central south mid market report CENTRAL SOUTH MID MARKET


OPPORTUNITY SEIZING THE


Hot for profit


How can a business build its fortune while the world is spinning so unpredictably, when even experts are flummoxed by the alarming rate of political change?


Accountants and advisers BDO share some insights from the local and global business perspective – and case histories from two companies named among the Central South Mid Market’s top performers for 2017 and the Sunday Times Profit Track 100


First – be reassured. Business is doing business and making profit. As both profit growth lists illustrate, there are many mid-sized firms punching well above their weight.


But as Brexit negotiations begin, what does business need to survive and thrive in our brave new, non-EU world?


We believe there are three key areas which the policy makers must urgently address.


Encourage the UK’s fast-growth mid-sized businesses


A simpler payroll, fusing National Insurance and Income Tax, will cut back on administrative clutter – while a moratorium on any changes to UK corporate tax until 2020 will give our businesses some much needed certainty. Similarly, a simpler, faster


route to accessing capital will promote growth, along with long-term lending trusts.


And once Brexit negotiations are finalised? How about some tax incentives for technology firms? Social investment tax relief to increase finance sources for social enterprises? An extension of childcare support for one to four-year-olds to help plug the skills gap?


Geographic powerhouses


We’d like to see investment in smart infrastructure to nurture businesses and local communities, a strengthening of Local Enterprise Partnerships, a long-term industrial strategy and funding for innovation and digitisation.


Add in a cut in VAT for the tourism industry, a reform of business rates for high-street


retailers, a robust growth environment for medium-sized housebuilders. Also, the creation of a centre of excellence for the UK’s oil and gas – and decommissioning – industries.


Open and simple access to world markets and global talent


How will we access talent and markets around the world? Return to a variant of our current EU financial services passporting – and remove overseas tax barriers and VAT on supplies to companies that export, post Brexit, thus encouraging more firms to trade abroad. Supporting high-quality apprenticeships and reinstating the two-year post-study visa will mean we hang on to talent.


You can read more detail in the BDO New Economy report.*


The thoughts of two of the region’s top mid-market performers:


TRADING OVER TIME Sydenhams may be a builders’ merchants, but joint managing directors, brothers James and Charles Sherborne, operate like time lords.


There’s no TARDIS – although the firm could likely supply everything you need to build one – but the brothers, this year guiding the firm to profits of around £6.4 million, are acutely aware of time streams. They think from 1874 to 2067.


Sydenhams began importing timber at Poole’s Hamworthy Wharf in 1874 and was bought by great grandfather Sherborne in 1920.


“Clogs to clogs in three generations is the old saying,” says James. “The founder is entrepreneurial; not much money. The children are brought up with the same


40 businessmag.co.uk


“Over nearly 100 years we’ve regularly invested, so most of our sites we own freehold,” says Charles. “This may have held us back in total growth but when times get tough you can just entrench.


“We don’t just plan the next five years; we look at twenty-five or even fifty. Planning over a long period has paid dividends.”


BDO partner Jane Mulholland with Charles and James Sherborne


issues – but the third generation tends to end up blowing it. Charlie and I are fourth generation.”


Yet, so far, no clogs.


How has the firm weathered boom, bust, wars and turbulence across two centuries? The long game.


Old fashioned money habits have paid off too. “We’ve never really borrowed extensive sums,” says James. “Except in 1999 when my brother and I bought the family out. Prior to that we never borrowed. My father would only invest in acquisitions or plant or lorries when there were surplus funds in the bank.


“We’ve grown up under sensible rules from our parents, grandparents and great grandparents.”


THE BUSINESS MAGAZINE – SOLENT & SOUTH COAST – JULY/AUGUST 2017


BRAVE


INNOVATIVE


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