Lawyers call for stamp duty freeze

A Quintent of leading Scottish property law firms has called on Alistair Darling, the Chancellor, to freeze stamp duty in an effort to boost the flagging housing market.

The ELPG group – which is made up of firms Warners, the Lints Partnership, Neilsons, Drummond Miller and Leslie Deans – has handed in a petition to Darling at his constituency office in Edinburgh urging him to consider either freezing all payments or dropping the first £125,000 tier of stamp duty.

Leslie Deans, senior partner of Leslie Deans & Co, said that it was vital that the Chancellor of the Exchequer considered a complete stamp duty freeze to help revitalise Scotland’s property market.

He said: “Compared to the rest of the UK, Scotland’s property market is remaining resilient but we cannot just count on that continuing for the foreseeable future.

“First-time buyers are becoming increasingly reluctant to purchase a property and we have far more people selling than buying at the moment.”

The last time a stamp duty freeze was implemented was in 1992 during a dramatic slow-down in the UK property market.

The tax is currently charged at 1 per cent on homes between £125,000 and £250,000, 3 per cent between £250,000 and £500,000 and 4 per cent over £500,000.

In a separate move, upmarket estate agent Savills called on the government to either exempt first-time buyers or levy the tax on the seller rather than the buyer.

Menzies in bad shape over airline slowdown

PROFITS at John Menzies plummeted by more than a fifth this year as the slowing world economy took its toll on the company’s core business.

Falling cargo and passenger volumes in the US and Europe led to a drop in half-year profits from £15.3 million to £11.4m, a fall of nearly 22 per cent.

But yesterday the group’s management was bullish about the second half of the year, promising it would meet expected profits by the end of 2008. Analysts are predicting profits of more than £36m.

Yesterday’s fall, which included a one-off £3.5m cost of starting up new businesses, came as the company estimated cargo shipment will fall 3 per cent in the second half of 2008.

The company is hopeful that a cost-cutting programme – particularly in the loss-making US business – and new operations in rising markets, such as India, will offset this

Scottish Finance House spreading bet to Asia

ONE of Scotland’s most- respected investment houses has predicted continuing economic woes as consumer spending collapses and investors focus on putting their money in safe havens abroad.

James Fairweather, chief investment officer and head of global equities at fund management firm Martin Currie, predicted more heavy weather for the UK and US economies, with the number of company insolvencies in both countries on the verge of a big rise due to foundering consumer spending and tighter-than-ever lending criteria.

Fairweather’s analysis of a wide range of global economic indicators guides the company’s investment choices for some £12.5 billion of funds on behalf of customers like financial institutions and pension funds.

According to those indicators, debt has rarely been so hard to come by as banks ratchet up lending criteria. Speaking at an investment briefing in Edinburgh, Fairweather said the era of cheap debt driven by low interest rates is over “for a generation” and that this will have a slowing effect on the economy.

Foreign Investment brings in £14 billion

FOREIGN direct investment is worth about £14 billion to the Scottish economy, according to property consultant DTZ.

In a report, it claims that Scotland’s share of overseas cash is nearly double that attracted by New York and is almost at the same level as London. It added that foreign employers are responsible for around one in seven jobs north of the Border.

Edinburgh, Glasgow and Aberdeen all appeared in the top ten of 200 UK areas hosting major operations for foreign firms.

Murray pulls out of Rangers deal at the last minute

RANGERS chairman Sir David Murray has revealed that he came within hours of selling the club, but pulled out of the deal at the last minute because he doubted the buyers’ long-term ambitions.

The Ayrshire entrepreneur has told Scotland on Sunday that details of the deal had been finalised after two months of secret negotiations, but says he changed his mind just two hours before signing the final documents last year after the would-be owners outlined plans to downsize.

Murray said: “We were all ready to go. Donald (Wilson, Murray International Holdings’ chief executive] had negotiated it for months with complete confidentiality.

