Financial Directions October Update

Acquisitions hit new lows
Expenditure on acquisitions abroad by UK companies decreased from £3.7bn in Q1
2009 to £2.4bn in Q2, the lowest value since Q1 2004, while UK company
expenditure on UK acquisitions decreased to £0.7bn in Q2 2009, the lowest
quarterly value since Q3 1992, says the
Office for
National Statistics. Acquisition expenditure in the UK by foreign
companies decreased from £12.3bn in Q1 2009 to £0.4bn in Q2, the lowest
quarterly value reported since Q2 1987. Kraft’s bid for Cadbury’s could change
all that.

Big freeze for salaries
Around 60% of companies have frozen salary levels in the past year, with the
median salary of the FTSE-100’s highest paid directors being £800,000. Actual
bonuses earned in 2008-09 reduced to around 90% of salary, compared with last
year’s figure of around 110% of salary, says Hewitt New Bridge Street. It adds
that there is evidence some companies have reflected falls in their share price
by reducing share award levels as a percentage of salary.
www.nbsc.co.uk

Distressing times
As a result of its position in the past decade as the leveraged buyout capital
of western Europe, the UK has the highest percentage of financially distressed
companies in the region, according to
Equus,
citing a Close Brothers report using Debtwire data that finds the UK had just
under a quarter of all distressed assets as at 1 July 2009. The UK had 24% of
all distressed companies in 2009.

European confidence
Global investor confidence rose by 3.5 points in August to 122.9 from July’s
level of 119.4, led by Europe, according to the latest index of investor
confidence from
State
Street. European institutional investors displayed increased risk
appetite and their confidence benchmark rose 4.3 points to 109.2 from 104.9 last
month. But confidence among North American institutional investors declined
slightly by 2.2 points from 120.6 to 118.4 and Asian investor confidence fell
2.3 points from 94.1 to 91.8.

SMEs losing sleep
Forty-four percent of small business owners have suffered sleepless nights over
the economic crisis, according to
Close Invoice
Finance. Its latest Small Business Finance Barometer found seven
out of 10 owner-managers ‘significantly more stressed’ as a result of the
downturn.