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July 30, 2020

Only a third of businesses fully confident of retaining furloughed staff

  • With the furlough scheme drawing to a close in October, a surge in unemployment is on the cards. Only a third of businesses said that they would definitely retain all of their furloughed staff, while nearly one in five (18%) indicated that they would not be doing so.
  • Business conditions continued to improve in July, but only at a modest pace. Businesses’ profits are 26% lower than would have been expected were it not for the coronavirus crisis. This is only a slight improvement on the 29% figure recorded at the height of lockdown in mid-April.
  • The continued easing of lockdown restrictions contributed to an uptick in business sentiment. The share of businesses with a positive assessment of current trading conditions (34%) is now similar to the share with a negative assessment (35%).
  • Despite the reopening of the hospitality sector on July 4th, 80% of businesses in this sector had a negative assessment of current trading conditions in the latest survey (carried out between 9th July and 15th July). This suggests that for most pubs, restaurants and hotels, social distancing requirements, low numbers of tourists and many people’s reluctance to venture out mean that the business remains tough.

James Endersby, CEO at Opinium said “Britain’s businesses are clearly eager to get back to normal trading as soon as possible and most of the business community have responded positively to the government’s initial measures to get the economy moving again. Nevertheless, profits are still stubbornly down, and a sizable minority are still facing a serious threat of insolvency. This has left most business leaders still very much holding their breath, waiting to see if reality meets the hopes that consumers will return to spending in large numbers next month.”

Pablo Shah, senior economist at Cebr said “Economic conditions continued to improve in July, as further lifting of lockdown restrictions were met by a brightening of sentiment and reduction in insolvency risks.

However, a concerning finding is that profits remained 26% down due to the coronavirus pandemic in early July, which is only a marginal improvement compared to the height of lockdown.

“Since March, many businesses have engaged in the fight of their lives to survive the unprecedent deterioration of trading conditions brought about by the coronavirus crisis. For many households however, the true test will come towards the end of the year as government support – most importantly the furlough scheme – is gradually withdrawn. While businesses remain broadly supportive of the government’s economicresponse, only a minority feel the £1,000 job retention bonus is the right path forward.”

Business Distress Tracker – full findings
Business insolvency risks

The gradual re-opening of the economy continued in July, most significantly with the re-opening of the hospitality sector on July 4th. However, the road ahead is littered with obstacles, and more than a third (36%, or 1.9 million) of businesses still feel there is a risk they will enter insolvency as a result of coronavirus-related disruption.[1] This includes more than one in twenty (6%) of firms that say there is a high risk of being forced to close permanently as a result of the coronavirus crisis.

Figure 1 Risk of entering insolvency as a result of coronavirus-related disruption

Employment impacts
The latest instalment of the Opinium-Cebr Business Distress Tracker has uncovered a positive shift in the ways in which businesses are dealing with the global pandemic. Here, the proportion of workers facing furlough has dropped considerably from 30% two weeks ago to 23%. This change is further boosted by the fact that businesses do not appear to be offsetting this return to work with cuts elsewhere – there has only been a very slight increase in the percentage of workers who have had their hours reduced (27% increasing to 28%) and no change in the amount facing salary/wage cuts (remaining at 29%).

Business activity rates
The measure of economic activity provided by the Opinium-Cebr Business Distress Tracker has so far proved itself to be among the most accurate real-time measures of output, available several weeks before official data releases. It is therefore a significant cause for concern that despite the re-opening of key sectors such as retail and hospitality, businesses’ profits remain on average 26% below where they would have been were it not for the coronavirus crisis. This is only slightly better than the 29% slump in profits during the height of lockdown.

Economic recovery
Businesses’ expected recovery times appear to have plateaued in recent weeks. In the latest wave of the tracker, businesses said on average that they would need 34 weeks after the lifting of restrictions to return to their pre-crisis levels of production. This is unchanged from the previous two waves of the Business Distress Tracker.

