Business output expands in the region for first time since last summer
Business activity in the East rose for the first time in six months in December and the outlook for 2024 remains positive despite electoral uncertainty according to a closely-watched survey of purchasing managers. The NatWest East of England PMI business activity index rose in December above the no-change mark of 50.0, up from 49 in November and signalling renewed growth. Firms raised growth mainly by completing outstanding business and businesses are hoping for a boost to demand from lower inflation and eventual interest rate cuts. The survey said: ‘confidence was much stronger than it had been in December 2022, and was broadly in line with the long-run trend since 2012.’ Meanwhile, the rate at which new orders fell slowed noticeably since November with manufacturers reporting a sharper decline in new orders than service providers. Price pressures picked up further in December but stayed well below the trends since 2021. Rashel Chowdhury, NatWest Midlands and East regional board, said: “There was some cheer in the final batch of PMI data for 2023 as output rose for the first time in six months and new business intakes showed signs of stabilising. With inflation falling faster than expected, companies are optimistic of a take-off in demand in 2024 once interest rates start to decline, although there could be turbulence from the looming General Election. That said, workloads are still heavily supported by the completing of outstanding business, and private sector employment fell again. Moreover, both price indices rose further in December, raising a question mark over how quickly wider inflation will fall in the coming months.”
Rise in start-ups ‘sows seeds of recovery’
A sharp rise in start-ups in East Anglia and a fall in insolvencies are ‘sowing the seeds for economic growth’ in the region, according to the Eastern branch of R3. It says there were 6,524 businesses set up in East Anglia in December, 30 percent up on the month a year earlier and the largest number outside London. Levels of debts owed by businesses in liquidation in the region also fell by 14 per cent in December compared to November and were down by a similar level on a year ago. Insolvency-related activity in East Anglia – which includes liquidator and administrator appointments as well as creditors’ meetings – fell by 15 per cent in December compared to the previous month. R3 Eastern chair Hayley Watson, associate director of McTear Williams & Wood, said: “These are encouraging statistics and are welcome reading at a time when local companies are facing significant and longstanding economic challenges.” But she added: “We should be in no doubt, however, that a sizeable percentage of our region’s businesses continue to struggle, and we are very likely to see corporate insolvencies rise in the coming months. The focus now has to be on maintaining these positive figures over the longer term, stimulating further growth and facilitating recovery for those businesses which are struggling.”
Cambridge-based medtech consultancy acquired by Germany-based group
Cambridge-based Springboard Pro, a medtech device consultancy, has been sold to a Germany-based global group backed by a private equity investor in a deal facilitated by Prism Corporate Broking. Founded in 2013, Springboard specialise in developing devices from initial concept through to manufacture, for regulated markets such as medical, drug delivery and biotech. It is being acquired by a global healthcare packaging and medical device manufacturer, Sanner Group, which is backed by a healthcare private equity investor, GHO Capital. Sanner employs over 600 people and has manufacturing plants across Germany, France, Hungary and China. The acquisition of Springboard will boost Sanner Group’s in-house medical device development capabilities and see a new design centre of excellence set up in the UK. Peter Watson, managing director of Prism – which is based near Cambridge – said: “Springboard’s co-founders Tom Oakley and Keith Turner have developed an outstanding business, with at its heart a highly skilled team backed by a strong ethos. The strategic and cultural fit with Sanner is excellent.”
Photo: Springboard co-founders: Tom Oakley and Keith Turner
Employers urged to get documents in orders as fines for illegal workers triple
Restaurants and other businesses in the region have been warned to get employee right to work documents in order before fines for illegal workers triple. From 22nd January, employers will face initial fines of up to £45,000 per illegal worker – up from the current £15,000. For employees in repeat breaches, the fine is tripling from £20,000 to £60,000. Latest figures show that between January and March last year employers in the Midlands and Eastern England received 86 penalties for illegal workers and fines totalling £1.8 million, the highest in the UK. Sohan Sidhu (photo, right), partner and head of immigration for Ellisons Solicitors, said: “Employers need to be extremely vigilant, especially as civil penalties are not the only consequence for an employer found to be employing illegal workers. If the employer holds a Home Office sponsor licence, the Home Office has the power to revoke or suspend the licence. It is also a criminal offence if an employer knows, or has reasonable cause to believe, they are employing an illegal worker. A conviction can lead to imprisonment and/or an unlimited fine.”
Welcome for new inward investment measures at Freeport East
Freeport East has welcomed a series of 50 new government measures to boost support for inward investment, trade, and job creation. The new Freeports Delivery Roadmap includes measures on transport planning, energy infrastructure, skills support and innovation funding, alongside a new £150m fund for business investments in freeports and investment zones. It follows the government’s recent proposal to extend tax reliefs to 2031 on freeport development sites. Freeport East – which offers tax breaks and investment incentivess at sites centred on the ports of Felixstowe and Harwich and Gateway 14 in Stowmarket- has attracted significant interest. This includes a £200m facility for the Range at Gateway 14 now completed and Scottish Power planning the development of a multi-hundred MW, £150m green hydrogen production facility at the Port of Felixstowe. Steve Beel, chief executive of Freeport East, said: “The new commitments in the roadmap come at an important time for us. As our progress with inward investment continues, we are keen to ensure we see the wider changes needed to maximise the full potential of Freeport East.”
Three promotions at corporate finance adviser
Forward Corporate Finance has made three promotions across its team; Amie Goodlad and Will Neill to corporate finance manager and Amy Hochuli to corporate finance associate (photo, right). Since founding Forward in 2017, Sarah Moores and Rob Dukelow-Smith have built the business into a well-respected advisor in the East of England, advising on business sales, management buyouts, private equity transactions and acquisitions. Recent deals include advising IBC Simply on the acquisition of March Foods with debt provided by Allica Bank, the sale of Compliance Labelling to European-based Asteria Group and the support of Horizon-backed Dains Accountants on acquisitions. Rob Dukelow-Smith added: “We work on life-changing events for our clients. We sit with them from the start to the finish, making sure they are prepared, negotiating with buyers, investors or lenders, and supporting them through due diligence to completion. We work closely with our clients every step of the way, and with Amie, Will and Amy they are in very safe hands.” After a challenging year for transactions in 2023, Forward is aiming for further growth and will look to add a further team member during 2024.
