BQ West Midlands Summer 2016 Special Feature

LEGAL AND FINANCE QUARTER IN PARTNERSHIP WITH:

SPECIAL FEATURE

Sandra Wallace DLA Piper’s UK managing partner talks to BQ

INSIDE FOCUS: MHA MACINT YRE HUDSON

ASSET BASED FINANCE

SPECIAL FEATURE DLA Piper

Rising to the challenge Sandra Wallace, the UK managing partner at DLA Piper, enjoys her challenging work as one of the nation’s top lawyers. Steve Dyson reports

SPECIAL FEATURE DLA Piper

Sandra Wallace discovered just how seriously DLA Piper considers its female workforce when she was heavily pregnant with her first child back in 2001.

Her maternity leave was about to start just before a series of interviews for partnership at the global law firm, but rather than delay her application the company adjusted the process to make sure she was included.

“I was due to be off on maternity leave just after the interviews and so they brought my date forward,” recalls Wallace. “That was a bit scary!

Usually, there’s a nervous camaraderie in going for partnership as a group of people, and so doing a lot of it on my own was daunting.

“But then it felt so good when they told me that I’d succeeded and would be a partner. And they valued me enough to do it then, rather than saying: ‘Wait until you’re back’, which was great.”

Born in Edgbaston, Birmingham, Wallace was the first of six siblings to go to university.

She graduated with her law degree from Wolverhampton University in 1994 and started work at a company called Needham & James.

This firm soon merged with Dibb Lupton and Broomhead in 1993, which later became Dibb Lupton Alsop, before being renamed as DLA Piper after a merger with a US-based firm in 2005. DLA Piper now has more than 4,200 lawyers located in over 30 countries.

Wallace, who has three children and lives in Sutton Coldfield, went back to work part-time after her first child, and her job has remained ‘flexible’ ever since. For her, this means planning time off when she needs it, like for most of August so she can be with her children during school holidays.

She says: “DLA Piper has an excellent approach to agile or flexible working, and has done throughout my partnership career.

“Today, people want a work-life balance, and this is something employers should be encouraging.

It means you get the best out of people, because we all need time away from work. That flexibility means staff are at their happiest, which is when you’re going to get the most out of people.

“People want to deliver to the highest standards, but even more so when they know that the company allows flexibility. So it makes business sense.”

The highlight of Wallace’s 22-year career came

last year when she was asked to become DLA Piper’s UK managing partner – an invitation she says came “out of the blue”. The three-year role has never before gone to anyone outside of London. Sandra was at the time the UK Employment Group Head.

She says: “It’s a big, strategic role in a huge international practice, so it took me a while to decide. But I’m so glad I did because it’s been great to see how we’re driving the business forward. I work in a tremendous office, but now I’ve visited all our other offices, getting to know all the teams and strategies, and having inputs into those. Together we’re going to meet and exceed our budget this year, despite all the caution we’ve seen in the run-up to the European referendum.

“That’s given me and the business real confidence. It’s so pleasing to know the qualities we have, and to see how we’re able to get everyone working across the group. We have so many cross-group workings now, giving staff opportunities to work on really exciting projects, regardless of place. This has included international secondments to places as far away as California, Dubai and Australia, and seeing all that culture and all those connections coming back to Birmingham and our other UK regions.”

The secondments are part of what’s known as DLA Piper’s ‘One UK’ approach, which involves acknowledging the strengths of each office, but then being able to draw on the specialties and resources that might be elsewhere. “What it means,” says Wallace, “is that you do a job with the people who are best for our clients. That might mean calling on extra resource, or drawing on particular expertise from another office. We’re one firm, but one firm across the UK – whether that’s Birmingham or Sheffield, for example.

Having a global footprint means we are trully full service.”

DLA Piper’s traditional roots were in northern England, but it made the decision to expand into the West Midlands in 1993 because of the region’s strategic importance for sectors such as life sciences, manufacturing and financial services.

DLA Piper’s work in the region now covers everything from industrial aerospace to the leisure sector. Sandra has developed a marketleading reputation, offering strategic and commercial advice on business reorganisations,

international cross border projects, executive disputes and staff relations, as well as complex disciplinary, grievance and whistleblowing matters. She also acts on high-level discrimination, equality and diversity matters.