Figure 2 Cumulative share of businesses that have returned to pre-crisis production

July 29, 2020

Southern Grove unveils £4.5m development of London mews houses

Developer Southern Grove today unveils a £4.5m pilot development of mews houses in a popular residential area of north London.

The scheme in leafy Finchley, called Granville Mews, will provide six townhouses benefiting from a communal courtyard and spacious three-bed, five-person accommodation.

Most developers avoid small sites because they feel they don’t deliver a great enough economy of scale. However, Southern Grove believes that the sheer number of smaller infill sites in the capital represents a huge opportunity to increase the provision of family housing. The company will be announcing plans for a series of other infill sites later this year.

Granville Mews, located in High Rd, will replace a branch of Buildbase on a corner plot in an area that is extremely popular with young professionals and families. Finchley has built a reputation as a quiet corner of London covered in peaceful Victorian and Edwardian terraces.

Sheffield-based Axis Architecture have designed the scheme, for which a planning application was submitted yesterday (Tues) to Barnet Council. A construction partner has yet to be chosen.

News of the scheme comes as the company continues to progress large-scale residential developments of apartments, featuring hundreds of affordable homes.

Tom Slingsby, CEO of developer Southern Grove, commented:

“This is an exciting pilot project for us. Smaller parcels of land are unappealing to most big developers because they prefer the simplicity of single, large schemes that offer an easily defined economy of scale.
“We think that’s the wrong way to look at infill sites. We believe they offer valuable opportunities to regenerate residential areas and increase housing stock.

“London is littered with infill sites and, if you add them all together, they represent a huge bank of land that is either undeveloped or in need of regeneration. A greater number of them will be needed to build housing at scale but the speed at which they can traverse the planning process makes up for this.

“They represent a largely untapped opportunity to provide substantial amounts of new housing in London and we will be exploring how we can expand our use of them. All developers should be trying to exploit infill sites to make best use of areas that are already substantially urban.”

July 29, 2020

Production kicks off again at football scarf manufacturer

A Leicestershire manufacturer that supplies scarves, hats and memorabilia to all 20 Premier League football teams has resumed full operations after calling full-time on its coronavirus lockdown, with support from Lloyds Bank.

Brookes Jordan, Europe’s largest producer of football scarves, netted a six-figure loan from Lloyds Bank as part of the government’s Coronavirus Business Interruption Loan Scheme (CBILS) to support the business after the pandemic halted production at its factory in Barwell, on the outskirts of Leicestershire.

The Brookes Jordan team will be returning at full strength after the support package enabled the firm to secure the jobs of all 65 employees at its Barwell site. The business has also remained committed to ensuring the wellbeing of all its staff throughout this time, and ensuring that the site is a safe environment for them to return to work.

Now, following the easing of restrictions, the loan has helped the firm get the ball rolling again to quickly meet growing demand following the return of the Premier League and other sporting competitions around the world. The business is once again exporting its products to European football teams and leading NBA and NFL sides in the United States. In total, exports account for around 10 per cent of the business’ income.

With the 2020/21 football season also on the horizon, the firm is anticipating a growing order book and is preparing to introduce new products, including a snood, which can be used as a face covering as well as helping sports fans to stay warm during the winter months.

Trudy Doyle, director at Brookes Jordan, said: “We’re proud of our role in the local community here in Barwell, so it was a priority for us to ensure that we were able to keep all of our staff together. The funding we received made this possible and we’ve been able to resume production of our high-quality, locally-made goods to help fly the flag for British manufacturers across the globe.

“The support and guidance that the Lloyds Bank team provided has been vital in helping us to navigate this turbulent period. We look forward to developing our relationship with them as we continue towards recovery.”

Noshad Khowaja, relationship manager at Lloyds Bank, said: “Brookes Jordan is an excellent example of a British manufacturer that has enjoyed significant growth both at home and abroad in recent years. Like many businesses, the coronavirus outbreak posed a number of challenges, but it’s been encouraging to see them returning to more normal business operations.

