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NEW YEAR, NEW GROWTH OPPORTUNITIES FOR LONDON FIRMS

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NEW YEAR, NEW GROWTH OPPORTUNITIES FOR LONDON FIRMS 1

Paul Evans is area director for SME Banking in London, Lloyds Bank Commercial Banking

Paul Evans

Paul Evans

With the British economy now estimated to be 5.9 per cent above its pre-recession peak in terms of GDP, London SMEs are in a strong position as we approach the end of the year, as are others in neighbouring regions.

However, it’s vital that support and encouragement is provided to these firms to bolster this confidence and drive further economic growth in 2016.

A renewed sense of optimism in London was reflected in the latest Lloyds Bank London Purchasing Manager’s Index (PMI) report, which showed that companies experienced another consecutive month of rising activity and a further marked increase in new business during October.

In addition to this, robust employment growth has been maintained throughout 2015, evidencing firms’ determination to recruit new talent and strengthen their workforces in preparation for the year ahead. Our recent research on millennials – those born between 1980 and 2000 – brought to light that, in London, more than half of this generation are hungry for work and would move anywhere for the right job. As a result, many SMEs in the capital are looking to invest in developing their working practices to attract young talent.

We have a duty to continue to champion London businesses and help them realise their ambitions. Whilst we are able to provide support on a range of issues, the most common areas that business owners ask for our support on are finding the right funding solutions, using our sector expertise and learning about ways target new markets.

Funding solutions

The right financial support is vital to unlocking new opportunities, but I know that many local firms are unaware of the full breadth of funding options available to them.

From overdrafts and other simple credit facilities to trade finance and asset based lending, there’s a range of financial support available to help SMEs at every stage of their development as a business.  We recommend different facilities to suit each firm and its goals. For example, asset based lending is ideal for manufacturers, as they are machinery heavy and this enables them to borrow against the value of their assets and activate their expansion plans without impacting on their day-to-day operations and cashflow.

There are also a number of government initiatives available to support businesses with ambitions to grow, including the Funding for Lending Scheme (FLS), which enables us to provide even more competitive lending to firms for the life of their loans – making it better value to borrow.

Seeking sector expertise

Face-to-face business advice is the most practical way London business leaders can seek guidance on a range of issues, from generating cash flow to targeting markets overseas. Our dedicated relationship managers pride themselves on truly getting to know each business and its individual objectives. Many of them hold professional sector qualifications, enabling them to provide truly valuable and strategic guidance.

Another proven, and very popular, way in which owner-managers can access support is through business mentors. Enterprise mentoring can help firms bolster strategy and explore diversification in order to drive growth.

All across the country, companies have committed resources to help mentor small and medium-sized enterprises. At Lloyds Bank we’ve pledged to develop our UK network of enterprise mentors by pledging 500 volunteers this year.

Targeting new markets

The export market is hugely important to the British economy, and is a priority for local businesses too, with recent figures* showing that a third of London firms are currently selling their goods or services abroad. For those already trading internationally, the activity generates nearly two-fifths (39 per cent) of their total sales turnover.

Lloyds Bank has a strategic partnership with UKTI to help British businesses export and meet the Government’s targets for trade and investment by 2020. The partnership is helping to deliver greater regional coordination of work between UKTI and Lloyds Bank, as well as deliver export advice to businesses looking at key markets such as Europe and the Far East.

Paving the way for London SMEs

Whatever strategies local firms employ to achieve their ambitions, expert guidance and tailored funding will play a central role in enabling them to capitalise on opportunities. Through a combination of these factors, we can help businesses in London ramp up activity into the New Year and achieve their ambitions for 2016.

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BAE Systems eyes more growth in 2021, confident on long-term

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BAE Systems eyes more growth in 2021, confident on long-term 2

By Sarah Young

LONDON (Reuters) – British defence company BAE Systems forecast another year of growth in 2021, helped by Germany’s recent order for Typhoon jets and strong demand in its Electronic Systems unit, and was confident about its longer term outlook.

Defence has so far been one of the few sectors largely unaffected by the coronavirus pandemic, with governments sticking to military and security commitments, and in some cases raising them.

