Business News Round Up (03/11/2023)
UK listed profit warnings fall year-on-year for first time since 2021
Profit warnings issued by UK-listed companies has fallen year on year, for the first time since 2021. A growing number of warnings cited tougher borrowing conditions, however, suggesting that further hikes in interest may trigger further turbulence across the national economy. Every quarter, Big Four firm examines the number of profit warnings issued by UK-listed firms, to give an indication of the health of the economy. For the last seven quarters, that has seen EY declare a year-on-year increase in the number of businesses cautioning at muted trading figures and falling profits – the longest run of such news since 2008’s Great Recession. For the first time since 2021, however, EY has found that profit warnings have fallen year-on-year.
Scottish SMEs struggle for productivity amid escalating costs
Scottish small to medium-sized enterprises (SMEs) are still bearing the brunt of increasing operational and supply chain costs, which is seeing many unable to invest in growth. Business lender Simply Asset Finance commissioned to survey 796 SME business leaders in the UK last month, finding that while increasing inflation and interest rates (75%) remain key concerns, rising operational (79%) and supply chain (76%) costs top the list for Scottish SMEs. Elsewhere, productivity (60%) also remains a key issue, with many SMEs being unable to solve this due to rising costs. This is evidenced by the fact that a quarter (26%) of Scottish businesses have had to overhaul their finances in the past year, but just 9% said this was to help expand the business.
https://www.insider.co.uk/news/scottish-smes-struggle-productivity-amid-31349836
Storms deliver ‘miserable start’ to festive trade
Prolonged wet weather took a heavy toll on Scotland’s shops just as retailers were hoping for a pre-Christmas uplift. Shopper footfall last month was 6.5% down on September, and 5.5% on October 2022, according to figures supplied by the Scottish Retail Consortium (SRC). The latest regular SRC-Sensormatic IQ data reveals the fall in Scotland was larger than south of the border, where footfall was down 5.3% in October. The figures also show the number of Scots visiting shopping centres fell 2.7% in October compared with the same month last year. However, the numbers were patchy with Edinburgh enjoying a 0.5% uplift – making it the best performing city in the UK – while in Glasgow, shopper numbers were down 8.9%.
https://dailybusinessgroup.co.uk/2023/11/storms-deliver-miserable-start-to-festive-trade/
More firms likely to fail as creditor turn up heat
Company failures in Scotland could rise sharply as creditors take a tougher approach to recovering payment. Although the number filing for administration in the third quarter rose by just two firms to 11 compared to last year, it was indicative of a UK wide trend which saw 330 companies fail, up from 276 in 2022. Restructuring specialist Interpath Advisory said it is further evidence that insolvency activity is now back to pre-pandemic levels following the record lows seen during 2020 and 2021. Alistair McAlinden, managing director and head of Interpath in Scotland, said: “The number of insolvencies continues to creep up, but nevertheless, remains around pre-pandemic levels. Indeed, if we look at the pattern of activity since the start of 2023, we’ve seen a steady and incremental uplift over the course of this year, rather than the sudden deluge many expected.
https://dailybusinessgroup.co.uk/2023/11/fear-of-surge-in-failures-as-creditors-turn-up-heat/