“The manufacturing sector is hugely important here in the East Midlands. We know that many businesses across the region have been hit hard by the coronavirus pandemic, but we will continue to work closely with them during the months ahead as part of our ongoing commitment to helping Britain prosper.”

July 29, 2020

Finndon founders commit £2m investment

The next generation of UK neobanks, Finndon, has announced an initial £2m investment committed by its founders, to embed robust and secure infrastructure while undergoing activities towards securing authorisation by the Financial Conduct Authority.

The initial investment of £2m has enabled Finndon to already establish strong strategic partnerships with Modulr, Global Payment Services (GPS), Allpay Cards and Transaction Payments LTD. Furthermore, the founders have been able to handpick a highly skilled, experienced and diverse team to support utilising the latest technologies in building client facing platforms and an agile internal infrastructure.

Finndon targets to become the number 1 neobank in the UK by 2025. Launching in Q1 of 2021, the neobank will level the playing field, giving everyone a fair chance at progressing their financial future, regardless of their background and financial education.

Understanding the frustrations felt by customers with traditional banks, Finndon will introduce products yet to be provided by a neobank and disrupt the industry by returning the supportive culture that was once provided to our grandparents. They will demystify products that the everyday person should feel confident to take advantage of.

Embedding infrastructure on latest technology and being privately financed, provides an agile organisation to adapt quickly to economic changes, operate on lower costs and provide more affordable products to its customer base. In a drive to provide greater transparency, it will not leave the customer out in the dark like traditional financial institutions.

Finndon simplifies finance and offers customers on launch a seamless banking experience where they can spend, save and invest. Putting the power back into the hands of the customer, Finndon helps customers to learn how to benefit from their money and use suitable financial products to their advantage.

Founder & CEO of Finndon, Aaron Archer, commented: “Our drive is to help the everyday person understand and manage their money more effectively. By offering products that are beneficial and easy to figure out, whilst grasping the knowledge on how to avoid common pitfalls that can make it difficult to get financial security.

Banks frequently bamboozle customers and hide behind complex financial jargon leaving many of the population disadvantaged in their financial decisions. We are not educated in school about how to manage our personal credit ratings or the effects of inflation, as well as many other financial aspects which trip us up. This was a sharp learning curve when taking responsibility for my own finances at a younger age. It left me feeling as if banks were taking advantage of my lack of knowledge at the time.”

Now a serial entrepreneur, Archer has successfully overcome these challenges that many of us face, having launched profitable businesses within the sales, marketing and property industries.

Archer adds: “This is why I founded Finndon. To be able to help and educate customers into how they can make their money work more effectively, giving them opportunity to get on the property ladder sooner.”

Through clarifying financial jargon into easy to understand language, Finndon offers products that customers can relate with. Supporting the further education of its customers, Finndon will alleviate the stress and worry that can come from not understanding how to make your money work more productively. Finndon gives customers the opportunity to take responsibility for their finances offering simple advice that empowers customers rather than leaving them disheartened and confused.

July 29, 2020

Berry named group sales and marketing director at Crystal Specialist Finance

Berry, who initially joined the business as interim group sales director in January 2020, accepted the permanent, expanded role and a place on the Executive Team having helped steer the company through the recent challenges posed by the coronavirus pandemic.

In his new role he will continue to lead the CSF field and telephone sales teams plus take responsibility for distribution and sales strategy. He will also take on the company’s established marketing function where he will work alongside experienced industry consultant, Paul Hunt.

Berry previously held the role of director of sales at fintech insurance specialist Uinsure from 2012 to 2019, before which he led the sales channel for Platform Homeloans.

He said: “This year has been a tale of two halves, with sales records set in Q1 followed by survival and pivot in Q2. During this time I have been incredibly impressed with Crystal’s leadership team and observed thoughtful and well-considered decision making throughout, making it an easy decision to take a permanent, expanded role.

