in:brief magazine - Spring 2014

in:brief napthens.co.uk

SPRING 2014 ISSUE THIRTEEN

THE NEWSLETTER OF NAPTHENS SOLICITORS

Business roundup North West Business Insider editor Chris Maguire makes his predictions ahead of the 2015 General Election. page 2

70 years of holidays In:brief profiles Fylde Coast business Partington’s Holiday Parks. page 3

When the sun goes down Leading lights examine the night time economy.

Hillendale operates dealerships including a Jaguar business in Bolton

pages 4&5

Napthens advises on Hillendale sale

Legal update Suzanne Dean, Head of Debt Recovery, looks at changes to bailiff operations.

A team from Napthens has advised on the successful sale of long-standing client the Hillendale Group.

Hillendale, formerly owned by managing director Lee Collins, is one of the country’s top performing Land Rover dealerships, employing 72 people. It operates a Land Rover dealership and Jaguar repair centre in Nelson, and a Jaguar dealership and repair centre in Bolton.

Now the respected company, which has received top accolades from both Jaguar and Land Rover for its customer service, has been acquired

by Vertu Motors plc, the sixth largest automotive retailer in the UK. The deal was worth £8.2million.

Vertu, founded in 2006, is listed on the Alternative Investment Market of the London Stock Exchange, and operates a nationwide chain of franchised motor dealerships.

Napthens has worked with Lee Collins for several years, since his original management buyout of the Hillendale Group.

A team led by Head of Corporate Keith Melling advised Mr Collins on the sale of the company. Keith was assisted by Claire Hynes and Richard Robinson of the Corporate Department, Commercial Property solicitor Dan Boulton and Charlotte Nuttall of the Employment Department.

Keith said: “Having acted for Lee and his team on the original management buyout of the Hillendale Group, I’m delighted to have worked with him on realising the fruits of his efforts over the last 17 years.

“Lee has worked tremendously hard to make the business such a success – it is consistently recognised for its levels of customer satisfaction for both Land Rover and Jaguar marques at a national level.

“This acquisition will cement Hillendale’s position as a quality business which now has the backing, resources and support of a major company which can only be of benefit to its customers.”

In a statement to the stock exchange, Vertu said the deal would extend its reach from Leeds, Guiseley and Bradford into Lancashire, and offer the company an entry into the Jaguar franchise.

page 6 The company described Hillendale’s business as ‘well established dealership operations in attractive motor retail locations.’

The deal increases Vertu’s footprint to 108 sales and aftersales outlets across the UK. Lee Collins commented: “I’ve worked with the Napthens team for a number of years and once again I’ve been very impressed with the help, advice and service they’ve provided – the team have made every effort to help me complete the sale by adopting a commercial and effective approach within tight timescales.”

Face2Face: the pros and cons of investing in forests. page 7

A guide to…

Family partner Helen Lucking examines Collaborative Law. page 7

welcome / business roundup: / give us a break:

in:brief welcome

Lancashire at a crossroads Chris Maguire, editor, North West Business Insider Trying to predict what the economy is going to do in the next 12 months is a fool’s game – except when there’s a General Election set for May 7, 2015.

Politicians of all parties have an uncanny knack of throwing in some good news stories in the run-up to an election so I predict the economy will continue to grow; unemployment will fall; and inflation will stay in check.

Allan Sumner Commercial Property partner

Welcome to the latest issue of in:brief which covers a host of topics from Court of Appeal decisions to practical guides.

This edition kicks off with a guest column from Chris Maguire, editor of one of the region’s premier business magazines, North West Business Insider.

Chris takes a look at how next year’s General Election has the potential to transform Lancashire’s economy and infrastructure.

Once again we throw the spotlight on two of our clients – Partington’s Holiday Parks which is now celebrating its 70th year in business, and the former dairy farm turned fitness and leisure club, Crow Wood. Both are fantastic success stories which showcase some of the entrepreneurial spirit Lancashire is rightly known for.

This edition, our special report throws the spotlight on the region’s night time economy.

Industry leaders including Andrew Buchanan of Thwaites and Ruth Eastwood of Marketing Lancashire, examine how this industry is faring in the North West.

Meanwhile, Face2Face looks at how investing in woodland and forestry is a booming industry, with the sector becoming an attractive option for alternative investment thanks to factors including favourable tax treatment.

