfer its worldwide headquarters to the Digital World Centre in the heart of MediaCity. The planned relocation in January follows landmarks earlier this year including the unveiling of a new identity, rebranding of its Americas arm and recruitment of a new senior management team.
Footfall up at Manchester Arndale
Despite the latest retail surveys pointing to more gloom on the high street, Manchester Arndale is bucking the trend after increasing footfall for the 80th month in a row. The centre, which is managed by PRUPIM on behalf of joint owners Prudential and Capital Shopping Centres, had 894,010 visitors during October, up 36.3 per cent on the previous month and 238,192 higher than the same period last year. Andrew Foulds, director of asset management at PRUPIM said: “Given the current economic climate, the performance flies in the face of analysts and experts.”
UK Fast named in global tech list
Manchester-based hosting provider UK Fast, which was named as one of the UK’s fastest-growing technology businesses in Deloitte’s Technology Fast 50 at the end of October, has been listed in the international InfoWorld 100, a list of 100 companies across the world that have made the best use of technology to enhance their business. It was the only hosting provider to be included in the list. “We’re concentrating on growth and we’re succeeding,” said managing director Lawrence Jones. “Business has never been better for us and the benefits are passed on to our clients.”
Think4 wins contract
IT specialist Think4 has been appointed to handle the IT servicing and sourcing needs for Manchester-based insurance broker Reich. The Heywood-based company first worked with Reich during its merger with WB Tidey earlier this year.
£2m skills fund launched
A new £2m fund has been launched in Cheshire and Warrington to help businesses access skills development and training in areas where there is no public funding. The fund, which will be administered by Cheshire & Warrington Economic Alliance (CWEA) on behalf of Cheshire Employer and Skills Development, will aim to improve the sharing of good practice and encourage companies to think about their long-term staffing needs.
Easy as one, two, three
Manchester-based mobile technology company Mobile Inspiration has signed a deal with network provider 3 to deliver TV and film-related content to 3’s UK customers. The deal, advised by law firm Brabner Chaffe Street, follows the signing of new partner contracts with the likes of Universal Music Publishing and EMI that allows it to distribute programmes such as Strictly Come Dancing and Top Gear to mobile handsets.
New faces on NWDA board
Three new appointments have been made to the board of the Northwest Regional Developments Agency. Anne Selby, chief executive of The Wildlife Trust for Lancashire, Manchester and Merseyside, Association of Greater Manchester Authorities chairman Lord Peter Smith and AstraZeneca’s vice-president of UK science affairs John Stageman will all take up their three-year appointments on 14 December. Meanwhile, Brenda Smith’s appointment has been extended for one year until 13 December 2009.
Football awards net events title
The Northwest Football Awards, which took place at the Midland Hotel in Manchester last week, has been named the Best New Event at the Eventia UK Awards 2008. The event was praised for its creativity, client endorsement and wow factor. Marcie Incarico, founder and chief executive of organiser Out There, said: “The concentration of football within the North West and its contributions to the regional economy and community should be recognised, and we are very pleased to be the agency doing just that.”
Tourism boost for Cumbria
Lowther Castle and Gardens in Penrith has secured a £9m funding package to help turn it into a major tourist attraction for Cumbria. The cash is being made available following a £7m investment by the Northwest Regional Development Agency and a further £2m from the Northwest European Regional Development Fund 2007-13. A further £6m is also being sought from the Heritage Lottery Fund, but the project is expected to continue regardless of the outcome of the bid, albeit on a smaller scale. The investment will allow the site to be opened to the public for the first time in more than 70 years and it is hoped it will contribute £10.4m to the Cumbrian economy.
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Property
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Changes not enough, says industry
The changes to empty rates legislation in the Pre-Budget Report don’t go far enough, say professionals. There will be a one year lifting of rates liability from April 2009 for buildings with a rateable value of less than £15,000. But Mark Radford, head of Jones Lang LaSalle’s regional rating team, said: “The government has listened to the property sector and reduced this unfair burden, but the changes do not go far enough. The changes will help most small businesses but not regeneration or redevelopment schemes.” David Cownie, a director at CB Richard Ellis, said: “The government’s attempts have fallen well short of the level of relief the property sector was hoping for.”
LSH appointed by Bury Council
The Manchester office of property consultancy Lambert Smith Hampton has been appointed to undertake an Affordable Housing Viability Study by Bury Council. The objective of the study is to examine the economic viability of a range of affordable housing requirements for different development types and tenure mixes for sites in the borough so the council can take a more informed view when setting policy through its Local Development Framework.
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