“Enormous potential exists and I certainly look forward to using my experience to ensure ambitious plans are achieved. Technology will play a big part in our future delivery with enhancements soon available which make submitting cases easier and processing quicker. I look forward to working closely with great people and having some fun along the way.”

Jo Breeden, managing director at CSF added: “Getting Jason to join Crystal back in January was a real coup, and having him on board has undoubtedly helped during a tricky year of trading.

“I am passionate that we deliver brilliant customer outcomes every time and also ensure that our broker partners have an engagement which encourages them to return time after time. Jason will play a huge part shaping our proposition and drive the business to new heights.”

A multi award-winning specialist distributor, CSF operates across six core divisions: bridging, buy-to-let, commercial, development finance, second charge loans and specialist residential.

The business works with brokers across the whole of the UK, with the company having access to over 100 lenders, including exclusive product lines and lenders who have an extremely limited distribution.

July 28, 2020

United Trust Bank continues to expand its Development Finance Division

United Trust Bank (UTB) is continuing to expand its Development Finance Division with the appointment of a new director and a new manager.

Hardeep Thandi joins UTB from Aldermore as director, property development and brings with him over 14 years’ property development, commercial and corporate banking experience. He is based in Leeds and will predominantly be responsible for promoting UTB’s development finance offering amongst SME house builders, developers, property investors and specialist introducers across the Midlands, Yorkshire, Humber and the North East. Hardeep will work closely with Huw Jenkins who is based in the North West and between them they will cover the North of England.

 

 

 

Martin Nield joins UTB as a manager and will be based in London supporting senior managers Phil Bird and Rob Syrett in servicing their existing client base and growing their development finance portfolio. Martin entered the finance industry by joining the NACFB apprenticeship scheme following completion of his Master’s degree. He gained experience in both lender and broker roles in the asset finance sector before moving into property finance with Secure Trust Bank.

 

 

 

UTB has continued to lend throughout the Covid-19 pandemic supporting existing borrowers throughout the lockdown and agreeing and completing new facilities despite the challenges of travel restrictions and social distancing. These appointments confirm UTB’s commitment to continue to support SME house builders and developers across England and Wales.

Adam Bovingdon, senior director – Property Development, United Trust Bank commented: “UTB are committed to supporting SME developers around the country through whatever challenges the pandemic and the economy may throw at us. With Hardeep and Martin joining the team we have strengthened our presence in the North of England and London where we see considerable potential for further growth. By increasing our customer and broker support around the country and building greater awareness of UTB and our development finance offering, we aim to make the Bank a first pick for SME house builders and developers looking for competitive products and the backing of a reliable, knowledgeable and supportive finance partner.

“Hardeep and Martin bring experience and enthusiasm to the team and they share our commitment to supporting SME house builders and developers. The Covid-19 pandemic has changed the UK’s economic landscape, but housing remains a key issue with hundreds of thousands of new homes needed each year to meet existing demand. SME house builders can have a significant part to play in the delivery of those new homes and we are keen to provide the funding to enable them to seize opportunities and keep building.”

July 28, 2020

Online shoppers must not be the fall guys who pay the government’s Covid bill

The government is reportedly examining how the ‘the tax system raises sufficient revenue’ to cover the cost of lost business rates, as the coronavirus pandemic continues to bankrupt many high street businesses.

The Times newspaper reported on Monday that, following last week’s Treasury consultation paper on business rates, Chancellor Sunak is considering a 2% levy on goods sold online. ParcelHero, the UK e-commerce delivery expert, warns this new charge would be in addition to the recently announced ‘plastic bags-style tax’ on home deliveries the government plans to introduce, in order to force shoppers to rethink their use of home deliveries.

ParcelHero’s head of consumer services, David Jinks MILT, says home shoppers should not be duped into footing the bill for the impact of Covid 19:

‘During lockdown, shoppers of all ages have turned to e-commerce so they can continue to shop safely from their own home. That is a sensible choice and consumers must not be punished for being wary of returning to shopping centres and crowded stores.