As usual, our very own experts offer advice on a range of topics, from a recent Court of Appeal decision on disputes between commercial property landlords and tenants, and new regulations affecting how bailiffs can operate, whilst David Hardman, Head of our Wealth Management Department, examines annuities.

We hope you enjoy reading, and don’t hesitate to contact us to find out more about any of the topics mentioned.

Thank you

2 in:brief SPRING 2014

Some major infrastructure investments will be announced; we’ll see more M&A activity; and all the talk will be of growth. So everyone will be happy right? That’s the plan, but even the best-laid plans can come unstuck.

As editor of North West Business Insider I speak to the region’s companies on a daily basis and I think the North West – and more specifically Lancashire – is well placed to capitalise on the economic recovery.

Politicians have finally recognised the value of making things and the county has twice as many people employed in manufacturing (20 per cent) than the national average.

Manufacturing will grow as will the appetite to export. However, Lancashire’s strength could be its weakness. As manufacturing grows so will the need for more staff and

the skills gap is widening. Where are the next generation of engineers coming from? If the biggest companies snaffle up the best apprentices what will the companies further down the supply chain do?

Nobody likes recruiting. It’s timeconsuming, expensive and hit-andmiss. However, recruit the wrong staff and it can put the skids under even the best businesses.

Access to finance is still an issue – but not for everyone. Banks want to lend to copper-bottomed businesses but they often don’t need the cash while start-ups, which need the money, haven’t got a credit history or sufficient security to convince the lenders.

Ultimately the biggest challenge facing all businesses is growth.

Hunkering down in a recession is relatively easy but there comes a point where companies have to invest in growth. It could be extra staff, cap ex, mergers and acquisitions.

Owner managers wanting to sell need to demonstrate growing profits to attract buyers and ambitious plans for the future to entice the best staff. It’s a virtuous circle.

I’m excited by Lancashire’s prospects but the litmus test will be what happens with the Enterprise Zone at BAE Systems.

Chris Maguire

If Lancashire’s Local Enterprise Partnership is successful in attracting some big-name companies to the Enterprise Zone then it could well act as a catalyst for others to follow suit.

The consequences of not doing so are not worth considering.

Contact: Chris.Maguire@newsco.com @ChrisInsider

Give us a Break!

David Bailey, commercial property disputes partner, looks at a recent Court of Appeal decision and its impact on landlords and tenants.

Break options are common fuel for major disputes between landlords and tenants. A break clause in a lease enables a tenant to end the lease early, usually provided that certain conditions are met. If tenants get it wrong, the financial implications can be significant.

Usually the lease provides that for a break notice to be effective the tenant must have paid all the rent due up to the end of the break date. But what if the lease ends mid way through a payment period where monies are paid in advance?

Must the tenant pay all the rent and can the landlord keep the “overpayment”?

Marks and Spencer (M&S) took advantage of a conditional break clause to end its lease of four floors at its HQ in January 2012, rather than occupying the office until February 2018. However, this date fell in the middle of its quarterly rent

period, and it had already paid rent and other charges in relation to the full quarter to its landlord BNP Paribas, in advance of the break date. M&S sought reimbursement.

The High Court found in favour of M&S deciding that a term should be implied into the lease resulting in BNP Paribas having to repay an apportioned amount of rent and other sums which related to a break period. The landlord appealed.

The only question on appeal was whether, in the absence of an express apportionment clause, could the court imply into M&S’s lease a term which said that it was entitled to an apportioned refund of monies paid in advance but which related to the broken period.

period after it exercised the break clause. As a result BNP Paribas will keep £1 million in rent.

If you are a tenant the golden rule has always been that if there is no rent apportionment clause in a lease and your break clause requires you to pay all sums of rent due as at the break date - you must pay all rent when it falls due, even if it relates to a period after the break date.

Previously the M&S case offered light at the end of the tunnel for tenants who had paid monies beyond the break date in that they may be able to reclaim it later. However, the Court of Appeal decision underlines that this will only be possible in very exceptional circumstances.

