News & Views
Plenty of cash rich to rescue the needy
Oct 12 2009
1 in 7 companies in the UK Scientific & Laboratory Equipment industry could change ownership as a result of the current economic climate, claims a new study by leading financial analysts Plimsoll. With a surprising number of “cash rich” competitors waiting in the wings, the market could be set for a prolonged period of consolidation.
David Pattison, author of the new Plimsoll Industry Analysis – Scientific & Laboratory Equipment, explains, “I am sure any director worth his salt would agree that, in the current climate, there are simply too many companies chasing too little market. With many directors eyeing the exit doors and highly leveraged buyouts consigned to history for the time being, it really is a buyers market out there for cash rich companies”
Pattison continues, “In the Plimsoll Industry Analysis we have identified 177 companies that have a sizeable cash reserve sat on their balance sheets that, due to record low interest rates, is generating nothing. One company has a £60 million cash pot; a whopping 80% of turnover. These companies are now in the position to buy up large chunks of market share at rock bottom prices and make that money work for them. They
must be like kids in a sweet shop at the moment – all those distressed competitors available at a fraction of their true value”.
“The UK Scientific & Laboratory Equipment market is still widely regarded as one of the UK’s most fragmented sectors. In our report we analysed 426 companies with a turnover of over £1 million per annum and have picked out 104 that are primed to be taken over. Buying one of these businesses represents a massive opportunity for someone to enhance their share of the market. Either way, the market is set for a wave of takeovers in the next months”.
The new Plimsoll Industry Analysis – Scientific & Laboratory Equipment will tell you which companies are set to be buying and who will be selling. Readers of International Labmate are entitled to a £50 discount of this new special edition of the Plimsoll Industry Analysis – Scientific & Laboratory Equipment. Call 01642 626400 for further details and quote reference PR/PC40.
Go online to win public contracts, advises FPB
The Forum of Private Business (FPB) is advising businesses to go online to maximise their chances of winning public contracts, following the Government’s decision to scrap its policy of charging a maximum of £180 per year to use its supply2.gov.uk portal.
The move follows recommendations made in the Glover review of public procurement, which was published in November 2008. The review found that public sector buyers are missing out on innovation and savings because too few small businesses are able to access contracts.
In response to the problems experienced by its members in bidding for a share of the annual £175 billion worth of public business, the FPB is urging the Government to fast-track measures outlined in the review, most of which are not scheduled for implementation until 2010.
One of the Glover review’s key recommendations was creating greater transparency in public sector tendering via better advertising and more information accessible through a single, free-touse and easy-to-search online portal. Last year, the Government announced that the supply2.gov.uk service for lower-value public sector contracts would be available free of charge on a trial basis of just three months. At the time, the FPB said it
should be free indefinitely.
"It’s important that the measures put forward in the Glover review move in the right direction as quickly and as effectively as possible. These measures will help save more small firms from closure and provide a catalyst for economic recovery." said the FPB’s Policy Representative, Matt Goodman. “Removing the cost barrier to accessing the supply2.gov.uk portal is a significant step towards improving access to public contracts
and small businesses should register on the site without delay.”
Tim Williams, Managing Director of Millstream Associates and the FPB’s adviser on public sector tendering, urged business owners to take action and bid for public work.
"Public spending levels are staying constant at the moment and some spending is being brought forward to boost the economy," he says. "There’ll be cuts in future years though, so make hay while the sun shines."
Another procurement and tender specialist Wendy Wills, Managing Director of Ways2Win, said preparing for tenders should be a key marketing strategy for UK businesses, but argued that many suffer from lack of confidence and inadequate planning. "All too often, small companies shy away from tendering," she says. "It’s true that they need to prepare themselves, but done properly this can reap real rewards."
The FPB is advising businesses on how to help themselves win their fair share of public contracts. For help and guidance visit www.fpb.org.
Health and safety compliance costs smaller businesses more than £2 billion
Britain’s smaller businesses are said to be spending over £2 billion every year complying with health and safety regulations according to research carried out by the Forum of Private Business (FPB). This estimates that small and medium-sized companies face an annual bill of £2,072 million in time and money spent on health and safety guidelines.
The not-for-profit business support and lobby group calculated the figure using feedback from its members as part of its quarterly Referendum survey. The FPB found that the cost of complying with health and safety legislation was the secondlargest out of seven different types of regulation business owners must contend with, being eclipsed only by that of legislation associated with employing people. It was significantly more than
that incurred by small businesses dealing with tax laws, which was calculated to cost £1,826 million.
In comparison, the cost to smaller businesses of complying with environment and waste legislation was put at just £783 million, while paperwork surrounding equality and diversity rules cost the least, at £367 million.
The FPB’s Referendum survey found that the cost of complying with health and safety guidance was highest for smaller businesses in the services sector (as defined by the UK SIC), which are left around £832 million out of pocket every year. The TRAD sector, encompassing businesses related to retail, hospitality, transport, storage and vehicle services was the next hardest-hit, with costs of £606 million, while smaller businesses in the manufacturing industry faced annual costs of around £357 million.
Smaller firms in the construction industry faced the smallest bill out of the four, spending around £277 million each year on compliance. By region, the cost of complying with health and safety regulations was found to be the highest in the South East, where firms spend around £309 million each year on it. London faces the secondhighest bill, at £273 million, followed by the North West at £234 million.
FPB member Rachel Andrews, the Financial Director of Hertfordshire-based Andrews Computer Services Limited, attended a meeting of the Government’s Better Regulation Executive (BRE) on 26 June 2009 to put across small business owners’ calls for less regulation. She pointed out that the time and money spent on health and safety paperwork was a major bone of contention with owners of small businesses believing much of the time-consuming legislation could be scrapped and replaced with a “common sense” approach to safety at work – and a greater degree of trust in business owners to look after their workers, the report said.
“I just feel that a lot of these rules are a little bit silly. Of course, nobody wants to harm their employees, but we are trying to make a living and, in the current economic climate, that’s not always easy, especially when you’re having to devote valuable time to all this form-filling.
There should also be gradients of what you’re expected to do, depending on the size of your business” Mrs Andrews commented.She also added that the FPB’s own Health & Safety Guide helped her to make sense of the rules.
The FPB has also joined forces with specialist firm Cardinus to provide smaller business employers with online training and distance learning on health and safety issues in a move designed to help them comply with the rules while controlling costs. Specialist advice is also available through the FPB member helpline with options available for legal advice.
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