Income growth stutters in the face of rising inflation

A new report on consumer spending power in 2013 has indicated that income growth remains weak as incomes struggle to keep pace with rising inflation levels. The Lloyds TSB Spending Power Report has revealed that consumers were no better off for December 2012 than during the same period in 2011. The rising cost of essential items as well as the effects of rising inflations levels has countered a small growth in income of 2.9%. Patrick Foley, chief economist at Lloyds TSB, commented on the significance of the report: “The latest Spending Power Report shows consumers remain under some pressure. Essential spending growth has clearly been affected by the snow in January, but the picture of weak discretionary spending power remains in place at the start of 2013." “Looking ahead, inflation is likely to remain high and is expected to pick up in the first half of the year, so what happens to income growth will dictate the extent of the squeeze on households.” Christmas costs begin to add up The research also suggests that almost a third of people who actually compiled a budget for Christmas spent more than they originally intended to. This could mean that the fall in spending power at the start of this year could be exacerbated by Christmas purchases that consumers are still paying for. Retailers are likely to feel the effects of this latest squeeze on household finances, with consumers increasingly likely to focus their finances on essential purchases. Insolvency specialists As a result, high street stores that are already struggling may need to call in a specialist business restructuring advisor to help them deal with the financial challenges ahead. A corporate insolvency specialist can assist business leaders, financial directors and stakeholders to deliver sustainable solutions for their business. A number of businesses may find themselves in a financially distressed situation in 2013. Seeking advice at a sufficiently early stage make a crucial difference in terms of how your company deals with the situation.

If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1144 or visit out website.

Manufacturing sector provides timely boost to UK economy

A strong finish to the year within the manufacturing sector has raised hopes that the industry could be poised to make a sustained and positive contribution to the UK economy.

A relatively disappointing 2012 for the sector was rescued by a successful final couple of months, during which demand for export to countries outside of the EU increased.
The indexes for production (1.1%) and manufacturing (1.6%) both increased between November and December 2012, according to figures from the Office for National Statistics (ONS).

The manufacturing boost was due to demand rising in a number of areas, including the manufacture of machinery (8%) and chemicals/chemical products (5.6%).

EU links falter

The industry was also helped by increased demand from a number of new sources. Countries within the European Union (EU) were the primary export destinations for the UK manufacturing sector up until the latter part of last year.

However, the recent financial uncertainty that has taken hold within the eurozone has caused previously strong trade links to stutter. Manufacturing exports to other EU countries fell by 4.8% in the last 2 months of 2012.

As a result, a number of manufacturing companies were left with little choice but to seek new trade links. Manufacturing exports to non-EU countries increased by 11.7% during the same period, which was a welcome boost to UK manufacturing companies who may have been wondering what the future held for them.

Numerous government figures have made frequent reference to the importance of a strong manufacturing sector if the UK economy is to recover sufficiently in the near future. These ONS figures suggest that things may be moving in the right direction.

Insolvency practitioners

Businesses which are not performing as successfully as they may wish could potentially benefit from seeking advice sooner rather than later.

A business insolvency specialist can assist business leaders and financial directors to deliver pro-active solutions for their business, as well as advising them on how to adapt to the ever-changing economic landscape in 2013.

If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143 or visit our website.

Downgraded growth forecast points to fragile 2013

The Bank of England (BoE) has today delivered another frustrating blow to the hopes of a UK economic recovery, as the growth forecast was marked down.

Mervyn King warned that growth in the UK economy was unlikely to gain any significant momentum until 2015. It is a worrying statement that hints at the fragile future that a number of struggling UK businesses may face for the rest of 2013.

It also halts any specific ideas that high street retailers may have had about a recovery in the fortunes of the UK economy. It may now seem like a very long way until 2014 for a number of struggling outfits.

Clothing chain Republic was today revealed as the latest victims of the recent downturn as they called in the administrators after a disastrously poor 2012.

150 members of staff at the company’s head office have already been made redundant and the nationally recognised brand is the latest in a long line of big names to feel the full impact of the economic downturn.

It is difficult to say with any real certainty how many more retailers will be forced to close their doors during 2013. The answer to that question probably depends on how effectively they are able to cut their cloth during these unstable economic times.

Contacting an insolvency specialist

It can be difficult to assess how much financial trouble your company may be in as many directors and company managers are unable to look too far ahead into their financial future. Targets are being hastily re-structured from one quarter to the next for a number of companies.

A restructuring and insolvency advice service can assist business leaders, financial directors and stakeholders to deliver pro-active solutions for their business. They can also offer insightful advice regarding how to proceed in the unstable economic climate of 2013.

If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143 or visit our website.

Insolvency index report brings mixed news for UK businesses

The latest business insolvency index produced by Experian has highlighted some surprising results in terms of the amount of company insolvencies recorded in the UK last year.

