Blog

What are you waiting for? It’s a great time to grow by buying another business.

May 30th, 2016 by Chris St Cartmail

We are seeing more private businesses appear on the market again after a short lull. One of the reasons for this is that in the lead-up to the recent Budget there were rumours about that the government may have been about to kick the very useful Entrepreneurs’ Relief into touch. Heaven forbid!

This prompted more than a few concerned business owners to cash their chips before D-Day.

Read the rest of this entry »

Solvent business liquidations soar

May 20th, 2016 by Chris St Cartmail

March 2016 saw a record number of UK companies file for voluntary liquidation. There were 2663 solvent companies wound up – over three times the usual monthly rate which has averaged at 768 for the twelve months prior. The last highest month recorded was April 2015 when 992 companies filed.

What could this be attributed to?
Read the rest of this entry »

Residential care activities insolvencies up 23 per cent

May 5th, 2016 by Chris St Cartmail

Some interesting analysis on the residential care home market has been carried out by FRP Advisory.

Running against a general cross-industry trend of declining corporate insolvencies, the care home sector has been going through a very rough patch with insolvencies up 23% year on year. We are looking at a staggering 24-fold rise since 2010.

Read the rest of this entry »

New Business Sale Report Google Chrome Extension released

April 14th, 2016 by Chris St Cartmail

For those of you using the Google Chrome browser on a PC or Mac, we’ve created a very simple way to let you know about UK businesses for sale and divestment news before anyone else.

Our new Google Chrome Extension installs in seconds into your Toolbar, to let you know at a glance whether there are any new businesses for sale in the industry sector(s) you are interested in.

Read the rest of this entry »

Tata Steel puts UK business up for sale

March 30th, 2016 by Chris St Cartmail

Tata Steel has put the UK’s largest steelmaking business up for sale. The operation in Port Talbot, one of the few steelmakers left in the country, has been making heavy losses for some time.
Read the rest of this entry »

Retail sector warned of potential for ‘perfect storm’

December 27th, 2015 by Chris St Cartmail

For most, Christmas Day brings with it joy and cheer but for some retailers, the 25th of December will have bought with it a sense of foreboding as it heralded quarterly rent day.

The past few years have seen a string of retail insolvencies either just before or just after Christmas as businesses have struggled to adjust to the changing market and consumers' growing reliance on online shopping. Zavvi, Jessops and Woolworths are among those to have hit the wall in recent years under the seasonal pressure.

Read the rest of this entry »

Manufacturing sector shows tentative improvements

August 3rd, 2015 by Chris St Cartmail

The manufacturing sector in the UK has been somewhat subdued of late but there is still activity to be found and certain areas around the country are looking particularly strong.

Released today (3 August 2015), the latest Markit/CIPS UK Manufacturing PMI recorded 51.9. While this is still close to the growth cut-off figure of 50, it is an improvement on June's index, which recorded just 51.4 – a 26-month low.

The industry welcomed the increase, but it still remains below the average for the current sequence of growth, which began back in 2013.

Rob Dobson, senior economist with Markit, commented: “Although an uptick in the headline PMI breaks the decelerating trend in UK manufacturing, growth remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy.”

Regional Differences
The PMI comes after the last week's (30 July) publication of the EEF Regional Manufacturing Outlook which found that Wales and the East Midlands were both showing particularly high levels of activity with GVA in these regions both registering above 15 per cent.

For Wales, transport, metals and machinery were the top three sectors influencing this strong performance. Transport also performed well in the East Midlands ranking as the second strongest sector, with food and drink in first place and rubber and plastics in third.

On the other end of the scale was the South East, which recorded a GVA of less than ten per cent. Overall, output was weak in the region, but electronics and pharmaceuticals did manage stronger performance than other areas.

Domestic Market Holding up the Market
Back to the PMI data and it's clear that it's the domestic market that is keeping things moving as the sterling-euro exchange rate continues to sap export demand. Mr Dobson added: “The struggling manufacturing sector, and the impact of the strong pound on export performance, will be a worry for the Bank of England.

“However, with the goods-producing sector accounting for only one-tenth of the economy, these woes may take second place to the health of the far larger services sector in determining the timing of the first interest rate hike, suggesting firms will have to adjust to the pound trading at its current highs.”

