The hunt is on for the person who can solve the late-payments crisis threatening Britain’s small and medium-sized enterprise (SMEs). Applications for the post of small business commissioner close next week, with a £130,000 salary on offer for the right candidate. The appointee is scheduled to be announced in late June, two years after plans for the role were first unveiled by ministers, meaning that nobody can accuse the government of rushing the process. Yet the need for a new approach to what the Department for Business’s advertisement for the job describes as “the scourge of late payment” is as great as ever. Data from Bacs, the organisation that runs the banking payments system, suggests 47% of SMEs are routinely paid late by their customers. The average small business is owed £32,185 in late payments according to the research – the equivalent of £26.3bn across the UK as a whole. The effects can be devastating. A third of SMEs say they … [Read more...] about Small businesses: The scourge of late payments
Politicians across the political spectrum agree that small businesses are important to the success of the British economy. SMEs (small and medium-sized enterprises) employ around 60% of the UK workforce and generate just under half the total turnover. So it’s vital that the interests of such companies are taken into account in Brexit negotiations. To get a view of what these interests are we’ve decided to speak to Craig Beaumont of the Federation of Small Businesses (FSB). With over 200,000 individual members, the FSB represents the self-employed and those who run their own firms. Beaumont agrees that there are going to be some short-term losses. For example, if nothing else, British firms will lose access to European funding via both Local Enterprise Partnerships and the European Investment Bank (which funds larger projects). As a result, he hopes that the UK government will increase investment via the British Business Bank to compensate for this. In the … [Read more...] about What Britain’s small businesses want from Brexit
Another day, another nasty profit warning. Given that it’s been a year notable for absence of volatility, we’ve seen quite a few double-digit disasters in the last few months. Yesterday it was the turn of Pendragon, one of the UK’s biggest car dealers. But while the slide in its share price will have left its shareholders smarting, Pendragon’s problems are at least as interesting for the rest of us, given what they say about the car industry. Pendragon is one of the UK’s biggest car dealers. It owns the Evans Halshaw and Stratstone brands. The company now expects full-year underlying profit to come in at around £60m, rather than the £75m expected by analysts. Although revenues rose (strongly in the case of used car sales), gross profits fell by about a fifth during the quarter. Part of the problem is that sales of new cars as a whole have fallen. That in turn has hit the price of used cars. This is because of “pre-registrations,” … [Read more...] about What Pendragon’s woes tell us about the future of the car business
Executive pay has been rocketing for decades, exciting the envy of wage slaves. But should investors avoid or opt for stocks helmed by well-rewarded executives, asks Richard Beddard. First it was the company car, then it was share options – and now it’s the “Long-Term Incentive Plan”. For decades, companies have been finding ways to pay executives more money – they have to, they say, in order to attract the best people for the top jobs. The headlines usually focus on the obvious outliers – such as WPP’s chief executive, Sir Martin Sorrell, who earned £70m in 2015, up from £43m in 2014. But while Sorrell is an extreme case, pay for CEOs in general has been soaring for decades now. The High Pay Centre think-tank says that the gap between CEOs’ pay and that of the average worker has tripled since the late 1990s. Back then, the average FTSE 100 CEO earned about 50 times the salary of their average employee. Today, as average … [Read more...] about Are soaring CEO salaries a burden on business?
At a rather trying male-dominated dinner a few years ago, I sat next to a very senior Standard Life executive. After he had made it clear he wasn’t mad for journalists, he went on to make it extra clear by suggesting that if consumers had lost any confidence in the asset management community over the past decade (they have) this was not in any way related to any failure on the part of said asset management community. It was instead the fault of the kind of journalists who get a kick out of stirring up trouble.We didn’t talk much more after that. He isn’t in his job any more. But I suspect that, by now, even he can see that the traditional fund management business has the kind of problems that really can’t be batted away as crazy figments of the bitter imaginations of doom-mongering journalists.Problem number one: there’s a new(ish) kid in town. Passive funds have grown four times faster than actively managed funds since 2007 and the bestselling one in the … [Read more...] about Standard Life Aberdeen deal means “business as usual” isn’t an option for asset managers