‘The Treasury paper says: ‘Historical trends in online retail sales, and the more recent increases driven by Covid-19, suggests that while an online sales tax would not replace business rates, it could still provide a sustainable and meaningful revenue source for the government.’ That means the government is well aware many people have been driven to online shopping because of their concerns over the coronavirus but it is prepared to make those people pay more to restore the government’s coffers. The Treasury goes on to say that it needs to ‘…ensure that the tax system raises sufficient revenue to fund the services that have been essential parts of the pandemic response, as well as public services more broadly.’

‘A 2% levy on online sales, in addition to the previously reported mandatory charge on consumer deliveries, is simply unfair on the huge number of elderly or shielding people who have turned to online shopping for the first time during the pandemic. It must not be home shoppers left to pick up a large chunk of the Covid-19 bill.

‘As well as this 2% tax on the frail the chancellor is reported to be actively considering, the Treasury is still threatening a compulsory new charge on home deliveries that would form part of a campaign to cut congestion and toxic emissions. This entire concept, however. is based on a false premise. The Treasury has embraced a recent Department for Transport consultation paper that examined the recent growth in home deliveries and van miles, but failed to consider whether the end of free deliveries would result in shoppers simply climbing back into their cars to shop in town. The environmental impact of that would be disastrous. In fact, there is strong evidence that, far from having an environmental cost, home deliveries are significantly more environmentally friendly than traditional visits to the high street.

‘A number of major studies have concluded that successful, first-time home deliveries of non-food products generate significantly less grammes of CO2 per kilometre than a dedicated car shopping trip. The highly regarded 2009 academic report “Carbon Auditing the Last Mile” found that a dedicated car trip for a specific item produced as much as 4,274 grammes of CO2 per km. In contrast, a successful, first-time home delivery creates just 181 grammes of CO2 per km per parcel.

‘There is no denying that high street retail and, indeed, much of the entire economy is struggling, but certain sectors of e-commerce continue to thrive. The chancellor’s response should be to encourage this one bright area of retail rather than impose two steep, new taxes on it. The result of this double-whammy of new taxes will be that consumers simply stop spending their hard-won money online as well as in store. Then no one wins – not the high street, not the Treasury and certainly not Britain’s consumers.

‘The answer to the business rates problem is that the Treasury should stop dragging its heels and push forwards with its radical, new plans to abolish business rates and replace them with a “capital values tax” that would be based on the value of land and the buildings on it. This tax would be paid by the owner of the property rather than the business leasing it. Britain’s business rates are the highest in Europe and they cripple High Street retailers; tackling these will help bring life back to our beleaguered town centres far more effectively than a new online sales tax.

‘Let’s face it, most good retailers sell both in store and online. A new e-commerce tax would be robbing one side of a business to pay the other. Both the government and retailers need better omnichannel retail strategies, embracing both shop and online sales, with both services complimenting the other.

July 28, 2020

Subscription-based payments set for significant growth

Subscriptions exist today for a whole host of products and services, from getting washing tablets delivered, to accessing entertainment, to driving a new car every three months. Seen by many as a convenient way to make regular payments seamlessly without returning to the checkout, half (50%) of international consumers today already have at least two subscription payments leaving their bank account every month, with 27% expecting this number to increase in the next year, according to specialised payments platform Paysafe’s recent Lost in Transaction research.

The research, which surveyed consumers in the US, UK, Canada, Germany, Austria, Italy and Bulgaria in April 2020, revealed that the motivations behind subscription-based payments vary, but mostly centre around cost and convenience. A significant 44% of consumers agree that subscriptions are better value than other payment options for a similar service or product. Additionally, just over half (53%) of consumers agree that subscriptions are a more convenient method of paying for goods or services they regularly use.

Among this ongoing surge in demand however, some consumers still have concerns. 46% of people say that they worry that subscriptions can be difficult to cancel and make them feel tied into long-term commitments. Also, being forgetful can be costly, with 35% of consumers admitting overpaying for a subscription service that they have stopped using but failed to cancel.