BAE, which builds combat ships, submarines and fighter jets, said that underlying earnings per share would rise by between 3% and 5% in 2021.

Two big acquisitions it made last year in the United States, its biggest market, would boost its higher-margin Electronic Systems unit, which provides flight controls, electronic warfare and surveillance capabilities, it said.

Further in the future, BAE Systems is confident of more Typhoon orders and extra work in Britain, its second biggest market.

Chief executive Charles Woodburn said he expected additional orders from Germany for some Tornado replacements and said there were other European opportunities to go for, believed to include Switzerland and Finland.

“The outlook for Typhoon today is frankly the best I’ve seen it since I’ve been CEO of the business,” he told reporters on Thursday. He took on the top job in 2017.

BAE also expects to benefit from the UK’s biggest military spending increase since the Cold War, announced last November by the Prime Minister who named-checked BAE’s Tempest project.

“I mean obviously that again is very good news for one of our very important flagship long term programmes,” Woodburn said.

Tempest is a British-led project to build a new fighter jet alongside partner nations Italy and Sweden, which BAE hopes will eventually replace Typhoon at its production facilities.

Shares in BAE traded up 1% to 501.8 pence in early trading. The stock has lost 22% of its value over the last 12 months despite its strong performance during the pandemic.

For last year, BAE posted underlying earnings per share of 46.8 pence, a 2% rise on last year, and beating a consensus forecast of 43.7 pence.

Disruption at its factories due to COVID-19 was shortlived and strong growth elsewhere offset declines in sales to commercial aviation customers impacted by the pandemic.

In a year when many companies were left cash-strapped by COVID-19 and axed their dividends, BAE announced a dividend of 23.7 pence for 2020, higher than the 23.2 pence it paid out in respect of 2019.

(Reporting by Sarah Young; Editing by James Davey and Elaine Hardcastle)

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Daimler truck unit to focus on CO2-neutral technology

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Daimler truck unit to focus on CO2-neutral technology 3

BERLIN (Reuters) – German luxury carmaker Daimler said on Wednesday that its plan to spin off Daimler Trucks will allow the world’s largest truck and bus maker to become more profitable and focus more on developing technologies to cut carbon emissions.

The spin-off plan, announced earlier this month, should make the unit more agile, profitable and able to develop CO2-neutral drive technologies for trucks and buses, Daimler said in a statement.

Daimler said the truck business had seen a recovery in the fourth quarter, especially in North America and Europe, selling 121,000 units, almost double that of the second quarter, when sales were hit by the coronavirus pandemic.

For 2021, Daimler Trucks forecasts revenue to be significantly above the prior-year level and is aiming for a significant increase in adjusted return on sales to 6-7%, up from 2% in 2020.

(Reporting by Emma Thomasson; Editing by Caroline Copley)

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Outsourcer Serco resumes dividend, raises 2021 outlook on NHS boost

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Outsourcer Serco resumes dividend, raises 2021 outlook on NHS boost 4

(Reuters) – Serco Group Plc reinstated a dividend and raised its 2021 forecasts on Thursday, after the British outsourcer posted a 20% jump in annual revenue, bolstered by its services to the country’s COVID-19 test and trace programme and U.S. acquisitions.

Revenue is now expected to be about 4.2 billion pounds ($5.95 billion) for this year, while underlying trading profit is forecast to be around 175 million pounds, the company said, roughly 10 million pounds higher than its forecast in December.

Serco announced a shareholder payout of 1.4 pence for last year, after suspending them in 2014 as part of a restructuring drive to overcome a string of contract failures and profit warnings that ramped up debt and hurt its reputation.

Chief Executive Officer Rupert Soames said that one of the key factors in deciding to restart paying a dividend was that “any concerns we had about liquidity have proved groundless,” adding that the company has re-entered the debt market and has been cash positive.

Sales in 2020 rose to 3.88 billion pounds from 3.25 billion pounds in the 12 months ended Dec. 31, while underlying trading profit rose 36% to 163.1 million pounds.

($1 = 0.7064 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Rashmi Aich)

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