What will all this activity – or lack of activity – do to the number of manufacturing businesses for sale?

Clearly the slow performance from manufacturing is having an impact on how buyers feel about the arena. Analysis from law firm Irwin Mitchell, using data from Experian, found that M&A activity among Yorkshire-based manufacturing companies dropped by 44 per cent in the second quarter of 2015 in comparison to the figure for the first three months.

Yorkshire wasn't top of EEF's regional analysis, but it wasn't bottom either, showing between 14 and 15 per cent GVA.

Andrea Cropley, partner and head of corporate with the law firm in the north of England, said she expects that activity will remain subdued until “the sector as a whole shows signs of consistent improvement”.

Our team at the Business Sale Report posted 21 manufacturing businesses for sale in July. It certainly wasn't our most popular sector for listings or for potential buyers looking to buy; perhaps wisely many people are holding off and waiting for improvements before investing in the creeping industry.

For some more experienced buyers, it might be the time to find bargains as people look to offload businesses or divisions in the underperforming industry. But if such a leap of faith is to be taken then due diligence will be more important than ever in assessing potential acquisitions and keeping a close eye on the market will no doubt the key.

Mixed fortunes for construction sector

July 24th, 2015 by Chris St Cartmail

The construction sector has had a mixed bag of fortunes this year. In June, the revised GDP figures from the Office for National Statistics (ONS) revealed that Britain's economic output had grown more than predicted and put the unexpected growth down to construction's strong performance.

The figures confirmed that GDP rose by 0.4 per cent in the first three months of the year, rather than the 0.3 per cent that had been predicted. New methods used to measure construction output were said to have played an important role with Joe Grice, chief economist at the ONS, noting that the upward revision is “down largely to the recently announced new methods to measure construction output”, which have a greater reliance on real world hard data.

Construction starts to falter
The sector might have started the year on a high, but when the ONS looked back on the second quarter and honed in on April and May it found that output dropped by 1.3 per cent between the two months, when economists had been expecting a 0.2 per cent rebound. Annual output for the sector remained up at 1.3 per cent, but there is further concern that when the figures for the second quarter as a whole come in, they will show a contraction for the three-month period.

Howard Archer, chief European and UK economist at IHS Global Insight, told the Financial Times: “There is now a very real risk that construction output contracted in the second quarter and was a drag on . . . growth.

“Indeed, construction output would have needed to grow 2.3 per cent month on month in June to have avoided contraction in the second quarter.”

Optimism remains high
Despite the dubious results from the ONS data for the second quarter, positivity in the construction sector remains high. Markit's Purchasing Managers' Index for June rose to a healthy 58.9 in June, up from 55.9 in May – any reading above 50 indicates growth.

Tim Moore, senior economist with Markit, commented: “UK construction companies experienced a growth rebound and surge in business confidence at the end of the second quarter.

“Survey respondents cited robust inflows of new work in June, adding to already strong order books across the sector.”

The data at the moment presents a mixed picture when it comes to construction's immediate future. It looks like optimism is being fuelled at least in part by the healthy future pipelines many businesses are eyeing up – such as the ten new schemes and 800 new homes in Harbur Construction's £68 million project pipeline.

Individuals and businesses looking to invest in the sector will need to weigh up the downward trend seen in the second quarter data, with the positive start to the year and the optimistic outlook of many involved the sector itself. Getting this right and finding the right niche could provide some excellent returns, but it will need close market monitoring to increase the chances of success.

Find construction businesses for sale

Could Osborne's Budget create retail acquisition opportunities?

July 10th, 2015 by Chris St Cartmail

After an initially positive response to Chancellor George Osborne's first Conservative Budget, businesses are digging a little deeper into the figures and finding a few causes for concern. The retail sector is among the sectors expected to be hit by some of the announcements, so we're taking a closer look at how the retail M&A market could evolve in the coming months.

The Impact of Living Wage on Retail
Mr Osborne announced the introduction of a new living wage. This will see the national minimum wage increase gradually from £6.50 an hour, to £9 an hour in 2020. The changes will mean that anyone aged 25 and over will by law have to be paid the national 'living wage', making workers in their late twenties significantly more expensive than younger team members.

For business owners operating in the retail sector, this change has the potential to massively increase their outgoings in salaries and many people have indicated that it will be the retail sector that bears the brunt of the wage changes.