“Everything was pretty much agreed and then I said: ‘Look gentlemen, before we do this, can you tell me how you’re going to run this club?’

“I’m sitting there with all the legal documents in front of me and they outline their plans. ‘We’ll carve this up, we’ll sell that off’, and after a while I said ‘Enough, we’re not doing the deal.’ We got up and walked out. We took our papers and went out of the door. It wasn’t for Rangers. In my opinion they did not want to take the club forward in a football way.”

He added: “That’s the closest I’ve come to selling; a few hours last year in a nice London hotel.”

Murray has been under fire in recent weeks from large sections of the Rangers support after an early Uefa Cup exit at the hands of Lithuanian minnows FBK Kaunas was followed by the sale of SPL Player of the Year and Ibrox favourite Carlos Cuellar to Aston Villa for almost £7.8m.

The purchase of Pedro Mendes from Portsmouth for £3m and a bid for US star Maurice Edu has failed to quieten the discontent, with David Edgar of the Rangers Supporters’ Trust referring to the club as a “rudderless ship”.

However, Murray defended his group’s record of investment in the club, and said: “They must look at the financial underpinning the Murray group has done at Rangers. Let’s be under no illusions: it’s cost us £100m. I’ll tell you this, unless you’re backed by proper cash this club will have to downsize. There is an economic crisis out there.”

Connect Scotland plans to re open in 2009

 

THE relaunched Connect Scotland does not expect to have a director at the helm until early next year when it is also likely to resume its fundraising events for early-stage companies.

The funding body folded last month under a growing debt pile, but Glasgow Opportunities (GO) has combined with two English business networking agencies – Connect Yorkshire and Connect Midlands – to acquire its assets and bring it back to life.Group’s chief executive Isabell Majewsky, who moved to Glasgow last October after forming Connect Midlands, said: “A consultation period will begin with interested parties and the plan is to start up again within six to eight months.

“During that period we will search high and wide for either a homegrown executive or someone with international exposure to get the right individual to become director, not chief executive, of the relaunched Connect.

“We will also devise a powerful portfolio of services for the technology sector,” she added.

Before Connect Scotland closed, it appeared to enjoy the benefits of a healthy corporate membership, including Scottish Enterprise and Bank of Scotland.

Since 1996 it had been instrumental in securing £220m in private equity, helping 165 companies to present their business propositions to potential financial backers including Wolfson Microelectronics, Stem Cell Sciences and Microemissive Displays. Connect’s Dragons’ Den-style fundraising events for young technology companies also became highly popular in the investment marketplace. A planned annual conference in October has been cancelled.

Despite its apparent success, Connect Scotland, based on a University of California model, struggled with mounting debts and ran into problems when attempting to secure new sources of income.

Majewsky said that GO Group and its partners plan to urge those blue-chip members to continue their involvement with the reformed Connect, which will also be a catalyst for the creation of a more formal Connect UK.

They will be told the new networking body will be different from its previous entity in terms of devising a programme to reflect a changing marketplace.

“The market has changed and therefore Connect Scotland must change too. GO Group knows that we must develop this asset in order to provide lasting support.”

They hope to create a “potent synergy that will flourish both in Scotland and beyond”.

John Griffiths, director of Connect Midlands, said: “I know that together through the Connect UK network we can offer a strong and varied programme of support for high-growth businesses seeking investment.”

GO Group and the English-based Connects have been quick off the mark to acquire Connect Scotland’s assets. Other bodies such as ScotlandIS, the software trade body, had expressed an interest in filling the gap left by its demise.

Air Partner is flying high to the sky

PRIVATE jet contractor Air Partner www.airpartner.com said full-year results were expected to be ahead of market forecasts as its diverse geographic reach and customer base helped it through the economic uncertainty.

The firm, based at Crawley, West Sussex, expects sales for the year to 31 July to be up about 30 per cent and pre-tax profits up about 20 per cent. Air Partner was formed in the early 1960s and now claims to be the world’s leading air charter provider, with 23 offices in 15 countries.

