Wednesday 29 September 2010

United Biscuits – Are Bright Foods set to pay too much for their Jaffa Cakes?

United Biscuits – Are Bright Foods set to pay too much for their Jaffa Cakes?

With Bright Foods, the Chinese food giant in talks to acquire United Biscuits we have to ask one pertinent question - Is United really worth the reported £2bn?

According to our calculations, the company is probably worth closer to £1.5bn. After its assets and liabilities have been taken into account its equity value is probably closer to £1.2bn. So, while United has increased in value in each of the last 2 years, the current owners, it is worth considerably less than the rumoured price – the current owners are getting a good deal.

Clearly, Bright Foods are after United for its portfolio of brands rather than for short term financial gain and they are prepared to pay a premium for it. Hopefully, the jobs and investment will stay in the UK and not be moved overseas like in other takeovers of this type. Will new owners at United Biscuits do the same thing that Kraft did at Cadburys?

Click here to see which of the UK’s Food Manufacturers is likely to be the next big takeover story

Monday 27 September 2010

‘Green tax’ rises will spell disaster for UK Road Hauliers

Energy Secretary, Chris Huhne has backed plans for an extra £22billion in green taxes, meaning fuel prices could increase massively and spell the end for many UK based hauliers.

The Liberal Democrat minister has backed a call to see 10 per cent of all Government revenue to come from green taxes within the next five years. Forecasters have predicted that revenue from green taxes is to fall from 6.9 per cent of the total to 6.5 per cent over the next five years, in order to raise the amount to 10 per cent; an extra £22 billion would be needed.

While the increase could see fuel costs rise by an unprecedented amount, the party have argued that it would allow them to lower other taxes. Mr Huhne said: “All the evidence is that the green tax switch is popular as long as people can see the extra revenue being used to cut other taxes. Green taxes make so much sense in the current financial climate. Whatever we do with the revenue, green taxes help us meet our climate targets and our environmental goals”.

Fuel price in the UK are already considerably more expensive than on continental Europe and, coupled with change in EU regulations, British hauliers simply cannot compete in their own market. New research by market analysts Plimsoll points out that 295 UK based Hauliers are already in dire financial difficulty – they simply cannot afford further taxation.

Click here to see which Hauliers are most vulnerable to these proposals

Thursday 23 September 2010

The recession has cost 392 UK based Independent Financial Advisors a third of their value in the latest year

392 of the UK’s leading Independent Financial Advisors are worth a third less than they were a year ago in the clearest indication yet of the damage the recession has wreaked on the market. However, in a sign that the recovery is gaining traction, 360 companies in the market have actually increased in value.

It’s certainly been a tough few years. Values have fallen markedly from their peak but the number of companies that are worth more this year than last is encouraging”.

In all we identified 360 companies that have increased in value - quite an achievement considering current market conditions. Their performance adds to the growing belief that the market has stabilised and companies with their house in order can once again prosper and add value.

However, as with all recoveries there are those that struggle to recover and 392 other firms have seen their value slump by at least 30% in the latest year. They have such a lot of ground to make up and many are in such dire straits that we have issued 284 of them with a Danger rating. The post recession market is so highly competitive I would expect a number of these companies to be bought out on the cheap or decline further and eventually be wound up.

The new Plimsoll Analysis – Independent Financial Advisors will tell you instantly which companies are prospering in the post recession market place, those set to be bought out and those heading for trouble – across the whole of the market and in the individual regions.

Click here to find out which IFA's are in trouble and those powering ahead in the current market

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Tuesday 21 September 2010

Best Western Blunsdon House Hotel, UK has launched the first ever booking engine useable through Facebook.

Hotel marketing via Facebook has been criticised in the past, with some believing that it would not be useful to generate new bookings unless the hotel in question hoped to target the under-30’s. Blunsdon House Hotels have taken on a different view completely, hoping their new feature will interest some new customers, as Facebook becomes a stronger platform for businesses.