James Lowman, chief executive of the Association of Convenience Stores, said that the changes will have a “devastating impact” on thousands of stores. He commented: “This will lead to retailers having to reduce staff hours, work more hours in their business and ultimately cancel their investment plans.”

Others have rejected the idea that the retail industry is being automatically seen as a low wage employer, but overall there is serious worry that the changes will dramatically increase the financial pressure on small retailers and could even force some to sell their retail business.

Broader Optimism
Before the Budget, figures indicated the expected levels of summer optimism among retailers. CBI figures showed that although growth in sales volumes slowed in the 12 months to June in comparison to the previous month, the industry remained positive.

Grocers were the main cause of the slowdown with all other major sectors reporting rises in the levels of volume growth and overall a positive 31 per cent were anticipated further pickup to be seen over the course of July.

Barry Williams, chief customer officer with Asda and the distributive trades survey chairman of the CBI, summed up the atmosphere in the retail industry: “Even though growth slowed slightly this month, retailers are not letting that subdue their hopes for the season.

“Low inflation – expected to stay below one per cent throughout this year – has given customers more discretionary income. The power of the pound in their pocket is going further and shoppers are spending more on treats, like flowers and jewellery, as well as on activities with their families.”

A Perfect Blend?
With the Budget just days behind us, it's too early to say where the industry will go. But if Osborne's policies do hit some retailers hard, it might well be time to keep an eye on retail businesses for sale and their distressed counterparts. The right buyer might be able to pick up assets for below market value or even an entire company ripe for the implementation of a turnaround strategy.

Hopes high for services sector recovery despite downturn

July 3rd, 2015 by Chris St Cartmail

In early 2015, the PMI figures for the services sector hit an eight-month high and confidence was soaring. But in May, the sector dipped somewhat unexpectedly. So why are industry analysts still anticipating strong performance from the sector? We explore the climate within the services sector and ask if now is a good time to buy a services business.

Recent figures indicated that the services sector's rate of expansion is slowing down. The Service Sector Purchasing Managers Index (PMI) from Markit and the CIPS showed that May's index was down to 56.5 from the 59.5 high recorded in April.

The latest monthly index for June should be released in the coming few days so it will be interesting to see which direction the trend has taken in June as May’s reading was something of an anomaly given that the previous month's reading was an eight-month high.

David Noble, chief executive of the CIPS, commented on the unexpected change in the services sector: “Momentum in the sector stalled in May, with the drop in the headline index the biggest fall for almost four years and likely to cause concern as services remains the UK’s largest driver of economic growth.”

Positive Service Sector Outlook in Spite of Downturn

Analysts aren't denying that it is a little concerning to see the service sector follow suit with a bit of dip in confidence after the recent weaknesses also seen in both manufacturing and construction. But with GDP just this week (30 June) revised up from initial estimates of 0.3 per cent growth in the first quarter to 0.4 per cent growth, the PMI figures certainly aren't bringing with them the sense of anguish that might usually be expected.

Chancellor George Osborne was among those to welcome the revised data and triumph the hope for further growth in the near future: “It is clear that our plan is laying the foundations for economic security for working people, with the three main sectors of the economy growing over the past year and business investment over 30 per cent higher than at the start of the last parliament.”

Of course, Mr Osborne has a vested interest in suggesting that his policies and this government's approach are working for the economy. But he isn't the only one showing faith that the latest negativity is a blip in an otherwise upwards journey to growth.

Analysts, including Martin Flanagan of the Scotsman have suggested that in the ongoing climate of austerity, heightened by concern around the Eurozone and the highly probable Grexit, services is likely to be the sector to pull through and keep growth on track.

Mr Flanagan wrote: “It looks like the Scottish services sector is still the best bet to take up the slack as we go forward as a result. It was not exactly ever thus, but it has been for a generation.”

Buy Now to Capitalise on Future Growth

Last month, 17.4 per cent of businesses for sale listed with the Business Sale Report were classed as service sector companies and we’re seeing a strong level of interest in this sector from our subscribers.

Along with everyone else, all we can do is to make educated guesses at where the industry will go in the coming months, but we’re willing to bet that there are a decent number of success stories to be found within the services sector for those smart enough and strong enough to tough it out another few months of potential upheaval.

Check out service sector businesses for sale.