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31st Jan

Recently EMC Director Michael Gibbs joined a group of business leaders, professional advisers, equity providers and investors as part of the latest Insider Media’s South East Roundtable.

They sat down to discuss how South East businesses have adapted to new ways of working and refocusing their growth strategies in a post-COVID, post-Brexit world.

South East businesses are having to grapple with a host of issues whilst having to adapt to new ways of working. The post-COVID, post-Brexit world for the South East is arguably set to be more pressurised than in other regions of the UK – shortages in skilled employees and reduced infrastructure investment to name just two – for which businesses need to find strategies to overcome. Ensuring businesses have the necessary tools and support to remain competitive in this fast-changing world must therefore be a high priority.

Michael’s thoughts are included below, but please click here to read the article in full:

Succession changes

There are two parts to EMC, our corporate finance team advises businesses on a variety of transactional work including selling their business and raising finance. Our growth team helps senior management teams at the coalface and they have had a very busy year helping businesses adapt to the challenges of Covid and Brexit. Covid has hastened the retirement thoughts of many owners in the market. The average age of business owners is increasing and where historically many shareholders have looked to pass on their businesses to their children, the increasing age gap between parents and children is leaving owners looking towards trade sales and other exit routes.

Supply chain concerns

At the moment there are still favourable capital gains tax rates and business valuations are still strong, especially for mission-critical businesses which have proved why they command strong valuations by maintaining and growing business during Covid. In the tougher sectors we are still seeing appetite for growth with many businesses pivoting to new product and service lines as their customer’s behaviour changes. We have seen common issues across our client base with supply chains cost increases, especially those importing goods from the Far East. For those who work on fixed-price models there is huge pressure on cost management.

A hit to margins

It’s a really difficult time for businesses to get pricing right at the moment – with an ever changing cost base and labour market businesses are struggling to pass all costs on to their customers and maintain margin. We see some businesses absorbing a reduction in their margins to keep business going but these models will only be sustainable for so long. We are seeing more companies turn to third-party logistics to help scale and manage peak seasons. An example of where this can help businesses quickly scale is the e-commerce sector which is seeing a lot of investment and M&A activity.

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