Archive

Archive for January, 2016

Tesco

This report has just been published and it is certainly very welcome. Perhaps it’s what everyone in the industry knew already but it will probably serve to ensure that their grossly cynical attitude towards suppliers will at least be softened.

The signs are that this is the case but I would not be in the slightest bit surprised if standards slip once again when the gaze is averted

What was extraordinary was that internal emails were sent spelling out how to withhold payments to suppliers. The arrogance and complacency in commiting such behaviour to record tells its own story

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Battersea power station

imageWork has been progressing on one of London’s most striking landmarks and also it’s most neglected. It’s a rare piece of architecture that entices you to stare each and every time you pass with sight whether it be from the embankment or snaking out of Victoria station by train. Even in semi dereliction Battersea  power station stood proud and strikingly dominant over its immediate surroundings. In essence it was and is a genuinely beautiful piece of art.

Like all great art and especially architecture, it is enhanced by its immeadiate surroundings. The wide open spaces and the curve of the river were perfect so with th unarguable case for preservation it would have been expected that such context would have been taken into account

No chance. Redevelopment is very much in progress and the results are ugly and completely out of tune as well as being nigh on disrespectful. Hemmed in on all sides by yet more riverside apartments the impression given is that of a great elder statesman being mugged by ugly upstarts

Sure the development was required in some form or another to enable preservation but surely once in a while maximising the bottom line should come second to the great pleasure that great public art can give the millions who have gazed at this stunning structure.

 

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Please. Do not do that in the car

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At the risk of sounding grumpy, there is one curse of modern communication which has taken me to stage of saying, do not contact me that way

It is the call from inside the car hands free whilst driving. I can barely hear a word. The conversation is inevitably tense as the driver tries to keep from Mounting  the pavement. Then there  is one cut off after another. “I am sorry about that ” as a conversation you don’t really want is discounted for the fifth time

Of course, if it is an important client then I tend to live with this painful method of conversation but when it’s account managers from finance houses chasing my leads or just “catching up” then I am simply going to be a lot less tolerant

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“Alternative finance” Is it that easy?

As you may be aware, next year brings in legislation compelling banks to refer clients rejected for credit, to “alternative finance” platforms.

I think this is an absolute joke.

I regularly use “alternative platforms” and have very good relationships with the significant players in the market. They are a breath of fresh air and much needed competition  for the existing lenders but they are far from being the only solution. Furthermore they more often than not charge much higher rates than traditional lenders

As I understand this, the underlying assumption is that if say HSBC reject your application for credit then Barclays or a second tier lender like Aldermore will too. This is complete nonsense

Furthermore there is the prevailing view that lending can simply be completed on line. This may well be the case for straightforward loans but is certainly not usually feasible for a revolving facility and long term crucial relationship

Naturally as a broker my comments could be interpreted as being influenced by my role but when I see that 71% of smes only contact one lender when seeking finance and knowing the huge variation within what is an increasingly widespread market I am also bound to say that there is clearly a need for strong specialist advice rather than online form filling

 

 

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Renationalising the railways

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There has been considerable amount of speculation and discussion regarding the possibility of renationising the railway operating companies with the familiar complaints about fare costs and level of service. This is very much a pet issue for the new labour leadership and the appearance at various protests may have helped engage the disgruntled but probably hasn’t truly given the impression of an issue being addressed seriously.

Whether anyone believes that the network should or shouldn’t have been privatised is frankly neither here nor there. We are where we are and the questions have to be aimed at what benefit nationlisation will bring. The answers are certainly not what the starry eyed would have us believe

Rail operating companies make a net profit of 3%. That is the obviously the very maximum saving that could be made on fares in the event of nationlisation. 30p on a £10 ticket. To effect more saving would require subsidy which in turn would have to be raised from the tax payer. This is simple stuff

But even that insignificant saving is certainly the very best we could possibly hope for. Nationalised industries have an appalling record of cost control simply because there is no genuine financial incentive for them to do so. It is very easy to imagine that 3% saving being immediately wiped out by loosened cost control.

And to achieve this? This would not come free. The governement would have to spend billions to renationalise. Billions of the tax payers money

Would services improve?  As a very regular  rail user I can only take as I find but services in all the lines I use are massively improved from twenty years ago. Punctuality is very good on the crowded swt routes I use to the extent that I rarely check to see if the train is expected on time

Railways have been and should continue to be improved but none of this comes at zero costs. The campaigners should be looking at hard facts and numbers rather than promoting an ideal which is simply nothing more than a pipe dream

 

 

 

 

 

 

 

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“Devaluing the debt” a lender speaks

Yesterday a very good business contact of mine passed on a comment made by a single invoice discounter about my method of brokering. Apparently I “devalue the debt” . How do I do this? I do this by talking to a wide variety of lenders

Clearly a heinous crime.

But what exactly was he saying and what does his comment tell us about some prevailing attitudes in the market?

What he is stating is that I do not give any lender the freedom to simply go and quote whatever they wish and frankly stitch up the borrower. Unfortunately my experience talking to some other brokers and posing as a potential borrower myself has proved that this is too frequently the case

I take the attitude that if the borrower has given me their trust to find the best possible deal then that is what I will do. If this lender has a difficulty with that approach then I will be using them with increased caution. To put it politely

Is the issue of trust  particularly difficult to grasp? For too many in this sector I believe and that is frankly a disgrace

 

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