While Facebook continues to allow businesses to connect more personally with their customers, Best Western Hotels have taken it one step further. This new feature allows users to complete their entire booking process, from choosing a hotel to defining the number of travellers, completely through Facebook.

BA boss warns Middle East airlines could be a threat to UK carriers

As the European Union funds the growth of Middle East airlines, British Airways chief executive, Willie Walsh, has warned this could pose a threat on our own carriers.

Walsh has referred to an agreement between the US and Europe that prohibits government credit guarantees to airlines in the home countries of Airbus and Boeing, yet allows credits to be exported to the Middle East, leaving them with greater opportunities to expand. He said: “We have been slow in the UK and in Europe to recognise the competitive threat. We should be concerned about what is happening.”

In 2010, the UK saw a string of travel operators suffer bankruptcy after the recent economic trouble; Walsh has warned the EU is providing a threat to European airlines. He said: “We are financing our competitors by providing them with cheap access to capital. This is a very significant threat.”

The new Plimsoll Analysis - Global Passenger Airlines, gives a concise assessment of the top 300 major Airlines from around the world. Click here to see how British Airways compares to its key rivals.

Retail sales in the UK see first drop since January this year.

While John Lewis may have seen some positive figures as their profits rise by 28%, threats to the retail market are still looming. Chariman of the John Lewis Partnership, Charlie Mayfield warned there may be trouble ahead in the retail sector as public spending cuts and tax rises are still to come.

This comes just as the retail sector as a whole sees a surprise fall in sales after six months of growth within high street growth. Despite the difficult economic climate, UK shoppers have been surprisingly resilient in terms of high street spending until now.

Top economist at HIS Global Insight, Howard Archer, told Sky News: “The unexpected 0.5% fall in retail sales in August is a nasty shock and deals a significant blow to growth hopes.” It is thought that a combination of job loss worries and the intended VAT hike in January are causing shoppers to be more conscious of their spending.

The latest Plimsoll Analysis - Retailers, analysing the performance of the UK's top 500 Retailers shows that 139 are already in financial difficulty and likely to be the next High Street failure. Click here to find out who they are

Monday 20 September 2010

177 UK Tour Operators named as Zombies by Plimsoll

177 UK Tour Operators industry are now classified as “Zombie” businesses. These companies have seen their performance deteriorate to such as extent that they now exist merely to pay off their debts and survive.

They are posting growing losses and, despite the obvious freeze in the credit markets, increasing their debts. These Zombie businesses have debts at an average of 70% of turnover – they exist to service their out of control liabilities. Many are also using their suppliers to finance their growing losses, taking twice as long as to pay their bills as the industry average of 26 days.

What's worse is they are falling behind the rest and their productivity is well below the industry average. It’s hard for them to compete as their cost base is just too high. As a result, investment plans have been mothballed meaning their aging assets are further restricting their ability to remain competitive.

So can these Zombies be saved? The first thing they need to do is sort out their immediate finances. They have to convince their banks and suppliers to keep supporting them or not pull the plug. If they can pull that off then the hard work really starts. They urgently need to stem their losses and control costs. The longer it takes them to address these issues, the harder and less likely it is they will ever fix them.

However, there are attractive takeover targets among the Zombies - canny investors could pick up a bargain. Some of these companies, stuck in a zombie state because of their balance sheet, have lots of potential for new owners to turn it around. We picked 109 companies that we feel have the most potential.

Those unable to attract new buyers may have simply had their day. A combination of aging assets, rising losses and increasing debts mean they are unlikely to attract a suitor before the receivers are called. They will be forced back into negotiations with their lenders to buy more time but their future doesn’t look good.

Click here to see how the new Plimsoll Analysis - Tour Operators will give you this key industry findings instantly

It will tell you instantly which companies are prospering in the post recession market place, those taking a big gamble and those in trouble. It gives an instant performance rating on 1000 companies and highlights those ripe for acquisition.

