UK M&A appetite returns –but long way to go

takeover bid for Swiss rival GAM.

cent over the three months to April 30, Wetherspoons announced in May. Analysts have suggested the firm is in a strong position to continue growth despite pressure on household budgets.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “As punters feel the pinch, JD Wetherspoon has been mopping up new business, as it’s managed to keep prices lower to pull in the crowds. Shares are around 40 per cent higher since the start of 2023.

UK tax system punishing families: CPS

JESSICA FRANK-KEYES

THE UK tax system must be reformed so that families are no longer unfairly penalised, a think tank has warned.

DEALMAKING in the UK’s financial services sector reached its highest level in a decade in the first half of the year as top firms scrambled for safety in scale amid economic volatility, fresh data has revealed.

Financial services M&A hit a high of 160 deals in the six months to the end of June, up from 138 in the same period in 2022, according to figures from EY shared exclusively with City A.M. Deal value slumped, however, as market turmoil and a gloomy economic outlook continued to spook dealmakers in the UK.

Total deal value fell from £11.5bn in the first half of 2022 to £4.7bn in the first half of 2023, representing the lowest level of activity by value since the start of the pandemic, according to the new figures.

Asset managers, brokers and smaller investment banks have been at the forefront of the deals flurry this year as they hunt for scale in a more tricky investment environment. Among the headline deals of the half was Deutsche Bank’s swoop on Investment bank Numis, a tie-up between brokers Finncap and Cenkos, and Liontrust's

Tom Groom, UK financial services strategy and transactions leader at EY, said the figures pointed to a rebound in appetite for dealmaking “in the wake of the pandemic” but sounded a note of caution over the significant drop in value of deals.

“Economic headwinds at the start of the year – such as rising interest rates and inflationary pressures – caused many lenders to pull back from financing large deals, and the value of M&A activity is now less than half of where it stood during the same period last year,” Groom said.

The number of non-UK firms acquiring UK targets increased to 35 in the first half of 2023, up from 30 in the first half of 2022, but total value fell from £3.0bn to £0.2bn over the same period.

As for UK firms acquiring overseas targets, deals dropped from 34 to 28, and from £4.9bn to £2.8bn.

“The key drivers of M&A – being growth, innovation and synergies between businesses – remain, and as firms develop approaches to deliver M&A in this higher rate environment, we anticipate a return to higher deal values,” Groom said.

Iceland set for red hot profits amidst supermarket scrutiny

ICELAND has revealed forecasts that would mean the frozen food chain makes its highest profit in a decade this year, according to The Times. Iceland said last week in a set of financial results shared with bondholders that this year’s underlying profit will likely be its strongest in ten years. The news comes as supermarkets face pressure from the government over profiteering and ‘greedflation’ claims, due to food price inflation.

Executives from the top supermarkets received a grilling from MPs just two weeks ago.

Iceland, however, has pinned down their success to cost-cutting measures and sales growth.

Last year, Iceland’s sales rose 6.9 per cent to £3.7bn but underlying profits fell by £20.7m to £120.2m due to energy costs.

Current executive chairman Richard Walker took over from his father Sir Malcolm in January.

City A.M. has contacted Iceland for comment.

Couples with two children and a single earner of £60,000 will pay over £7,000 more tax than if both parents earned £30,000 each, Centre for Policy Studies (CPS) researchers found.

Research found single-earner married couples on the average wage in Britain would pay more tax here than in France, Germany, or the US –and more than the OECD average.

The centre-right-leaning think tank is urging ministers to prioritise turning the marriage allowance into a transferable parental personal allowance, at a cost of £3.6bn in a bid to slash poverty.

A move by the government, when it can afford to cut taxes, to create a personal transferable allowance would reduce poverty by 4.3 per cent, with one in 10 households seeing a net income rise of more than five per cent and poorer families benefiting the most, the CPS said.

Ranil Jayawardena, chairman of the Conservative Growth Group, said: “Families should be free to keep more of their money and spend it however they want. They earned it and they should keep it. That's why we need to reform income tax to make it family friendly.”