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ADDING VALUE TO MANUFACTURING BUSINESS

ADDING VALUE TO MANUFACTURING BUSINESSA NORTH WEST SUCCESS STORY

Manufacturing is deeply rooted in the history of the North West and, despite the flight of the more labour intensive industries to lower cost economies such as China, the sector is still a major contributor to both output and employment.

The UK is the World’s ninth largest manufacturer with output of $231 billion. Within the UK, the North West is the leading region with £16.1 billion of value added comprising 12.7% of UK manufacturing. The sector employs 315,000 in the North West alone and East Lancashire is home to numerous high-technology businesses. A significant sector in every way.

PM+M have been adding value to manufacturing businesses in the North West for almost 100 years. Our services have evolved to meet the needs of innovative businesses in the demanding 21st century economy. We help our clients with:

Business growth Specialist tax advice Information for decision taking Outsourcing International support Ownership succession

“ We work with our manufacturing clients at a board level. Providing

strategic level input, challenging thinking in high growth businesses.”

BUSINESS GROWTH

Our business experts help manufacturing clients develop in three key ways. Through our rigorous approach to business planning, we challenge our clients to define clearly how their growth strategies can be delivered and translate them into action plans, with milestones against which progress can be measured.

Growth inevitably requires financing, whether for a new machine or for increased working capital. We can help you find the money you need to fulfil your plans.

Growth by acquisition is a quick way to increase in size, but it is vital that you get it right. You need to find the right target, value it, negotiate a deal, investigate its affairs, complete all the contractual details and also have a robust post-acquisition plan. We can help you every step of the way.

“ One of our larger engineering clients adopts a dual strategy of organic

and acquisitive growth. We have identified a number of possible targets and helped them complete the acquisition of complementary businesses by advising on price, deal structure and tax as well as carrying out a thorough due diligence process. Not only have we advised them over successful acquisitions, we have also advised them which ones to walk away from. The outcome? A profitable, well funded and well diversified client.”

SPECIALIST TAX ADVICE

Research and development tax credits give enhanced tax relief for qualifying expenditure. There is a common misconception that only pure research and development activity done by boffins will qualify. In reality, many activities qualify.

Patent box is a new initiative which allows companies who have either registered a patent for themselves, or have acquired the exclusive territorial licence to exploit a patent in a product they have developed, to reduce their tax rate to just 10% on the sale of products incorporating the patented item.

Capital allowances are also a key tax relief, particularly for businesses that invest heavily in plant and machinery. Most accountants will claim all available allowances on easily identifiable plant. However, there are often further available allowances hidden in the fixtures of a property that may easily be missed.

“ Relief can also be gained for labour intensive projects where the costs of

research and development relate wholly or mainly to salaries. Over the last 8 years, one of our clients has spent £5.3 million on research and development salaries, which has given them additional tax relief of £3.6 million. ”“

For another client, we made a claim using the new first-of-class rules for companies whose products are so complex and substantial that building a prototype is not feasible. The expenditure on this over two years was £2.2 million resulting in a tax saving of £490,000. ”

“ PM+M have a specialist capital allowances consultant able to assess

properties and identify such allowances. Recently, we identified £392,000 of unclaimed capital allowances for one of our clients representing a tax saving of £196,000. ”

INFORMATION FOR DECISION TAKING

At PM+M, we believe that it is vital for any business to have quality information on which to base important decisions.

This is particularly important in a manufacturing business where there can be many different kinds of inputs, processes and outputs.You need to know which products make you money and where you can make improvements. Not only do we look at the historic picture, we also look forward by forecasting your profit and loss account, balance sheet and cash flow so that you can see the pinch points before they arrive. We also have contacts within the manufacturing software industry so we can introduce real IT expertise into your business.

“ One of our larger engineering clients operates a diverse business

in the automotive and aerospace sectors. When they wanted to implement divisional reporting we were able to review their nominal ledger structure, help them change their accounting system and even provide training on their chosen software package. ”

OUTSOURCING

For smaller businesses, our philosophy is to enable entrepreneurs to focus on activities most likely to generate income and profits, i.e. sales and product development. However, there are lots of back office things that still need doing.

Our Run My Business service is specifically designed to allow the entrepreneur to concentrate on business development by outsourcing as much of the financial accounting and administration as required, freeing up valuable time in the process. Key elements of Run My Business include management accounting and payroll provision but it can extend as far as bookkeeping and VAT returns.For more information visit www.runmybusiness.co.uk.

INTERNATIONAL SUPPORT

As members of Praxity, we are ideally placed to provide support worldwide to both importers and exporters alike.

Praxity is the 8th largest association of business advisers in the world with representation in 84 countries. We are also specialists at providing assurance services to subsidiaries of foreign businesses, acting for the UK operations of German, French, Dutch and Turkish parent companies amongst others. The foreign owners value us for our local knowledge and acknowledged technical expertise.

“ One of our smaller manufacturing businesses makes products for the

agricultural sector. Through Run My Business we provide bookkeeping support and monthly management information. We process weekly and monthly payrolls, deal with in-year and year-end filing and also pay their employees via BACS. ”

“ One of our UK clients needed to find an advisor based in Hong Kong.

We were quickly able to recommend one of our fellow Praxity members, knowing that they would receive the same level of expertise that we offer. ”

OWNERSHIP SUCCESSION

Many of our manufacturing clients are also family businesses.

PM+M are corporate members of the International Centre for Families in Business (“ICFIB”) and key members of our team are also professional members of ICFIB. We are highly experienced in the delicate matter of family ownership succession.

“ One of our family owned engineering clients asked us to help

with their succession planning. Dad was approaching retirement, there were 3 sons working in the business and the prospect of a non-family member taking over as MD and owning some shares. We were able to identify each person’s aspirations, resolve conflict based on perceptions of inequality and prepare the way for a non-family shareholder. The whole team now communicates well and is highly motivated with a clear plan in place for the future. ”

Call: Richard Ainscough FCA

on 01254 604327 or 07711 525841Email: richard.ainscough@pmm.co.uk

Call: Jim Akrill MBA, FCA, CF

on 01254 604353 or 07795 466356Email: jim.akrill@pmm.co.uk

Call: Neil Jones ACA

on 01254 604348 or 07748 982774Email: neil.jones@pmm.co.uk

Visit: www.pmm.co.uk

THE BENEFITS OF CHOOSING PM+M TO ADVISE YOUR MANUFACTURING BUSINESS

Because we have concentrated on this sector for many years, we have been able to focus our services to create value in areas where our clients tell us they need help.

Defining business goals and creating achievable business plans Accessing finance for capital investment, working capital and acquisitions Saving tax whilst investing in the future of the business Developing fit-for-purpose management information systems Creating time for the business owner Going international Handing over the reins of ownership

We don’t charge for exploratory conversations! If you would like to discuss your future plans then please contact one of our manufacturing team.

chartered accountants corporate finance technologies wealth management family business