One case saw Wallace acting for a leisure industry client on changes to pay, terms and conditions for 1,500 employees, handling employee relations issues, consultation and contractual changes. Another saw her defending an employment tribunal litigation involving claims of discrimination, constructive dismissal and whistleblowing. This included securing a Restricted Reporting Order to protect the client’s company reputation and brand.

Wallace also advised on a major post-acquisition project which involved a business reorganisation to align marketing, sales and support functions in the UK and internationally.

She says: “It’s never been DLA Piper’s aim to be the biggest. Does that sound crazy? Actually, it’s not. We feel it’s more important for us to offer strategic relevance to our clients. That means being wherever our clients operate, and offering them the expertise whenever it’s needed.”

Wallace likes “watching people who I’ve worked with develop and grow, and now seeing them lead the business”. And she enjoys having “great relationships” with clients, where they feel comfortable telling her if they’ve had a “dreadful day” because they know “there’s someone on their side”.

Wallace adds: “Getting to that point with a lot of clients is the best part of the job. But the really important thing for me is to be enjoying what you do. Yes, it’s hard work and can be really challenging. But if you enjoy it, it’s worthwhile.

We work hard for our clients and for the business, but we should always enjoy it as well.”

T: 0121 262 5913 M: 07971 14336 E:sandra.wallace@dlapiper.com

PROFILE MHA MacIntyre Hudson

MHA MacIntyre Hudson continues to add strength in depth Top 20 accountancy practice MHA MacIntyre Hudson recently completed a deal to merge with established accountancy practice, Shoesmiths. The team from the Edgbaston practice has already moved into MHA MacIntyre Hudson’s offices in Birmingham’s Colmore Business District.

Chris Barlow and Elaine Shoesmith

The decision to join forces comes within a year of MHA MacIntyre Hudson’s merger with Bloomer Heaven and is part of its continuing expansion strategy, not only in Birmingham but nationally such as with the recent addition of MHA Reid Williams in Reading.

Shoesmith’s main service lines were audit, accounting, personal and business tax advice, serving clients in a range of sectors.

The partners believe that the ethos and values of the companies are so closely aligned and that the skill base at both MHA MacIntyre Hudson and Shoesmiths would strengthen the offer to all their clients.

MHA MacIntyre Hudson chairman Rakesh Shaunak said: “Birmingham continues to be an exciting marketplace and we continue to see it as a growth area. Our Birmingham office is providing us with a strong presence in the Midlands region.

“Both firms have a similar outlook, are a good cultural fit and we’re confident that the firm will continue to deliver services to a high level. This merger will provide access to a wider suite of services for Shoesmith clients and enhanced career and development prospects for all members of the expanding team.”

MHA MacIntyre Hudson is a patron of Made in the Midlands, a privately run peer group for MDs and CEOs of manufacturing and engineering firms in the Midlands. Chris Barlow, Birmingham Office Managing Partner explains: “It underlines the firm’s commitment to the sector and cements a long term relationship with manufacturing businesses. We are particularly proud of sponsoring Made in the Midlands’ Young Inventor Award. “We are also active members of the Black Country Chamber which goes some way to reflecting our client base that extends across Birmingham, where the office is based, and the three boroughs and city of the sub-region.”

The period after a Budget is always a busy one for accountants, tax and business advisers such as those at MHA MacIntyre Hudson. Recent changes to the treatment of dividend income in the Budget has inevitably led to even more tax planning discussions with clients – many of which are owner managers – about how they pay themselves. There are, of course, many factors to consider including timing, mix of salary and dividend as well as payments into a pension and any loans to the company.

Corporation tax is another key tax consideration,

including optimising the timing of fixed asset purchases in order to make the best use of capital allowances. MHA MacIntyre Hudson has particular expertise in helping clients use research and development tax opportunities and - by just doing what they do – businesses can often help finance their growth objectives. MHA MacIntyre Hudson has been offering specialist advice in the region for decades, including audit and assurance; tax; business strategy; corporate finance; corporate recovery; counter fraud; financial services; outsourcing; and financial training.For MHA MacIntyre Hudson’s partners it is clear that while having a highly qualified and experienced team of chartered accountants is essential, just being a traditional accountancy practice is no longer enough. The firm’s strength lies in its people who have expertise across a range of sectors including manufacturing and engineering; healthcare; not for profit; property and construction; technology; transport and logistics; travel and tourism and supporting international business.

