Business News Round Up (27/01/2022)
Half of investors think attractiveness of UK markets has improved but companies show less enthusiasm
There is an increasing disparity between investors and companies on how attractive UK markets are and how much they have improved over the last year, according to a joint report from Peel Hunt and the Quoted Companies Alliance (QCA).The ‘Eye of the Beholder’ report analyses the view of investors and companies on the UK financial markets and found that 50% of investors surveyed think that the attractiveness of UK markets has improved over the last 12 months, compared to only 30% of companies. In addition, 63% of investors viewed UK markets as attractive, but just 45% of companies said they see it in the same way. The QCA say the increasing difference of opinion is one that needs to be urgently addressed. “The bringing together of businesses and investors is a fundamental part of our economy and drives the creation of social wealth,” it noted. “The report shows that whilst markets worked well in 2021 from an investor’s point of view, the future health of our markets should not be taken for granted. Much more needs to be done and the QCA will be working hard to effect positive change.” Despite this difference of opinion, both investors and companies said the most frequently cited concern faced by small and mid-caps was around liquidity and supply chains.
BGF invests £60m in Scotland during 2021
BGF has reported that it invested close to £60m within the Scottish growth economy during 2021 – more than double the previous year’s figures. The long-term patient investor makes initial investments between £1m to £15m for a minority equity stake. Deals completed last year by BGF’s Scottish team took place across a range of sectors, from technology to healthcare to consumer goods, while also supporting companies from early-stage through to Initial Public Offering (IPO). It completed 67 new deals and invested £600m over the course of 2021 – a record year for the fund. BGF recently invested £8m in Edinburgh-headquartered luxury leather goods brand Strathberry to help scale the business in global markets; while Glasgow’s Kick ICT received £8.7m to support the firm’s growth plans, including acquisitions as the business expands across the UK.
https://www.insider.co.uk/news/bgf-invests-60m-scotland-during-26055787
UK employer confidence in the economy falls, but confidence in hiring remains robust
Employer confidence in the UK economy fell by 5% in the last quarter of 2021 to net -11, as the Omicron variant surged across the UK and worries over rising inflation and labour shortages continued. This was the second consecutive period that the barometer has been in negative territory, indicating that confidence is dropping, according to the Recruitment & Employment Confederation (REC)’s latest JobsOutlook survey. In contrast, employers’ confidence in making hiring and investment decisions remained positive at net: +9, indicating that hiring confidence levels were still increasing. The survey noted that employers’ intentions to hire temporary workers have spiked in recent months. Hiring intentions for temps in the short term increased by 15% to net: +30, and medium-term demand rose by 9% to net: +23.
Insolvencies surge as firms lose battle for survival
Company insolvencies in Scotland rose by 17.9% last year as many business owners lost the battle to continue trading through the pandemic. There were 704 liquidations and receiverships in 2021 compared with 597 in 2020. Richard Bathgate, chairman of insolvency and restructuring trade body R3 in Scotland, said: “The annual increase in corporate insolvencies has been driven by the rise in creditors’ voluntary liquidations, which indicates that many directors are making the decision to close their businesses after struggling for more than 18 months to trade through the uncertainty of the pandemic.” The ending of the furlough support scheme in September last year contributed to the 77% rise in corporate insolvencies in the three months October to December compared to the previous year.