Unease around Brexit, geo-political challenges
The past few months have seen profit warnings and notices of redundancies from a number of household names. These are uncertain times for businesses of all shapes and sizes, but in your opinion how
We often hear the media talk about ‘consumer confidence’. What impact do you think that the current economic climate is having on business acquisition and sales in the region? Because of this volatility, there are some businesses who are, in my opinion, veering towards indecision about their business growth, and are sitting on cash reserves rather than investing in new areas of organic growth and development. There is always an element of speculation in creating and launching new products - think of how the board of Apple must have felt when they were presented with the prototype of the iPod by Steve Jobs! – so returning cash to shareholders may be an easy if uninspiring option. In this environment an acquisition is another way to utilise surplus cash, however, we have seen the number of business acquisitions go up since the Brexit vote, so I’d say many business owners in this region are pretty switched on to growing their operations.
and rapidly changing market places are posing challenges for businesses – but are there also opportunities to be had? Luke Morris , Corporate Finance Partner at Scrutton Bland gives his views on the pros and cons of buying or selling a business in tumultuous times.
much of his can be attributed to Brexit or is this an historical pattern which you would expect? The deadlock in Parliament over recent months has certainly created tremendous uncertainty, but the business landscape is always evolving, and there would be something very wrong if everything came to a standstill. In retail for example, there have been notable businesses, such as Debenhams and Mothercare, who were previously big players on the high street, but are now struggling or in administration. Conversely a number of other businesses, such as Primark and boohoo.com who operate with different models such as digital platforms, bulk buying and minimal advertising, are doing really well. This pattern is replicated across the wider economy, as entrepreneurs and disruptors continue to challenge established market leaders. Volatility creates uncertainty but it also creates opportunity.
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