David Bailey

Contact: David.Bailey@napthens.co.uk 01772 904385

The Court of Appeal reversed the High Court’s decision and ruled that M&S was not entitled to reclaim rent and other charges covering the

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Fat Media: / Partingon’s: / Kingsway House:

Digital agency sold

Landmark lease

A team from Napthens including corporate, employment and commercial property experts, has advised on a deal to create one of the largest creative digital marketing agencies in the region.

the Napthens team led by Corporate partner Rob Dobson, and including Louise Smith, Employment solicitor; and Commercial Property solicitor Gareth Birch.

A growing gym chain has taken space in a landmark East Lancashire office building thanks to advice by Napthens’ Commercial Property team.

Rob Dobson said: “The acquisition is a great fit and will create a significant business which is well placed to seek out fresh opportunities and success.”

Xercise4Less was founded in Leeds in 2006 by former professional rugby player, Jon Wright.

The team assisted in the sale of Lancaster-based Fat Media to Cumbrian entrepreneur David Durnford. As part of the acquisition, an agency also owned by Mr Durnford, Motive Technology, will be re-branded Fat Media and the two companies will join forces.

Fat Media also operates offices in Barrow and London, and employs 68 staff. The company was advised by

Mike Gibson, managing director at Fat Media, said: “We’re immensely proud of the phenomenal growth story of Fat Media over the past nine years. Our aim was to continue this growth long into the future and to do that we needed the external investment and experience to take us to the next level.”

He announced earlier this year that the company would open 15 sites across the UK after securing a multimillion-pound funding package, with plans for 100 gyms in five years creating as many as 4,000 jobs.

The Fat Media team winning a recent award

The business has taken a lease for 37,000sq ft of space in Kingsway House, Burnley.

70 years of holidays The Fylde Coast and Blackpool recently topped the Daily Telegraph’s list of the best 20 staycation venues in the UK, which was welcome news for holiday operators in the area but not a total surprise for a family business that is celebrating its 70th year in business.

Partington’s Holiday Parks is a family owned and run business based in Thornton-Cleveleys on the Fylde Coast and operates six holiday parks across Lancashire, Cumbria and North Yorkshire. It is run by the fourth generation of the Partingtons with brother and sister team Rob Kearsley and Andrea Challis at its helm.

The management team applies the traditional values of ‘family first’ alongside providing a range of holiday parks that have everything for UK holidaymakers. By their own admission Andrea and Rob are proudly ‘hands-on’ and are passionate about the business.

“Furthermore, we’re always looking at how we can improve the holiday experience and we continually reinvest in our holiday parks as they are effectively our customer’s second home.”

Knowing their customers inside out is also a secret to the business’ success. Andrea added: “We have something for everyone. Our Windy Harbour Holiday Park caters for families and with it being by the coast, the seaside retreat offers funfilled action for all the family.

Alternatively if it’s peace and quiet you’re after, then our five-star Black

“We’re in a very privileged position in that we are given the chance to help create holiday memories that our customers will treasure,” said Andrea. “That is something that we never lose sight of.”

The business employs up to 200 people at its six sites including its Thornton-Cleveley headquarters.

Rob said “The passion for what we do runs right across the business, our people love what they do and this shines through in the holiday parks we have and what is on offer at each one.

“We’re also mindful that we are in a competitive marketplace and knowing what the customer wants is critical. This ranges from providing free Wi-Fi, popular kids clubs and identifying new holiday homes and caravans that our consumers will love.

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The business markets itself as a ‘value brand’ with no compromise customer service, and fully staffed, first-class facilities.

Beck Park in Cumbria and our Tarn House Park near to Skipton provide idyllic settings for a well-earned break.”

opportunity to grow the business and exploit the lucrative staycation market, welcoming thousands of visitors per year.”

Rob and Andrea have been working with Napthens for a number of years and Head of Corporate, Keith Melling and Commercial Property partner Martin Beardsworth have been advising them on the company’s growth plans. Keith said: “The business has a great reputation and a very strong customer base.

The recent recession has also played into their hands and unlike many other leisure operators Partington’s has used it as an

With their customer-focused approach and real passion for what Partington’s does, it’s clear why the family-run business has enjoyed a successful 70 years and is looking forward to providing memorable holidays for their future customers. www.partingtons.com

Kingsway House is the former home of retail business Shop Direct, which closed in 2010 and is now owned by property investment business East Lancs Regeneration Ltd. The deal was made possible thanks to David Hill, partner in Napthens’ Commercial Property team, advising his client East Lancs Regeneration.

