Crain's Manchester Business - 30 November - 4 December 2009 - (Page 1)

CRAIN’S LIST Commercial Lenders Page 14 STARTS ON PAGE 11 Banking & Finance CRAIN’S MANCHESTER BUSINESS VOL. 2, ISSUE 48, NOVEMBER 30 - DECEMBER 4, 2009 CrainsManchesterBusiness.co.uk £2 Insolvency costs dear What’s News ■ The wage bill has risen at MIDAS, the inward investment agency for Greater Manchester. Staff costs went up to £1.3m in the year to March 31, compared with £1.1m in 2008. The number of staff only increased by two, however, to 31 from 29. Directors’ emoluments increased to £142,000 from 130,000 in 2008. In the notes accompanying the accounts, the board said it “continued to be concerned” about MIDAS’ responsibility to fund the pension liabilities of employees who are members of the Greater Manchester Pension Fund, and whether the company was taking liability for pension benefits relating to previous employers. ■ American carrier Delta Airlines will restart services between Manchester and New York JFK following a suspension over the winter season. The airline announced in September it was temporarily suspending the daily service because of low demand over the winter. But services will now resume on May 2, 2010, in time for the May half term and summer holidays. ■ Harvey Nichols Regional Stores Ltd, the company which owns the Leeds, Manchester and Edinburgh outlets, has posted losses of £443,000 for the year to March, down from profits of £2.9m in 2007/2008. Sales fell 7 per cent across the three stores due to the “economic downturn and the crisis in the banking sector”. Gross margins decreased 4 per cent to 46 per cent in the year, although operating cost fell 2 per cent. At group level Harvey Nichols posted pre-tax profits of £7.8m, down from £14.4m. Sales were down 2.4 per cent across the group. ■ Law firm Addleshaw Goddard has reported a drop in revenues at the half-year point, with turnover falling by 14 per cent to £81.3m. For the six-month period, the firm saw corporate revenues fall by 29 per cent, while real estate saw a decrease of 26 per cent and finance and projects dropped by 15 per cent. The firm’s contentious and commercial practice saw a 5 per cent revenue increase to £30.5m. Managing partner Paul Devitt said: “We said that the first two quarters of this year would be tough for us, and they were. Income 14 per cent down on the first half of last year is disappointing.” ■ MMC Estates has applied to the Homes and Communities Agency to ask for support in redeveloping the Turner & Newall site in Rochdale into a mixed-use scheme. The developer said it was unable to fund any investigation for contamination on the 72-acre MEN may quit city centre for Trafford Move to industrial park would enable publisher to escape looming rent hike in Spinningfields BY SIMON BINNS MEN Media is considering moving the headquarters of the Manchester Evening News to Trafford, in a move which would bring to an end 140 years of being based in the city. The publisher has lined up Trafford Park Printers on Longbridge Road, jointly owned by Guardian Media Group and Telegraph Media Group, as a possible new home for the MEN and the 22 regional newspapers it operates from its current base in Spinningfields. Sources familiar with the discussions told Crain’s that the Trafford Park building, which is currently being refurbished for the office occupier market, is being discussed as the company seeks to escape a sharp increase in the £18 per sq ft it now pays in Manchester city centre. Falling advertising revenues have already forced MEN Media into a major cost cutting drive this year, including 78 redundancies across its Greater Manchester and Cheshire titles and the closure of all but one of its satellite offices. The company is due to undergo a review at its Scott Place headquarters in 2011, which could take its rent up to £23 per sq ft under terms it originally agreed with Spinningfields developer Allied London. The building is currently owned by German investment fund Hansa Invest and although MEN Media occupies around 40,000 sq ft, it also has almost 42,000 sq ft of vacant space it has been unable to sublet. Law firm DWF is understood to be in talks with MEN Media about taking all of the space it currently occupies although a deal is said to be some way off being agreed. Earlier talks with another law firm, SEE MEN, PAGE 18 A MegaRamp in California similar to the one planned for Manchester More failures predicted as taxman toughens up BY MICHAEL FAHY A tougher line from the taxman could lead to a fresh swathe of business failures in the first quarter of 2010, according to insolvency practitioners. Steve Clancy, a partner in the Manchester office of insolvency firm MCR, said Her Majesty’s Revenue & Customs’ stance on allowing firms time to pay back tax had hardened in recent weeks. He also detected a rise in the number of HMRC winding-up petitions against companies with tax debts. Coupled with tighter lending conditions, this has left business owners facing a cash flow double whammy. Gary Lee, a partner at Manchesterbased insolvency specialist Begbies Traynor, said he had noticed a change in attitudes from the revenue since September. He said HMRC staff who “bent over backwards” to ensure firms with debts were not wound-up during the past 12 months had become much more aggressive towards those behind with payments. Lee told Crain’s that in previous years, firms which required help from HMRC had to submit detailed cash flow forecasts from their accountants and were usually given a further 6 to 12 months to pay up. However, as part of the “time to pay” initiative launched earlier this year, firms were given up to two years to reschedule debts after brief telephone interviews and without incurring any substantial penalties. “The Crown has been the easy bank to go to,” said Lee. “When you look at your costs, you have to pay your wages, your suppliers and your landlord or your trading will stop. “The Crown seems to have become the bank of choice for firms to defer payments and there’s been no knock-on effect.” Rik Heap, managing director of Manchester-based LC Tax Strategies, said HMRC remained largely supportive of SMEs but was now looking to maximize its tax take by demanding much more robust business plans. RAMPING UP THE EXCITEMENT BY SIMON BINNS SEE WHAT’S NEWS, PAGE 2 iscussions are underway to install a MegaRamp, used for freestyle BMX and skateboarding tournaments, in East Manchester. The ramps can be up to 110 metres long and 60 metres high and in the USA they are used for events which are shown on network television and regularly attract crowds in their thousands. They can accommodate a temporary seating structure for fans, or be erected inside indoor arenas. The MegaRamp has been used at the X Games, an annual extreme sports event arranged by US broadcaster ESPN since 2004, for both skateboarders and BMX bikers. A consortium of UK investors has acquired the European licence for MegaRamp and has met with senior officials at regeneration company New East Manchester. The group is also looking at other potential sites in Greater Manchester, as well as Europe. East Manchester would be a natural fit, however, due to the possible link-up with developments already underway or planned at the SportCity site and the new £19m BMX centre which will soon be built. SEE RAMP, PAGE 18 SEE TAX, PAGE 18 Leading Page 3 PICCADILLY GARDENS MAY GET 80 METRE HIGH BIG WHEEL http://CrainsManchesterBusiness.co.uk

Table of Contents for the Digital Edition of Crain's Manchester Business - 30 November - 4 December 2009

Crain's Manchester Business - 30 November - 4 December 2009