MHA MacIntyre Hudson’s support extends beyond Birmingham with fourteen offices located in the main economic hubs across London, South East, Thames Valley and East Anglia.

To find out more about MHA MacIntyre Hudson and how it can help grow your business: Please contact Chris Barlow, Birmingham Office Managing Partner

0121 236 0465 chris.barlow@mhllp.co.uk www.macintyrehudson.co.uk @MHUpdates @chrisbarlow_mh

SPECIAL FEATURE Asset based finance

Boosting business growth Asset based finance is increasingly establishing itself as a funding option for ALL businesses as it’s popularity amongst bigger businesses soars says Jeff Longhurst, Chief Executive Officer of the Asset Based Finance Association (ABFA) Asset based finance has in the past sometimes been seen as a funding option largely aimed at small businesses. However, the reality is increasingly different.

It is now a core source of funding for businesses of all sizes – the number of larger businesses using invoice finance jumped by 25% in just a year. It appears clear that larger businesses are increasingly using it to complement ‘traditional’ sources of finance *.

We’ve seen increased appetite from the UK’s largest businesses to secure finance to fulfil growth plans and expand order books.

Businesses of all sizes understand that, as it is secured against invoices and other assets, it can be a less risky form of finance for funders to provide – this means it is highly competitive price-wise. This also means big businesses can often get quicker decisions on asset based finance than on other products.

Invoice finance dominates the asset based finance market, accounting for around 80% of, and is where businesses secure funding against their unpaid invoices. The remaining 20% represents the fast-growing area of asset based lending, with which, in addition to debts, businesses can raise funding secured against a range of other assets they own, including

“We’ve seen increased appetite from the UK’s largest businesses to secure finance to fulfil growth plans and expand order books” inventory, property and machinery.

One of the major factors in big businesses’ increased use of asset based finance is that it is competitively priced and the products can be bespoke to the needs of that individual business.

Asset based finance is now an established part of the commercial finance market and there is increased appetite from UK businesses to secure funding through this route. Whilst the availability of finance from more traditional sources was relatively slow to recover from the credit crunch, the asset based finance market opened its doors to businesses of all sizes and there remains significant capacity to provide more finance to more UK businesses.

A more in-depth look into the amounts secured also generates interesting conclusions.

The amount of asset based finance secured

by UK businesses against stock jumped 22% in just a year, passing the £600m barrier in 2015 from £499m in 2014, as businesses increasingly look to capitalise on increased demand from customers by drawing down

finance against existing stock in order to fuel longer-term growth. Factoring amongst SMEs has also increased by 3%, demonstrating that smaller businesses, whilst cautious, are also taking advantage of some of the funding that is available. As a response to the uncertain economic climate, more clients are taking advantage of the additional services available to them, such as credit protection, which allows for peace of mind without restricting growth.

We’ve seen a significant increase in payments made to clients under these types of facilities which provide assurance to SMEs that they will be protected in the unfortunate event of something going wrong with their debtors.

The overall amount of funding provided to businesses through asset based finance including invoice finance as well as asset based lending - rose by £260 million in the past year to stand at £19.7 billion at end of December 2015. * Analysis of businesses with a turnover above £50m, as of 31st December 2015.

SUPPORTING INTERMEDIARIES AND BUSINESSES THROUGHOUT THE MIDLANDS HG REWINDS Confidential invoice discounting (CID), property and cash flow loan to support strategic acquisitions Undisclosed “From a very early stage, Shawbrook demonstrated that they were interested in doing a deal and made us feel secure that this transaction was going to happen.”

Chris Taylor, Jasper Corporate Finance

ASHWORTH CID and stock funding to support acquisition £9,500,000 “Speed of execution was the key variable in respect of this transaction and Shawbrook Business Credit reacted at very short notice to meet our needs.”