 

2012 saw a slight fall in the number of companies who were forced into insolvency compared to the previous year.

In regional terms, North West England, the West Midlands and Wales saw the biggest improvement in terms of the insolvency rate.

 

A numbers game

 

There wasn’t good news for everyone though. Perhaps the most interesting aspect of the report was the fact that there was a clear disparity between the insolvency cases recorded on behalf of larger companies compared to smaller operations.

 

Firms with between 51-100 employees enjoyed an improvement in the number of recorded insolvencies, with the figure falling from 2.22% in 2011 to 1.83% in 2012.

 

In contrast, the situation was quite different for companies with more than 500 employees. These companies actually saw an increase in the rate of insolvencies, with the figure rising from 1.46% in 2011 to 1.61% in 2012.

 

These figures certainly suggest that it is the larger companies who are continuing to feel the sharpest effects of the stuttering UK economy. It is our view, however that smaller companies are also suffering real difficulties as trading conditions continue to be difficult. Many business owners are simply 'closing the doors' some what distoring statistics.

 

HMV stand out as an obvious recent example of a major company that has considerably more than 500 employees and has been forced to accept the reality of the current financial climate.

 

Specialist advice

 

Businesses may have felt that the worst of the downturn was now behind them. However, these results suggest that a number of companies could simply be caught in the eye of a wider-reaching financial storm.

 

Underperforming businesses worried about their financial situation can benefit from seeking advice sooner rather than later.

 

A restructuring and insolvency specialist can assist business leaders, financial directors and stakeholders to deliver pro-active solutions for their business, as well as advice on how to adapt to the ever-changing economic landscape.

 

If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143 or visit our website.

Moorfields Corporate Recovery - leading provider of Corporate Restructuring & Insolvency Services - Insolvency Practitioners providing advice on Company Administration, Business Recovery, Pre-Pack Administration, Company Voluntary Arrangement, Liquidation, Receiverships.

Protecting your Business

The current economy is having an impact on nearly every business. Many businesses are experiencing issues and external conditions which are now out of their control, leaving them concerned about their responsibilities and potential liabilities.

It’s crucial that if you are facing financial pressures they are not ignored as reacting early can help protect both your individual and business’ best interests.

Taking the correct professional advice and being aware of your options gives your business the best chance of survival.

Click here to read more

 

Moorfields appointed Administrators over Teknoflex Ltd the UKs largest supplier of flexible and flex-rigid multilayer circuits

Buyers are being sought for the UK’s largest manufacturer and supplier of flexible and flex-rigid multilayer circuits Teknoflex Ltd, which was placed into administration on Monday 14^th January 2013.

The business, which operates in Sussex specialises in the design, manufacturing and assembling of flexible circuits and flex-rigid multi-layer inter connection systems to both the UK and overseas market with a particular focus on high technology, niche products for the defence sector. The business has traded for over 50 years with over 100 employees and has established key overseas trade in the US, France and Germany.

Simon Thomas and Shelley Bullman of leading insolvency and rescue firm Moorfields
Corporate Recovery have been appointed administrators and are looking the sell the business as a going concern.

Simon Thomas, joint administrator at Moorfields Corporate Recovery, said:“Teknoflex is a leading UK manufacturer and supplier with a strong reputation for providing high technology, niche products to a specialised market. With over 50 years experience and high quality in-house design, assembly and test facilities the firm has a solid infrastructure in place that I am confident has potential both in the UK and overseas.”

Shelley Bullman, joint administrator at Moorfields Corporate Recovery, said: “We have seen a number of manufacturing businesses suffer in 2012 following difficulties in the eurozone. As a result the market suffered a period of decline. Unexpectedly the Markit/CIPS UK Manufacturing PMI index showed an increase in December 2012 leaving the industry optimistic about 2013.”

 

Moorfields Property Solutions Team successfully secure sale of properties totalling over £80 Million in December

The property sector has been one of the worst hit sectors in this double dip recession, but with the spotlight now firmly on London and the UK due to the Summer Games it looks like it is slowly making a recovery.

Over the last 6 months Moorfields Property Solutions team have acted on behalf of a number of lenders in the property sector, collectively owed some £800m, across a variety of properties including residential, commercial, licensed trade and development sites.

Last month the property solutions team successfully realised properties totalling over £80m with over 60% of the properties falling under the commercial or licensed trade sector. The team tackled a number of issues prior to sale including planning irregularities, rent arrears, undocumented tenancies, guarantee issues, building regulations and squatters.

Simon Thomas, Fixed Charge Receiver and Administrator at Moorfields Corporate Recovery said“Moorfields saw a number of portfolios suffer in 2012, from properties valued at £265m to small residential properties. With our success in Q4 2012 we are confident that the market will remain steady but challenging in the year ahead”