The Adviser – Winter 2011/12

Please follow this link to download your copy of the latest edition of Hart Shaw’s newsletter, The Adviser.

The Adviser - Winter 2011/12

 

In this issue we talk about the online filing laws which now affect all businesses, how to successfully manage your business in the current economic climate, what to consider if marketing your business for sale, tax penalties and a review of a recent seminar which focussed on the issues surrounding acquiring funding for business growth.

In lighter news, we would also like to introduce you to our Sheffield based charity, the Sheffield Royal Society for the Blind, our sponsorship of Westbourne School’s Maths Award and our involvement in the Derwent Wye Fine Art sculpture exhibition.

Please also see below for details of a special offer to Hart Shaw clients from Sugarcane Creative, one of Hart Shaw’s business partners.

Should you have any questions about any of the articles you can contact The Adviser by email at: adviser@hartshaw.co.uk or you can reach the authors directly via the contact details at the end of each article.

To download Hart Shaw’s other newsletters and client briefings please visit the newsletters page of our website at: www.hartshaw.co.uk/newsletters.htm.

We hope you find our latest articles of interest and we welcome your feedback on any aspect of The Adviser, or any suggestions for future editions. 

Brendan Hall, Marketing Co-ordinator

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Marketing offer to Hart Shaw clients

Sugarcane Creative, the Sheffield based Graphic Design and Marketing Agency are pleased to launch their new logo design packages, available until end of February 2012. You can find out more at www.yorkshirelogodesign.co.uk. Any project proceeding before the end of January will receive a 10% discount.

Sugarcane Creative offer brand identity, logo design, all types of literature, web design, newsletters, campaign promotions, exhibition materials, POS and marketing strategy.

JMC Aquatics Limited acquires aquatics division of Pedigree Wholesale Limited

JMC Aquatics Limited, the leading importer and wholesaler of ornamental fish and accessories, has acquired the aquatics division of Pedigree Wholesale Limited for an undisclosed sum.

Sheffield based accountants and business advisers, Hart Shaw and law firm Wake Smith, acted on behalf of JMC.

Pedigree Aquatics is based in a 14,000 ft² leasehold facility in Nottingham and has a broad base of trade accounts which will compliment the existing JMC business. Jane Flaherty, Managing Director of JMC, commented: “Pedigree is renowned for its quality and service and is a fantastic strategic fit with the core JMC business. The opportunity to acquire the Pedigree business made excellent strategic sense as it allows JMC to service a larger client base whilst maintaining the quality of our service. Already there is incredible enthusiasm amongst our customers and suppliers. The support we received from Hart Shaw and Wake Smith was invaluable and ensured that the transaction was delivered on time”.

Steve Bell, Head of Corporate Finance at Hart Shaw said: “As a long standing client of the practice we welcomed the opportunity to assist JMC with this transaction. It is clear that the acquisition of Pedigree is the first phase of a long term strategic plan to develop the business. The fact that we were able to structure a transaction that minimized the risk has meant JMC can take this first strategic step safe in the knowledge that the core business is secure.”

Barry Gregory, Partner at Wake Smith LLP, commented “Wake Smith has acted for JMC for many years and were delighted to have done so on this occasion. Working closely with Jane and Hart Shaw we were pleased to have been able to assist JMC in completing this exciting stage of their ongoing development plan”

Hart Shaw news

£95m boost for small businesses

Small and medium sized businesses in England could benefit from £95 million in government investment.

The government funding, announced on 10 November will support small and medium-sized enterprises (SMEs) considering investing in new capital assets. The government expects the funding to unlock around £500 million of new investment and create at least 4,000 jobs.

The money forms part of the government’s £1.4 billion Regional Growth Fund, which supports projects that can create jobs, are based in areas dependent on the public sector and are supported by private sector investment.

The new scheme will provide grants designed to support SMEs considering investment in new capital assets and creating new employment but which have been unable to secure commercial funding for their projects.

These schemes will directly help SMEs that want to invest and create new jobs. They will deliver a shot in the arm to local communities and help small businesses drive local growth.

RBS, NatWest and HSBC have agreed to facilitate the distribution of the £95 million. To qualify for the scheme run by NatWest and RBS, SMEs need a turnover of less than £25 million. To qualify for the HSBC scheme the SME will need a turnover of less than 50 million euros.

SMEs can qualify for a grant if they are going to invest in new capital assets, such as plant and machinery, and create new jobs but cannot get normal bank finance. Grants of up to £500,000 will be awarded alongside the award of a new bank loan on commercial terms.

