What do you mean you’ve never had it so bad?

Just come back from an excellent breakfast presentation at Clydesdale Bank given by NAB (their parent company) head of markets strategy Nick Parsons, a man well known to Sky News viewers.

Nick is someone who seems to have developed a habit of getting it right when it comes to economic forecasting, so when he says that 2009 is going to be horrible and that recovery won’t start until 2010 you tend to take a bit of notice. He sees the UK economy declining by about 2.6% in 2009, with growth returning in 2010 at about 1.4%. His long term view is that the normal annual growth trend will settle at about 2%. Not brilliant but still enough encouragement for businesses, while still remaining cautious, to start focusing on how to get the best of the upturn when it arrives.

By the way, if you think it is bad for us over borrowed consumption obsessed Brits, have a glance at the poor Germans and Japanese, those nations that actually still make things (as opposed to money) and still put their euros and yen aside for a rainy day. Their export driven economies have fallen off a cliff over the past few months and their pain in 2009 is likely to be greater than that of the UK. Maybe there is a moral there somewhere, although it gets confused when you look at the two economies that are going to expand more that 5% in 2009, China and India. Learning to export may still have its advantages so UK companies should take note and start looking at how they can.

Antony Doggwiler

Is it a bird? Is it a plane? It’s SuperFD!

Forget your Brad Pitts and George Clooneys. Don’t even mention Barack Obama. The new superheroes for our time are going to be Finance Directors. For from being fazed by the biggest economic downturn since the 1990/1980s/ 1970s/1930s/ever (take your pick), these normally meek and mild creatures say they are in a confident mood and ready to fight the recession.

According to a wide ranging survey from Financial Director magazine , 2009 is likely to be the “Year of the FD”. Already, say FDs, along with collecting cash and providing reliable and timely financial information, their boardroom colleagues are putting pressure on them to look for cost cuts with prime targets being staff and travel and expenditure. However they also have half an eye on the eventual upturn, with many of them saying maintaining staff morale and confidence was at the forefront of their minds.

Other issues that emerged from the survey included the fact that wholesale changes in banking relationships had yet to take place, that the downturn had forced a majority of their businesses to change their overall strategy, and the a fair number of FDs would like the government to “stop tinkering” with the economy and let nature take its course. Interestingly 68% had found something positive about the current climate (although precisely what was not revealed!).

Meanwhile another snippet from the same magazine listed the qualities that those that aspire to be FDs are going to need if they are going to achieve their goal. Polling around 4,000 companies, Professor Colin Coulson-Thomas found that they would need to exhibit “integrity, determination, independence, objectivity, balance, commitment, individuality, sensitivity, strategic and ethical awareness and a sense of accountability and responsibility.” Wow! Is that all? However he also said that “being able to explain financial forecasts and results was more important than any of the other traits.” Oh that’s all right then. For a moment we were all off down to the fancy dress shop to get our outfits before stepping off into a phone box and flying off to our next client appointments……

AIM and PLUS - The future beckons…

As 2009 continues to battle its way through snow, ice and the morass of gloomy economic statistics, two key elements of London’s financial infrastructure for smaller entities AIM and PLUS are both looking ahead off of the back of two contrasting 2008s.

For AIM the year ended on a somewhat low note with new admissions down on previous years and questions being raised about the suitability of the market for small cap shares. For PLUS based on 2008 the future looks extremely rosy, with admissions at a record level and their share trading platform going from strength to strength.

PLUS are old friends of ours and last year we ran two successful seminars with them and Orange Corporate Finance in Cambridge and Guildford . There is no doubt that PLUS is now a very serious option for companies seeking their first float and looking to raise funds for expansion.

But we support AIM too, and have viewed with interest a recent survey by top accountancy firm Mazars. The survey canvassed the opinions of both AIM quoted companies and a wide range of professional advisors and concluded that, whilst AIM had been tremendously successful in raising over £34 billion for companies from all around the world since its formation in June 1995, the market could provide more liquidity for companies if the market listed fewer but higher quality companies. With nearly 1,600 companies listed on AIM, over 60% of the AIM companies and advisors who responded to the survey said the sheer numbers of companies made it hard for individual businesses to raise their profiles and attract investors.

London needs both AIM and PLUS to give growing companies the best chance to continue to grow by issuing shares to a wider pool of investors. The challenge for both markets remains the need to create sufficient opportunity and liquidity to ensure that there is actually a market for those shares. Equally there is a responsibility for advisors to work closely with their clients in selecting the market that best suits them clients and give them the best opportunity to be successful. If this can be achieved then both markets can confidently move forward in the future, thus providing a much needed boost to our battered economy.

Is Frederick Forsyth a communist?

No of course he's not.

But disrupted by the weather, I caught a bit of the Daily Politics this week and was staggered to hear Frederick Forsyth positively raging about how bankers have got away with it and the establishment is protecting them despite collecting tens of millions in salaries and bonuses whilst they presided over the failure of our banks.

It sounds like he's tapped in to the feelings of the man in the street (or in his case the bridle path). I recently also had the pleasure of hearing Vince Cable speak. Apart from some fascinating views on the creation of "narrow" banks ie. banks which only take deposits and lend money (now there's a thought!), he mentioned how his constituents in Twickenham come up to him and rage about bankers, and when he looks under their arm they're carrying not The Morning Star but The Daily Telegraph!

I suspect that bankers haven't got away with it! This story is bubbling away and will boil over at some point.

Ash Mehta

S’no(w) use complaining if the trains aren’t running..........

Waking up to six inches of snow yesterday reminded me of the excitement we used to feel as children when occasionally schools would be shut for a day or two. How different things are when you are trying to run your own business.

According to the London Chamber of Commerce and Industry half of London businesses were operating at 50 per cent capacity yesterday. Not surprising when 20 per cent of the UK's workforce stayed at home due to snow that fell mainly on the South-East and East Anglia. At a time when we are all trying to focus on doing the basics well, meeting our promises and keeping our customers happy, business shutting down for a day or two is the last thing that is needed. Perhaps now might be a good time to assess how effectively business continuation plans operated yesterday? (Transport companies and local authorities might want to look away now).

Business continuity or disaster recovery planning often brings to mind IT back-up systems, alternative office space and off-site bomb proof safes full of data disks, spare cheque books and lists of passwords. Large scale plans for large scale disasters. Not surprising given the events of the last decade. But how well do plans cope with small scale, although far more common, events such as snow fall or flooding?

• Yesterday, did managers know what was expected of their staff when transport links were not operating?
• Did staff know what was expected of them?
• Were parents able to work effectively from home, as planned, when the schools and nurseries were also closed?
• Did somebody access and change the office voicemail message so that callers were not frustrated by a lack of information.

Some of these questions may seem low level or even petty but even small problems can have a large impact when customers’ expectations are not being met. After all, how does it look when your clients are well planned and coping with the same conditions if you are not? Hopefully most businesses coped well yesterday but I am sure all experienced something that could have been done better. Now may be the time to reflect on what happened and revise business continuity plans accordingly.

No-one can control the weather but don’t let poor planning be the reason why your business loses customers.