Jonathon Grove, Investment Director, GIL

E PEARSON AND SONS (TEESSIDE) CID, property and cash flow loan to support management buy in Undisclosed “With Shawbrook we had access to the senior people who work behind the scenes, which was refreshing and helped the deal process considerably.”

Stephen Hayward, Managing Director, E. Pearson & Sons

Shawbrook Business Credit has the ability to provide funding across all asset classes and leverage further with a cash flow term loan for those businesses with stronger EBITDA generation. To find out how our ABL and invoice discounting facilities and high levels of personal service can help you boost your cash flow and achieve your business plans, email paul.edmeades@shawbrook.co.uk or call 07703 107488.

WWW.SHAWBROOKBUSINESSCREDIT.CO.UK

Supporting intermediaries and businesses throughout the Midlands

SPECIAL FEATURE Asset based finance

Tackling late payment SME manufacturers are forced to wait almost twice as long as larger rivals for their invoices to be paid. Jeff Longhurst looks at late payment issues and how Asset Based Finance can help The issue of late, extended and delayed payment has been widely reported as being a serious burden on business in a range of sectors.

Our research shows that in the manufacturing sector, smaller manufacturers are forced to wait nearly twice as long as their larger competitors for invoices to be paid.

Last year, SME manufacturers waited an average of 67 days – almost ten weeks – for invoices to be paid last year whereas their largest competitors, those with a turnover over £500m, waited an average of just 38 days, or five weeks.

Unfortunately, for many SMEs in the manufacturing industry, waiting more than two months to be paid is now a normal state of affairs. Worryingly, our research shows that this gap has actually increased over the last year. The payment delays experienced by SME manufacturers remained level at an average of 67 days, however, this contrasts sharply with the 9% fall in waiting times enjoyed by the largest manufacturers, down from 42 days in the previous year (as displayed in the graph below).

Late payment and poor payment practice in general is a significant issue within many sectors and appears to have become increasingly ingrained in business practice since the credit crunch. The manufacturing sector has long played a critical role within the UK economy and as late payment and poor payment practice remain a deep rooted issue within the sector particularly for small manufacturers, there is a concern that they could have a significant impact on the UK’s competitiveness and ability to attract further investment to the sector. In particular this could affect those areas, such as the Midlands, where much of the UK’s manufacturing takes place.

Indeed, all of the UK’s top five fastest growing economies were located in local authorities in the Midlands due to their thriving manufacturing sector. (Source: UHY Hacker Young) The West Midlands is a well-known centre for the UK automotive industry with

“Unfortunately, for many SMEs in the manufacturing industry, waiting more than two months to be paid is now a normal state of affairs” companies such as Jaguar, Land Rover, Toyota, Aston Martin and BMW located within the area. Substantial investment from the aerospace industry has also been made in the East Midlands. Rolls Royce, the world’s second largest manufacturer of aircraft engines has a site in Derby, and the region also supplies systems to aircraft makers such as Airbus, BAE Systems and Boeing.

But late payment isn’t the only issue that affects the cash flow of manufacturers. It is also increasingly common for large businesses to seek to impose extended payment terms in contracts with their SME suppliers.

This is a trend that began during the recession when some businesses looked to increase their payment terms in order to give themselves breathing space in the tough economic climate.

This may also be partly due to a cultural shift within many sectors which has meant that delaying payment to suppliers has become common practice for many big businesses.

This has obvious negative repercussions for

those small manufacturers, who in turn need to pay their own suppliers.

Many small manufacturers have turned to asset based finance, in particular invoice finance, in order to mitigate the impact of extended payment terms or late payments on their business. The overall amount of funding provided to businesses through asset based finance- including both invoice finance and asset based lending- reached £19.7 billion last year.

Invoice finance, in which business secure funding against their unpaid invoices, helps to ensure that small businesses are protected against unfair business practices, and are able to invest in their growth.

Small businesses play an important role within the UK economy and so it is important that they are treated fairly by big business. When this doesn’t happen, it is equally vital that small businesses understand the options available to them, enabling them to free up funds for investment, and minimising the impact of poor payment practices.

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