For further information about business grants please contact Steve Bell, Head of Corporate Finance on T: 0114 251 8850 or email: steve.bell@hartshaw.co.uk.

Hart Shaw Corporate Finance

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2011 – A very tough year

Anyone watching the news recently cannot avoid the general feeling of doom and gloom; the collapse of the Euro, inflation at 5% and minimal economic growth. In the face of these factors business continues to be challenging.

In a recent on-line blog someone asked whether the fact that the economy is not growing is relevant to your business? I would suggest that the answer has to be NO!

A client recently stated that he can’t waste time bemoaning the global economic crisis and the fact that funding is more expensive and restricted as all these factors are outside of his control. Every business faces tough decisions but those that are successful identify and actively manage factors that are in their control. In the past many businesses achieved success without having to try; sales were easy to achieve and profits and cash were generated. In 2008 things changed and since then we see continued pressure on margins and people chasing sales. Business owners have to work harder to seemingly stand still. In the face of these pressures we advise our clients to be as efficient as possible and manage costs. We help our clients identify their aspirations and ensure that each decision becomes a step towards those goals.

The continuing economic turmoil is leading many business owners to consider their next step. As the days of high multiples and inexpensive bank debt are long gone, our experience suggests that Vendors need to be open minded when looking at transaction structures. Many deals are being completed that include higher proportions of deferred consideration and therefore in order to generate value advisers have to look away from the straightforward and deliver innovative deal structures.

Transactions are now likely to include deferred consideration, share options, loan notes, earn outs and deferred purchase. Comparing offers with a mix of consideration takes skill with the focus on long term value at the expense of short term certainty.

Our prediction for 2012 is that the economy will continue to present challenges. Our focus is on supporting all of our clients, ensuring they end the year in a stronger position than when they started. Uncertainty and caution will continue to suppress the transaction market but we expect to see a steady flow of deals, however to secure the deals Vendors have to be open-minded.

Steve Bell, Head of Corporate Finance at Hart Shaw.

T: 0114 251 8850, email: steve.bell@hartshaw.co.uk.

Hart Shaw Corporate Finance

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The Business of Timberline Limited sold to Metalliform Holdings Limited

Following the appointment of Administrators from Hart Shaw, the business of Chesterfield based outdoor play equipment manufacturer, Timberline Ltd has been sold to Metalliform

Timberline Limited sold to Metalliform Holdings Limited

Holdings Ltd.

Timberline, which operates nationwide, also manufactures timber buildings & shelters from two large factories on the Foxwood Industrial Park, and has been trading for over 20 years. The Company suffered a severe down turn in business, as a result of the impact of the public sector spending cuts in the education market. The Company was placed into Administration on 2^nd November 2011 and Christopher Brown & Andrew Maybery, partners at Hart Shaw LLP, in Sheffield were appointed its Joint Administrators.

Metalliform, an experienced school furniture and stadium seating manufacturer based in Barnsley, are ideally positioned to turn the business round whilst also introducing new options into the product range.

Joint Administrator, Christopher Brown of Hart Shaw LLP, said: “Following our appointment we continued to trade the business while we marketed it for sale. We are delighted that the sale of the business is now complete. This is a fantastic outcome for all stakeholders – employees and creditors – of the business and the acquisition by Metalliform has saved 45 jobs.”

The Joint Administrators received support from the Corporate Finance team at Hart Shaw. Steve Bell, Head of Corporate Finance, said “The underlying business of Timberline has strong brand recognition and we attracted a high level of reputable companies looking to secure the business. The nature of the administration was such that we had to react very quickly and were able to prepare the information pack and arrange site visits shortly after appointment with the result that the sale was completed within 6 weeks.”

Metalliform has manufactured furniture for schools, colleges and universities for more than 60-years.  The company employs 90 staff at its Barnsley production site and has a turnover of £8m.    

Peter Brier, Chief Executive of Metalliform Holdings, said: “Timberline is a business that has a good customer base and a skilled workforce. We are very pleased to have concluded this deal quickly as this presented the best chance to preserve jobs. There are good synergies between the two businesses in terms of operating markets and manufacturing capabilities. We plan to use these to the benefit of both businesses.”

In addition to school furniture, Metalliform also manufactures and installs sports stadium seats through its subsidiary company Arena Stadium Seating. 

Follow these links for further press on this story:

Insider

Business Desk

For further information about our services please click the following links:

Business Recovery & Insolvency

Corporate Finance

Project Wood – MBI opportunity for a manufacturer of circular saw blades

Merry Christmas from all at Hart Shaw!

