Business News Round Up (26/01/2023)
Scottish firms struggle with the cost of doing business crisis
The cost of doing business crisis remains the overriding concern for Scottish firms according to the latest Addleshaw Goddard Scottish Business Monitor report, which showed a glimmer of hope with overall business sentiment returning to positive territory after slipping into the red last year. Produced in partnership with the University of Strathclyde’s Fraser of Allander Institute, the 100th edition of the report – which was first carried out in 1998 – surveyed 400 firms from across the economy and found the net balance of all core business activity indicators in the final quarter of 2022 were negative, for the first time since early 2021. However, on average firms are slightly more optimistic about their expected volume of business over the next six months, while there were also positive net balances in expectations for the level of employment and turnover in the coming six months. There continues to be a negative net balance for expected capital investment and export activity and 75% of businesses expect growth in the Scottish economy to be weak or very weak over the coming year. Around 90% of businesses have seen their costs increase over the past year, many by more than 50%, and the price of energy continues to have a significant impact on activity, with almost half of the businesses expecting to reduce their operations this year due to higher energy bills.
Distress rates rise for North West firms
More than 57,000 North West businesses found themselves in ‘significant’ financial distress during the fourth quarter of 2022, according to the latest figures from Begbies Traynor’s Red Flag Alert. The North West saw the number of businesses struggling in Q4 of 2022 at 57,003, a 20 per cent rise from the same pre-pandemic period in 2019. In Greater Manchester, 24,717 firms remain in ‘significant’ financial distress and in Liverpool City Region the figure is 9,226. There was also an increase in levels of ‘critical’ financial distress with 286 firms in this predicament – a year-on-year increase of 20 per cent. When looking at the sector picture across the North West, support services had the highest volume of firms in ‘significant’ financial distress with 9,477. This was followed by real estate and property (8,218), construction (7,295), professional services (3,897), general retailers (3,763), telecoms (3,265), health and education (3,253), manufacturing (2,036), media (1,891) and bars and restaurants (1,864).
https://www.insidermedia.com/news/north-west/distress-rates-rise-for-north-west-firms
Scotland ‘buck international trends’ for VC investment in 2022
Scotland bucked international trends last year after a record-breaking £705m in venture capital was invested in scale-up companies. The nation’s level of VC support increased by 12 per cent year-on-year, against an overall 30 per cent decline in volumes across the UK, according to accountancy giant KPMG. The company’s latest Venture Pulse Survey revealed Scottish firms attracted £82m of VC investment across 34 deals in Q4 2022 – 15 per cent less than was invested during the same period in 2021. Despite the sluggish finish, 2022’s investment total of £705m surpassed 2021’s total of £626m which was the previous highest level on record. The figure shows a rising value of the average deal given overall volumes were down by five per cent year-on-year. Standout deals during the quarter include Forres-based spaceflight company Orbex securing £40.4m for its series C funding round, led by a new investor, the Scottish National Investment Bank as it counts down to the first vertical launch from UK soil. RoslinTech closed an £11m series A capital raise, led by life sciences investor Novo Holdings. The investment aims to fuel the company’s next wave of growth in its mission to become the leading provider of animal cell lines to the cultivated meat sector.
MAG announces £440m investment in final phase of £1.3bn Manchester Airport Transformation Programme
MAG (Manchester Airports Group) today announced a £440m investment in Manchester Airport that will create thousands of jobs and unlock billions of pounds of economic value for the North over the next decade. The investment will transform the passenger experience at the UK’s third largest airport, with new spacious facilities, state-of-the-art technology and equipment, and an exciting array of shops, bars, restaurants, and airport lounges. It will see Manchester Airport expand its role as the UK’s global gateway in the North, connecting the region to even more international destinations, including some of the world’s most important economic markets. The investment is the final phase of the £1.3bn Manchester Airport Transformation Programme (MAN-TP), first announced in 2015 with a 10-year vision to revolutionise the customer experience at the Northern hub and unlock the potential of its two full-length runways. The first phase saw Terminal 2 more than double in size, with the new facility having received positive feedback from passengers and airlines since opening in July 2021. This latest investment will complete the transformation of Terminal 2, delivering improvement to all stages of the passenger journey – from check-in to baggage reclaim – as well as upgrading its airfield to cater for next generation aircraft.