Sector Focus
Finance
Biggest monthly fall in output since first lockdown
Chris Pole: Government support schemes have been a lifeline
Business support has been ‘lifeline’
The number of companies going into administration in the Midlands surprisingly fell to a historic low during 2020, according to accountancy giant KPMG. The company said the array
of Covid-19 support measures provided by the government had proved a lifeline for businesses adversely affected by the pandemic. Analysis of notices in public
record journal ‘The London Gazette’ by KPMG’s restructuring practice showed that across the Midlands, 137 companies went into administration over the course of 2020, a drop of 21 per cent compared to the 173 in 2019. There was a similar picture
nationally, with 1,112 administration appointments over the course of 2020 - the lowest annual total since KPMG started tracking the data in 2005, and a fall of 22 per cent on 2019. Chris Pole, partner and
head of restructuring for KPMG in the Midlands, said: “The breadth and depth of support measures available, coupled with a supportive lending community, have given organisations a vital lifeline. “As a result, we have seen
fewer insolvencies than expected from what will have been one of the most challenging years businesses have ever experienced. “It is clear however that the
low insolvency figures are simply masking the financial health of many businesses. “Much of the support
provided has resulted in businesses taking on additional liabilities. At some point, the rent, tax deferrals and loans will need to be repaid, and the Job Retention Scheme will unwind. “Life without these support
schemes, particularly for businesses which need to rebuild their working capital, is going to be a significant challenge, especially when the additional repayments are taken into account.”
56 CHAMBERLINK March 2021
The impact of national lockdown restrictions in January caused UK business output to fall at a rate not seen since April 2020, according to the a new business trends’ report from accountancy and business advisory firm BDO. The BDO Output Index, which
provides a comprehensive snapshot of business output by weighting macroeconomic data from the UK’s main business surveys, fell by 5.38 points in January to 70.44. This is a seven-month low for the
Index. Having borne the brunt of the restrictions, the services sector drove the decline, with output dropping for a third consecutive month in January. Despite this downturn, economic
activity remains significantly higher than it did in April 2020, when the BDO Output Index plummeted to 44.90 points. This is largely because
businesses have had time to adapt to the current restrictions, enabling many to continue providing some level of service. BDO’s Services Output Index
therefore remains 24.14 points higher than it stood in April 2020, when the first nationwide lockdown took hold.
Elsewhere in the report, the
Index hit a six-month low as it edged downwards from 86.96 to 86.34 points in January. This comes despite the Brexit
deal secured at the end of December, which provided some clarity on the UK’s future relationship with Europe.
“These figures show the resilience of UK business’’
With stories since emerging of difficulties in trading with the EU, optimism may take a further knock as businesses continue to navigate checks, delays and red tape. Richard Rose, partner and head
of BDO in the Midlands, said: “While these figures illustrate the severity of the impact that national lockdown restrictions are having on the economy, they also show the resilience of UK businesses – many of which have developed new procedures, products and services to allow them to continue trading. “Life without these support schemes is going to be a significant challenge.”
Richard Rose: UK businesses showing resilience
Bamboo begins: Vicky and Brett Critchley, James Parnell and Ade Cheatham New management for Cooper Parry IT
The IT arm of accountancy firm Cooper Parry has been acquired by its management – and will now change its name to Bamboo Cloud. Cooper Parry IT (CPIT) has been bought out by Brett
and Vicky Critchley, who first acquired half of the business in 2019. Vicky Critchley and Brett Critchley will become chief
executive officer and executive chairman respectively. The seven-member ownership team of CPIT is to
remain in place along with almost 90 employees. Vicky Critchley said: “We’re looking forward to creating
our own identity and accelerate our growth as one of the finest Microsoft Dynamics partners in the world. “Our unique passion for empowering SMBs will continue and we look forward to expanding our
offerings and services to a larger global audience in the months to come.” Cooper Parry chief executive Ade Cheatham said:
“Following the part management buy-out back in 2019, this is the natural next step. With exciting global opportunities across the UK and US, CPIT will fully leverage their strong Microsoft relationship to the benefit of our many mutual clients. “We’ll continue to collaborate on many projects,
transforming clients’ IT and finance systems. I’m super excited to see the next chapter of this story unfold.” Brett Critchley said: “Our global accomplishments are
rooted in the unwavering commitment we received from Cooper Parry. Together we built a solid foundation and we can’t wait to embark on this latest part of the journey.”
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