SMEs slipping up on credit checks

Almost three-quarters of small and medium-sized UK businesses are failing to check on their customers’ creditworthiness, according to new research.

Global information services company Experian surveyed nearly 700 UK small businesses and found that 71 per cent did not check their customers’ credit status, increasing their risk of being paid late or not at all.

The recent survey also found that 39 per cent of small businesses did not know what a credit score was and 61 per cent have never checked their own score, leaving them unaware of issues that could lead to them being turned down for finance or refused materials by a new supplier.

Experian said that for small businesses, low scores can stem from a lack of detailed data about the business or a failure to file complete or accurate information, rather than underlying financial insecurity.

Two-thirds of small businesses may be blind to their credit scores, but their larger customers, suppliers and banks certainly won’t be.

It is important for businesses to monitor their credit score on a regular basis to ensure it reflects their situation accurately and to be able to take action to resolve any issues that are highlighted.

Simply taking the steps to check the credit score of firms before doing business with them is straightforward and affordable, and it could make all the difference.

For further information about how to manage your credit score please contact Chris Brown, Business Recovery & Insolvency Partner at Hart Shaw on T: 0114 251 8850.

chris.brown@hartshaw.co.uk

www.hartshaw-bri.co.uk

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Hart Shaw comments on Chancellor’s Autumn Statement

Hart Shaw is urging businesses to carefully study the Chancellor’s Autumn Statement to see if they can benefit from any of his newly announced measures.

Chancellor George Osborne delivering the Autumn 2011 statement

George Osborne announced a range of measures aimed at helping small and medium-sized businesses, including a £40 billion National Loan Guarantee Scheme where the Government will underwrite low-interest loans.

From April 2012, anyone investing up to £100,000 in a new start-up business will be eligible for Income Tax relief of 50% under a new Seed Enterprise Investment Scheme (SEIS).

In 2012, any tax on Capital Gains invested in such businesses will also be waived. The Government will also freeze the annual exempt amount for Capital Gains Tax at £10,600 for 2012-13.

Another measure announced is a £1 billion Business Finance Partnership aimed at Britain’s mid-sized companies.

For small businesses, the Government has extended the current business rate relief holiday until April 2013, while other firms will be able to defer 60% of next year’s business rate increase, instead repaying this equally across the following two years.

Mr Osborne announced an “above the line” research and development (R&D) tax credit in 2013 to encourage research and development activity by larger companies. This will be consulted on for the 2012 Budget to ensure that SME R&D tax credits are not reduced as a result of this change.

Steve Vickers, Tax Partner at Hart Shaw Chartered Accountants & Business Advisers said: “George Osborne has announced a raft of proposals, which, on the face of it, will benefit small and medium-sized business.

“We particularly welcome the measures announced regarding the National Loan Guarantee Scheme (NLGS), the new SEIS and the extended rate relief holiday.

“SMEs (small and medium-sized businesses) often find it difficult to access funding. Hopefully, the NLGS will open up new credit lines to help struggling businesses stay afloat.

“However, because of the current uncertain economic climate, it is too early to say whether these measures will help the country get back on its feet.

“Businesses should carefully study the ‘small print’ to see if how they can benefit from any of these announcements. We are only too happy to help businesses who want to know more about these policies.”

For a complete review of the Chancellor’s Autumn statement, please click here. 

For further information, please contact Steve Vickers on T: 0114 251 8850 or email: steve.vickers@hartshaw.co.uk

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A N Other fine mess on PAYE paperwork

Employers need to make sure their PAYE paperwork is correct after hundreds of returns incorrectly claimed to employ A N Other in 2009/10.

As well as 507 “A N Others”, employer returns submitted to HM Revenue & Customs (HMRC) for 2009/10 also contained the following errors:

• 128 staff entered as Mr, Ms or Mrs “Dummy”

• 572 people whose surnames only included the letter X, ranging from Mr X to Mrs XXXXXX

• 75 staff with the surname “Casual”, 11 “Cleaners”, 9 “Workers” and 6 “Students”

• 824 employees with the surname “Unknown” and

• 40 people who were apparently aged 200 or more, due to incorrect dates of birth being given.

Most employers get their PAYE returns right. The few who don’t can cause problems for their employees, for example, incorrect deductions of tax.

Around 80 per cent of errors in employee data are due to an incorrect name, date of birth or national insurance number – straightforward information that can be collected and checked quite easily.

So, whether you are employing Mr or Mrs J Smith – or even Mr or Mrs A N Other, please use the full and official name on your PAYE paperwork. First names are very important, especially for common surnames.

Steve Vickers, Tax Partner

steve.vickers@hartshaw.co.uk

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