When it comes to successfully keeping track of subscription payments, the research showed that the overall number of consumers struggling with this is falling slightly, having decreased from 37% in 2018 to 34% in 2020 – based on Paysafe’s ongoing Lost in Transaction research.

“The burgeoning subscription economy is driving traditional pay-per-product companies to move to subscription-based models,” comments Daniel Kornitzer, chief business development officer at Paysafe.

However, it is clear from our research that companies currently offering or considering offering subscription-based payments should factor in a high degree of customer flexibility and transparency to their service offering. Do this successfully and companies can simultaneously increase consumer trust and alleviate common pain points often experienced with subscription-based payments, such as consumers overpaying or feeling like they are trapped into a long-term financial commitment.”

July 28, 2020

Dynamo for Intermediaries adds Hodge to its panel

Dynamo for Intermediaries has added Hodge to its lender panel.

This will mean that members of Dynamo for Intermediaries will have access to all of Hodge’s mortgage products, including its later life mortgage range.

Emma Graham, business development director at Hodge said: “Dynamo for Intermediaries is one of the country’s leading mortgage clubs. With a broad proposition that has developed over the years from specialist buy to let advice to the all-encompassing specialist service on offer today, it provides a fantastic offering to its brokers. We are really proud to be joining the panel and, in particular, looking forward to having our later life mortgages added to their residential services.

“At Hodge we know there’s no such thing as a typical retirement or customer and our product range has continued to evolve since we first introduced our first equity release product more than 50 years ago. We’re confident that our expertise and extensive range of later life mortgages will help Dynamo for Intermediaries brokers service the modern day retiree both now and in the future.”

Dynamo for Intermediaries’ founder and chief executive Ying Tan said: “We’re delighted that Hodge is joining our panel of lenders. I know that they will be welcomed in particular by the many brokers who are looking to service the ever-growing later life market. Hodge is certainly a lender to take notice of and I fully expect to see a lot of interest from our members in the coming months.”

July 28, 2020

Hygiene firms look to clean up with £4m funding line

Bibby Financial Services Ltd (BFS) has provided a £4m invoice discounting facility to the Bothongo Group UK, which has interests in the rapidly growing hygiene sector.

The Bothongo Group has been active in the UK for ten years, represented by its InnuSceince brand. It will continue expanding its presence in the UK with further acquisitions planned under the Healthguard Hygiene and InnuScience banners, with the credit facility grated by BFS supporting both brands. The Milton Keynes-based business specialises in hygiene products to support a strong cleaning regimen and is one of the fastest growing companies in its sector in the UK.

The Bothongo Group is using the funding to respond to a surge in demand for its products at a time when hygiene is critical. BFS’s Corporate team were able to increase the company’s initial £1.5m funding line with their previous funder by £2.5m to a £4m facility and generate £1.4m of this as working capital on day one of the transfer. The facility, structured by Ronnie Stokes and Dan Burton of BFS’s Corporate team, will enable the Bothongo Group to meet the rapid growth of new orders for its products as a result of the global pandemic.

Nick Winstone, CEO, Healthguard Hygiene Ltd, commented:

“The global pandemic has made cleaning products like ours critical to business success. We are thankful that with our partnership with BFS means we can deliver these much-needed products to help protect against the threats presented by the pandemic.

“The BFS team took the time to get to know us and understand what we were trying to do. They worked to create a deal that matched our ambition, all in just six weeks. These are challenging times, but we are very excited to be helping more businesses protect their people.”

Ronnie Stokes, corporate manager, Bibby Financial Services, said:

“Hygiene and health are top priorities for businesses, so we are very pleased to be able to support the Bothongo Group UK as they grow to meet demand under the Healthguard Hygiene banner.

“As a relationship based funder, we always take the time to get to know our clients. By understanding what Nick and his team were looking to achieve, we were able agree a deal that supports their unique circumstance and reflects the importance of their product to customers.”

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