Business News Round Up (30/01/2023)

UK company profit warnings spike 50% in 2022

Profit warnings from UK-listed companies spiked by 50% last year, as surging inflation and falling consumer confidence ate into margins.17.7% of the UK’s 1,193 listed businesses issued a profit warning throughout 2022, equal to the proportion who did so during the 2008 global financial crisis, analysis by EY Parthenon has revealed. According to EY-Parthenon’s latest Profit Warnings report, consumer-facing sectors were particularly hard hit, with 36% of UK-listed companies in consumer sectors issuing a profit warning during the year, up from a fifth in the year before. Within consumer sectors, profit warnings came from 48% of FTSE retailers, 60% of FTSE personal care, drug and grocery stores companies and 30% of FTSE food producers, with the latter reaching a 16-year high. FTSE retailers issued the highest number of warnings throughout the year at 36, followed by FTSE travel and leisure (25), FTSE software and computer services (18), FTSE industrial support services (17) and FTSE personal care, drug, and grocery stores. The research also found that out of the 305 profit warnings issued, half (152) were issued due to rising costs, double the share of 2021. In the last quarter of the year, 83 profit warnings were issued, with 41% of citing rising costs, 24% delayed or cancelled contracts, and 20% weaker consumer confidence. Meanwhile, 11% of profits warnings cited “credit tightening” as a factor, the highest level since the global financial crisis, indicating that rising interest rates are already starting to slow the economy.

https://www.investmentweek.co.uk/news/4066254/uk-company-profit-warnings-spike-2022

North West business confidence highest in the UK, latest barometer reading reveals

Business confidence in the North West rose eight points during January to 48%, the highest in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking. Companies in the North West reported higher confidence in their own business prospects month-on-month, up two points at 52%. When taken alongside their optimism in the economy, up 13 points to 42%, this gives a headline confidence reading of 48%. North West businesses identified their top target areas for growth in the next six months as diversifying into adjacent markets (48%), investing in training and development (34%) and evolving their product and service offer (33%). The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. A net balance of 34% of businesses in the region expect to increase staff levels over the next year, up one point on last month. Overall, UK business confidence climbed in January, with firms reporting their highest confidence levels since July last year. Business confidence increased by five points to 22% and the net balance of businesses feeling optimistic about the economy doubled on December’s reading to 16%.

Women-led business ‘continue to lose out on public procurement’

Women’s Enterprise Scotland (WES) has warned that women-led businesses continue to lose out on public sector contracts. The warning comes as WES prepares to launch its bi-annual survey of Scotland’s women-owned and women-led businesses. It also comes prior to this week’s Business in the Parliament, when WES will lead the session on procurement. The annual report from the Cross Party Group on Women in Enterprise covers the topics that were reviewed during its 2022 schedule of meetings. A key theme raised by a range of women business owners was the procurement process and the barriers to making a successful tender that are faced by SMEs and micro businesses, many of which are led by women. Evidence delivered by the Federation of Small Businesses revealed that despite making up 93% of the entire business community, micro businesses receive less than 5% of procurement spend by value. With the majority of SMEs and microbusinesses being women-led, the result is a lack of opportunity for these businesses to engage in the public sector procurement process, WES argued.

https://www.insider.co.uk/news/women-led-business-continue-lose-29082609

GMPF invests £100m in sustainable levelling up

The Greater Manchester Pension Fund has committed a further £100m into a strategy to boost innovation and high-skilled jobs in the North West. Gresham House’s Sustainable Infrastructure (BSIF) strategy will help accelerate the deployment of profitable, new ideas to address key environmental and societal challenges in the North West, and support levelling up throughout the UK. GMPF, which is the largest fund in the Local Government Pension Scheme, will gain greater exposure to innovative ideas and technologies including vertical farming, biodiversity net gain (BNG) credits, and low-carbon biofuel production in the North West and beyond. Having worked in partnership since 2019, Gresham House and GMPF’s original North West Fund co-investment has already been successfully committed. It has helped to create more than 215 highly skilled new jobs in the region, as well as supporting more than 1,650 new careers throughout the UK.  Other benefits to the region include connecting more than 100,000 homes and businesses to full-fibre broadband, as well as creating thousands of acres of new biodiversity habitats and by growing leafy greens using up to 1,900x less carbon than imported field-grown crops.

https://www.insidermedia.com/news/north-west/gmpf-invests-100m-in-sustainable-levelling-up