Business News Round Up (12/07/2022)
Private sector output in Scotland rises at slowest rate for five months as cost of living crisis bites
Business growth in the private sector in Scotland rose at its slowest rate in five months, a new survey has shown. The latest Royal Bank of Scotland PMI data showed combined manufacturing and service sector output stood at 54.4 in June, which was down from 55.9 in May. That was the slowest expansion in business activity across Scotland since January, the report said. The data showed new orders rose at a modest pace that was the weakest seen in 15 months. While business confidence at Scottish private sector firms remained strong in June, the degree of optimism slipped to a 20-month low last month amid concerns over the cost of living, a possible slowdown in the economy and housing market, and weaker customer confidence. Optimism across the Scottish private sector was also weaker than that seen across the UK as a whole. Private sector firms north of the border continued to expand their workforce numbers during June. The rate of job creation eased from May’s seven-month high but remained stronger than the series average. Of the 12 monitored UK regions, Scotland registered the weakest expansion in employment, while the North East of England was the only region to report job losses.
https://www.insider.co.uk/news/private-sector-output-scotland-rises-27450687
Northern PE market records deal value in excess of £460m
Dealmaking across the North of England has remained resilient in the first half of the year, with private equity houses completing more than 20 deals worth £461m in the last six months.Data from CMBOR, the centre for Private Equity and MBO Research and funded by Equistone Partners Europe as an exclusive sponsor, reveals that the total volume of deals completed in the North during this time surpasses those seen collectively across Scotland, Northern Ireland, and Wales for H1 2022. However, the total value of deals was “significantly” down compared with the same period in 2021, which recorded £12.2bn. This amount was skewed following notable acquisitions in that year. There were eight transactions completed in the North West in H1 2022 worth a cumulative £158m, an 88.9 per cent decrease on the £1.4bn seen during the same period in 2021. The region was fourth in the list of deal volumes across the UK, with London taking the lead in deal activity in 2022 with 22 completed deals to date. As for the wider UK, private equity demonstrated resilience across the board in the first six months of 2022, with 96 buyouts and an aggregate value of £19.7bn – the second highest H1 figure since 2007. TMT remained one of the UK’s most profitable sectors, attracting sizeable deals worth up to £6.2bn in the last six months. While financial services saw an 83.3 per cent decrease in deal value compared to 2021, there were some notable deals in the North West, including Vitruvian Partners £125m acquisition of International Finance Group. Another key completed transaction for the North West in H1 2022 was the sale of Stockport-based Interactive Investor for £1.5bn.
https://www.insidermedia.com/news/north-west/northern-pe-market-records-deal-value-in-excess-of-460m
Research shows rise in equity investment for Scottish businesses
New research published today by Scottish Enterprise (SE), 11 July 2022, reveals equity investment secured by Scottish businesses increased 36% to £690 million in 2021, up from £509 million in 2020. Based on Beauhurst data, the research looks at the performance of the Scottish equity investment market and compares with the other nations and regions of the UK. The 2021 Risk Capital Market report confirms that Scotland’s vibrant investment market is amongst the best performing across the nations and regions of the UK. Scotland is placed in the next best performing quartile outside of the ‘Golden Triangle’ of London, the South-East and East of England, for both deal numbers and amount raised. Strong growth was seen in the early stages in the under £10 million deal bracket, in addition to an increase in the number of Scottish companies raising larger investment rounds above £10 million. These include Amphista Therapeutics £38.1 million, Enough (formerly 3FBio) £35.9 million and Build a Rocket Boy £36 million. Kerry Sharp, Director of Entrepreneurship and Investment at Scottish Enterprise, said: “This latest research is hugely encouraging and shows that the Scottish market continues to grow thanks to a diverse mix of investors who are working collaboratively to channel more funding into innovative young companies.”
£20m commitment to help region’s SMEs with growth potential
A commitment of £20m to fund SMEs across the region has been delivered. British Business Investments made the pledge for TDC’s (previously Tosca Debt Capital) Impact Fund, which focuses on supporting entrepreneur-led smaller businesses looking to grow and create employment following the adverse pressures of the pandemic. TDC achieved a first close of the fund of £40m and is targeting a hard cap of £50m. British Business Investments, a wholly-owned commercial subsidiary of the British Business Bank, aims to increase the supply and diversity of finance for smaller businesses across the UK by boosting the lending capacity of a range of finance providers. Since it was established in 2014, British Business Investments has committed more than £3bn to providers of finance to UK smaller businesses. Predominantly supporting Northern businesses, TDC’s Impact Fund lends between £1m-£5m to smaller businesses that will create jobs as a result of investment. The sector-agnostic fund, led by Vicki Daly and Gary Davison, aims to utilise the experience, networks, and skill base of TDC to support the development of smaller businesses which would otherwise be unable to access capital to grow.