The Manchester office of a national accountancy firm has said it is seeing a “pause of breath” on deals as firms are “focused on protecting their own business” amid the coronavirus pandemic.
Dave Kendrick, head or corporate finance at UHY Hacker Young in Manchester, which primarily focuses on mergers and acquisitions within the SME space, told BusinessLive it is “still a little bit uncertain about how it’s exactly affecting things”.
“I think everybody’s a little bit panicked, and I don’t mean we’re stopping deals but almost we’re not talking about the deals at the moment because everybody’s been internally focused on protecting their own business.”
Mr Kendrick said “uncertainty and nervousness is never good for business, typically”.
“We’ve got no idea how long this is going to be here for, we’re looking at other countries and using those as a bit of a benchmark, but they’re very different countries to the 海角视频.
“I think it’s probably the biggest thing we may see in our lifetime, it’s almost like our own world war.”
He said the extent of the spread of the coronavirus “slapped everybody round the chops”.
“Until two weeks ago we were looking at this year thinking we’ve got a good year, strong pipeline, good activity, good traction with transactions we’re working on and then this hits us. I think last week we were perhaps a bit naive and unaware of how it was going to escalate in the 海角视频.
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“If we step back, we had the election in the back end of last year. which clearly was not helpful for transaction activity and economic stability, we then got a majority government which, love him or hate him, definitely brought some stability and confidence back into the financial markets, and we then saw an upturn and we signed a few new mandates.”
Mr Kendrick said it’s “not just the hospitality and leisure sector” that needs help from the government, because “it’s going to affect every business”.
“This is not just people going to pubs and restaurants, everybody’s going to be isolated at home or working from home and client interaction is going to be limited, it’s going to be affecting every single industry out there.”
Mr Kendrick, who works a lot in the automotive sector said he has been told that “orders have been cancelled left, right and centre, because people are nervous”.
“People aren’t going through the door and I think they’re still seeing people from a servicing point of view because people are probably thinking they need their car servicing in case they need to use it.
“But you can soon see as it escalating over the course of the week and there’s rumours around more permanent transport or movement bans and school closures, you can just see people staying away from anywhere that might involve contact with people they don’t need to have.”
But he said “different businesses will react differently”.
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“Some will take a very extreme view and think we need to plan for the worst and hope for the best, and we’ll look to cut costs, look at headcount, take emergency measures they think fit for their own business which might put them in a better position.
“I think business that run with a short working capital cycle and businesses lacking liquidity may struggle because they are people-run businesses and, while they have the expectation that there will be changes in trading environments, if you were a business that’s got a typical working captial cycle of a month, all of a sudden there’s a 12-week period of uncertainty and mobilisation.
“If that’s going to be months of very little business, for these companies then that’s going to take them out, unless the government steps in and puts preventative measures in place or support regards to perhaps temporarily suspend back payments or PAYE payments or rates payments.”