Scotland’s boutique hotels are thriving

THE country house hotel and townhouse hotel market in Scotland remains buoyant despite the credit crunch, it was claimed yesterday.

Experts at property company Knight Frank say wealthy individuals with cash reserves are looking to invest in the long-term security of a solid property as well as a profitable business.

This has led to increasing interest in the multi-million-pound  property market.

David Reid, the firm’s Scotland partner, said owners of small hotels are being “more creative” with what they do with the properties – using them as a country base and also renting out rooms as upmarket bed & breakfast, or using the facilities as a venue for events such as weddings and parties.

Speaking as the company published its hotels review, Reid added that properties recently marketed by the firm were being snapped up more quickly than in previous years – despite a slowdown in demand for mid- market properties.

He said: “These people perhaps aren’t doing so well in their companies, but have cash reserves. They perhaps want to work from home and generate a bit of extra income.”

Reid claimed that smaller boutique hotels or B&Bs – suited to city town houses or country estates – were becoming increasingly popular.

Reid continued: “One of the properties we currently have on the marketwas originally run as a full service hotel, but since the owner decided to scale it back to an upmarket B&B she saw her profits increase five-fold due to reduced costs.”

The report added that buyers such as WG Mitchell Holdings – owners of the Radisson SAS on the Royal Mile in Edinburgh and Rossmark Hotels – are helping stoke purchaser interest in hotels worth more than £10m.

Maxima Holdings announce Robust trading year

IT SERVICES group Maxima Holdings reported that annual pre-tax profit rose almost a quarter and said that trading continued to be “robust” at the start of the new financial year.

Profit before tax for the year to 31 May jumped 24 per cent to £5.2 million – on the back of revenue up 47 per cent at £46.7m. Net debt was £8.5m, which includes a cash outflow on acquisitions of £6.1m.

“Trading continues to be robust with the early months of the current financial year being ahead of the same period last year, despite the slowing economy,” said chief executive Kelvin Harrison.

He added: “We continue to be confident that our high levels of recurring revenues from our large, diverse and stable client base, predominantly in the mid-market, will provide a foundation for continued growth and that we will accrue the expected benefits from recent acquisitions during the year.”

Further acquisitions will be pursued “selectively”, the company said in yesterday’s statement. Last month, the firm bought up DXI Networks.

Maxima’s final dividend of 3.6p per share takes the total for the year to 5.6p – up 8 per cent on last time.The full article contains 209 words and appears in The Scotsman newspaper.

YouGov deal falls and effects downturn in revenue

MARKET research group YouGov yesterday warned that its full-year earnings would be less than expected after a mysterious failed takeover deal cost it £1.2 million.

The firm, which conducts high-profile political polls, also blamed increased investment as it said underlying operating profits would come in at about £8.5m – £1.8m lower than expected by its house broker.

But the group added that gross profit margins were ahead of market forecasts, with revenues of more than £40m expected for the year, in line with the group’s expectations.

Yesterday YouGov would not give any details of the failed acquisition that had hit its figures, saying only that talks over a “significant” deal with a company it refused to name had recently been terminated.

The group’s earnings are also being affected by an expected £2m of investment this financial year, which the group said was being made at a faster pace than originally thought.

It is pumping the cash into staff and business development, setting up integrated data centres and launching offices in Berlin and California.

YouGov has been expanding internationally, with three acquisitions over the year to July, in Scandinavia, Germany and the United States. It said the takeovers helped boost revenues, although it added the group was seeing organic growth of more than 35 per cent in its existing UK and Middle East businesses.

YouGov has launched online research initiatives through its recent takeovers, such as BrandIndex, which measures public perception of consumer brands using a 200,000-strong online panel of respondents.

The London-based firm yesterday announced its first partnerships in south-east Europe, securing deals in Turkey and Greece. Director Panos Manolopoulos has been appointed chief executive of international partnerships to oversee these joint ventures. He will step down from the board to focus on the new role.