Since joining Shorts in early 2014 I have noticed a welcome mood shift – the grim acceptance of the hard slog of recession now seems to have at long last been replaced by genuine optimism for the future. Whilst not universal of course, this shift has been reflected not only within our own firm’s growth but also during many discussions with both clients and other professional advisors.
This positive outlook is turning into actions within our client base with many more clients planning constructively for the long term - those long delayed ‘big decisions’ about the future are now more frequently being made and then actioned.
It has been heartening to see a number of our clients considering or completing acquisitions during the year and rewarding to advise further businesses on their expansion plans, often involving significant capital expenditure. Much of this has been made possible by a welcome return to more normalised funding markets, with good projects finding a positive response. With both banks and equity providers showing a willingness to support good businesses, a number of companies we have advised have been able to source the appropriate finance for their growth plans.
We have also seen an increase in business owners looking at their long term exit planning. With many businesses now being able to reflect on a stronger track record of financial results, shareholders are feeling that the time may be right to exit at a price that meets their expectations. Whilst I would caution that in terms of multiples and deal structures we are not back to 2007 levels, it is true that fair prices are now firmly back on the agenda. Indeed a number of our creative and digital industries businesses have received acquisition approaches whilst they are still at a relatively early stage of development, further highlighting the overall increase in business confidence. As an alternative to a trade sale, a Management Buy Out is also a viable exit route for an increasing number of businesses, as funding availability combines with solid historic financial performance and a positive future outlook.
I am therefore hopeful that 2015 will be the year that more of my clients reap the benefits of taking those ‘big’ business decisions.
Tags: Corporate Finance