Wednesday 15 September 2010

The union representing British Airways cabin crew, Unite, has threatened to increase the intensity of their dispute with the airline.

Earlier this year, BA cabin crew went on strike for a total of 22 days costing the airline approximately £150m. Although facing tremendous losses as well as having to cancel hundreds of flights, BA tried to make the best of a bad situation by bringing in employees from other parts of the company to take over cabin crew duties.

Unite has now warned that any further strike action would include any ground staff currently working for BA, including check-in workers and baggage handlers. Introducing these members of BA staff to strike action could potentially be catastrophic to the company.

The union needs to accept that conditions in the post recession industry are such that the airline simply cannot sustain the level of reward its members have become accustomed to. For example, salaries as a percentage of sales for British Airways are 26% compared to 14% at Virgin and 10% at Ryanair. Without a plausible alternative, the board have to cut staff, remuneration and perks if the airline is to survive.

To see how British Airways compares to other Airlines click here and read the following analysis on the Global Airlines

Monday 13 September 2010

Halifax has released their own version of figures relating to house prices in the UK, giving us a more positive outlook than Nationwide.

Halifax has said that due to lack of activity within the housing market, house price inflation has cooled. The group has predicted that by the end of the year, house prices will be back to the figure they entered 2010 at.

The report contradicts information released by Nationwide recently in which it was said that house prices have continued to drop and the falling market was causing a “perfect storm” for first-time buyers as well as those amid selling a house.

Housing economist at Halifax, Martin Ellis, told BBC News: “Prices are now at a very similar level to that at the end of last year. Activity has also been largely static since the start of the year. These developments suggest that the market is broadly stable, with house price inflation having cooled since last year, when supply shortages helped to push up prices.”

Not everyone has shared the positive outlook Halifax has taken on the health of the housing market for the future. Housing developer, Barratt Homes has said the improving conditions in the market are not helping financial earnings. They reported a loss of £33m this year and said that there was still a problem with housing shortage in the UK.

The latest Plimsoll Analysis, assessing the ability of Housebuilders to survive the next trading period, has issued a performance warning to 617 companies. If the market continues to stagnate or worse goes into decline again, what next for these struggling companies?

Acquisition activity in the UK could be the way to move forward in the current economy

BBC News reported this summer as having a record number of mergers and acquisitions and with so many companies feeling the heat after the economic downfall, it seems that this is the best way to ride out the storm.

This doesn’t just open doors for those that were hit hard recently. As the recession forced company spending to slow and brought on a newfound reluctance to agree any new deals, some UK businesses have now found themselves with an agreeable budget for opening new doors.

After experiencing such negativity in the business world in recent months it must be a warming feeling to know that there may be a bright side for all those months spent counting company pennies.

David Pattison, senior analyst at Plimsoll said, "Anyone on the acquisition trail needs to look first at the companies that have a decent gross margin but whose overall financial strength is compromised or has declined in recent years. These types of companies usually have solid fundamentals but their current owners have lost control of costs. They are often undervalued and with a little restructuring have big potential for their new owners.

If you want help finding these types of companies click here".

Wednesday 8 September 2010

Travel market - Airport hotels see guest numbers soar as travellers see benefit

Airport hotels used to carry the connotation of being a last resort after a cancelled flight or for convenience during a quick business trip, but it seems this is all changing.

Recent surveys have shown that travellers are becoming more likely to choose an airport hotel than the previously more popular city-centred option. As people try to keep an eye on their pennies, the option of cheaper airport hotels has proven to be more attractive to those not wanting to overspend following the economic crisis.

As more airport hotels offer useful amenities to their customers such as free Wi-Fi (an important factor when considering accommodation, business or pleasure), and extras like parking included in the price, budget-conscious travellers have seen convenient advantages in choosing an airport hotel.

Compared to the normal city-based hotel that visitors tend to opt for when choosing where to sleep, choosing an airport hotel can mean an average saving of 42%* for the traveller as well as the added benefits of extras included in the price.