Review of the year 2008: Part One

IT was a year of change, shock, tragedy, slowdown and rescue. Ian Briggs takes a look back at an eventful 2008 for the Yorkshire business community.

JANUARY

The Yorkshire deals scene got off to a flying start as Skipton Building Society subsidiary Skipton Information Group (SIG) bought direct marketing business Broadsystem in a deal worth £7m. The North Yorkshire mutual also announced the promotion of Steve Haggerty to the board as managing director.

A sign of things to come arrived in January as a further 45 jobs were shed after the group behind the Ponden Mill retail brand went into administration. Administrators acting on behalf of Marston Mills revealed that the jobs were lost at the group’s operations in Keighley, West Yorkshire.

The Bank of England held interest rates at 5.5% as Marks & Spencer announced it was to create one of its largest stores outside London at the Eastgate Quarter development in Leeds and over-the-counter medicine and healthcare product supplier Galpharm Healthcare, founded by former Huddersfield Town chairman Graham Leslie, was bought by American drugmaking giant Perrigo for more than £40m.

Ritchey, the North Yorkshire animal tagging and healthcare business, stepped up to the AIM market and changed its name to Animalcare after a £14m acquisition saw it treble in size.

And good news that the region’s deals market reached a record high in 2007 was tempered by the deaths of Paul and Linda Spencer of Brighouse in a helicopter crash. The pair ran Country Baskets, which sells artificial flowers and decorations and employs hundreds of people across the country.
 
FEBRUARY

Ajaz Ahmed, the co-founder of internet service provider Freeserve, attacked business support bodies in the region after claiming start-ups were facing financial ruin by being given “false hope”.

Sir Ken Morrison was included in the inaugural Yorkshire Icons Hall of Fame as Geoff Taylor was named as the new head of Deloitte’s Leeds and Newcastle offices in place of Les Platts.

Natural chemicals company Croda saw profits treble thanks to the acquisition of Uniqema as Asda unveiled plans to create more than 9,000 jobs.

Shareholders at Unit 4 Agresso voted to approve the Dutch company’s £158m takeover of software specialist CODA.

In a sign of things to come, Britain’s biggest mortgate lender HBOS said it expected the market to “remain uncertain” for the rest of this year as it announced a 4% fall in pre-tax profits to to £5.474bn.

Yorkshire-based buyout specialist Endless successfully raised £164m in its latest investment fund, while the parent company of low-cost airline Jet2 issued a profits warning.

MARCH

Tributes were paid to Phillip Tate, 32, a founding member and investment director at Leeds-based investment fund Endless, who died instantly after falling 80 feet down a crevasse in a snowboarding accident near Chamonix in the French Alps.

Tunstall, the Yorkshire-based company that provides home alarms for the elderly, was bought out in a £514m deal, while Nexus Vehicle Management, the Yorkshire business which allows corporate users to source vehicles from more than 40 suppliers online, underwent an £11m buy-in management buyout (BIMBO) led by Isis Equity Partners.

Chancellor Alistair Darling gave his first Budget in which he confirmed that his controversial plans to raise capital gains tax (CGT) for business owners from 10% to 18% would go ahead accompanied by the limited concessions he was forced to announce for entrepreneurs in January, but said the 13 million people working in the SME sector would benefit from his measures. He also said the UK economy would continue to grow and was more resilient to deal with global shocks.

Bradford-based shoe group Stylo concluded a deal to sell its Shellys brand, Yorkshire-based private equity firm Key Capital Partners (KCP) supported a £12.5m secondary buy-out of Neville Johnson Group, one of the UK’s best known fitted furniture manufacturers, with backing from Yorkshire Bank, and family-owned Yorkshire chemicals firm A H Marks was bought by Australian group Nufarm for £75m.

APRIL

The new integrated Business Link for Yorkshire and the Humber launched on April 1.

Toy shop chain Toyzone, which has 20 stores including two shops in Sheffield and others in Castleford, Harrogate and Skipton, called in administrators after suffering poor sales over its crucial Christmas period, and BAE Systems said it was to shed 450 jobs in Yorkshire. The Toyzone jobs were saved after the stores were bought by York-based JA Magson.

Specialist debt collector Lowell Group was sold to a private equity company for more than £200m. Exponent Private Equity acquired the Leeds-based group from a fund managed by Cabot Square Capital in a deal to help finance Lowell’s continuing expansion.

General insurance software systems company SSP Holdings acquired insurer systems business Insure/90 and Ilkley-based wireless communications specialist Sarian Systems was acquired in a cash deal by US NASDAQ quoted technology firm Digi International.

Bradford & Bingley moved to quash speculation that it was being forced to raise cash through a rights issue while Yorkshire housebuilder Consort Homes called in administrators after being hit by the slowdown in the housing market.

Consumer lender Cattles said it was to raise £200m in a rights issue to support an application for a banking licence and funding diversification and HBOS said it was to raise £4bn through a rights issue.

MAY

Directorbank, the UK’s leader in boardroom appointments for private equity backed businesses based in Leeds acquired Hanson Green, the non-executive search firm, for an undisclosed sum.

Sheffield-based drug delivery group The Medical House announced the sale of assets of its loss-making orthopaedic business Eurocut for £500,000 which allowed it to clear all of its bank debt.

The chairman of Marketing Leeds, entrepreneur Jan Fletcher OBE, announced she was to step down from the organisation after three years and would be replaced by Nigel McClea, head of office at one of the city’s biggest law firms, Pinsent Masons.  

In aviation, low-cost airline Jet2 announced the launch of a new route to New York from Leeds Bradford International Airport.

Northern Foods said it would give up a £45m contract producing ready meals for Marks & Spencer. It said that following talks with the high street giant it had decided to “mothball” its Fenland Foods factory in Grantham, Lincolnshire, where 730 staff are employed making mainly Italian meals.

Bradford & Bingley announced a £300m rights issue of shares to strengthen its capital position just a month after saying it did not need to raise more cash.

Drax Power Station signed a £50m contract to create the world’s largest biomass co-firing facility at its Yorkshire power station.

JUNE

The month opened with the shock news that Bradford & Bingley had parted company with chief executive Steven Crawshaw and that a US private equity firm had proposed tp take a 23% stake in the bank as its shares plummeted following a profits warning.

More positively law firm Ward Hadaway gave Yorkshire’s profile as a leading legal and financial centre a further boost after unveiling plans to open an office in the region.

York-based housebuilder Persimmon contributed to worries in the property sector after announcing it was to make hundreds of staff redundant following a sharp downturn in house sales across the Midlands, North West and Yorkshire.

Celltran, the university spin-out company which has developed a skin treatment for burns and chronic wounds using a patient’s living cells, went into administration.

Visit TheBusinessDesk.com on Monday to read our review of the second half of 2008.