Xercise4Less is the latest tenant to take space in the building after specialist business Fuel Card Services moved into the major town centre site, and the gym will operate on the ground and first floors of the building.

Plans are now in place for a coffee shop chain to take space in the building, and the top floor of Kingsway House is still being marketed.

David Hill said: “This is a prime site in Burnley town centre, and there has been a range of speculation about potential uses.

“Xercise4Less is a great business concept that has really caught the imagination of the public and investors, and it’s good to see Burnley chosen to benefit from investment in this way.”

Contact us: We welcome your feedback and comments on any of the articles in this issue of in:brief. Feel free to drop us a line at Marketing@napthens.co.uk or visit our in:brief page on our website, www.napthens.co.uk/inbrief.

Partington’s Holiday Parks

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SPRING 2014 in:brief 3

special report: night time economy

It’ll be alright on the night Town and city centres after dark have long been a topic of contention.

With the proliferation of TV programmes reflecting the night time economy at its worst, consumers are sometimes put off enjoying their local town centre at night.

However, the UK’s night time economy represents a booming industry worth £66bn annually and in Lancashire 2.5 per cent of the population is employed in cafes, bars, restaurants, hotels, cinemas, theatres and large venues.

With many of the county’s towns and cities experiencing growth in this area, private and public sector organisations now see the night time economy as an opportunity to offer a new visitor experience and boost local economies.

In:brief asks Lancashire’s movers and shakers how the industry is fairing in the county and how it will develop in the coming years.

“The night time economy is an integral part of the town or city centre economy, contributing to the wider identity and sense of place,” said Ruth Connor, Chief Executive at Marketing Lancashire.

The county’s visitor economy welcomes approximately 62m visitors and is worth £3.4bn according to data modelling system STEAM. Key activities are shopping (generating 25 per cent of economic spend) and food and drink (20 per cent).

“There is a huge opportunity to encourage visitors to stay in town centres longer and do something different with their evening. But it’s not just about people on day visits or short breaks, it is also about local communities and the quality of life for residents, students, and businesses,” said Ruth.

“We need to broaden the appeal of town centres and inspire people, whether it’s through a range of high

Andrew Buchanan

4 in:brief SPRING 2014

quality dining experiences, sport, cultural events and experiences or late night shopping. The infrastructure and wraparound offer is important – for example, the creation of theatre and dining packages, accessibility and transport.

A partnership approach is vital to leveraging assets and successfully managing the night time economy to generate both social benefits and economic outputs.”

The pub trade is a sector that has undergone tumultuous changes, with a vastly different trading landscape compared to 15 years ago. “From the licensed trade perspective, the biggest single threat is the huge burdens placed on operators by red tape,” explained

“There are fewer venues due to the number of permanent pub closures in recent years, but there’s a greater amount of disposable income now as we come out of recession, and combined with innovation in the sector, this means pub operators are offering new experiences,” said Malcolm.

“Success is driven by recognising customer trends, for example cask ale and the emergence of the gastro-pub, as well as meeting customer expectations. Overall, I believe standards have gone up because customers expect more for their money.”

Although pub closures will continue, Malcolm is convinced the tide is turning and that, in the long run, the

“Lancashire has the capacity to generate a growing night time economy. “ Malcolm Ireland, partner and Head of Leisure & Licensing at Napthens.

pubs that survive and prosper will continue to raise standards.

“Areas that have developed a reputation for stringent licensing or planning conditions or over-zealous authorities are avoided by the operators in the know. Without the best operators, a town cannot have the best offering,” he said.

He added: “There is an element of the survival of the fittest and while there are exceptions to every rule, generally, the better sites are the ones that have had to adapt to come through the recession. Even so, we are a long, long way from the prerecession market, which may never return.”

Nonetheless, there are encouraging signs and entrepreneurial operators are demonstrating highly successful business models.

Malcolm Ireland

Seismic changes to the pub and restaurant sector is a theme taken up by Andrew Buchanan, director of

Ruth Connor

pub operations at Blackburn brewer Daniel Thwaites.

“Constant investment in staff training, the fabric of the building and the range on offer is crucial.

Stretching out the trading day to include a coffee offer and making sure you have free WiFi are also increasingly important,” commented Andrew.

He believes pubs and restaurants are essential to the region’s broader tourism industry, as part of the attraction to towns or cities with a vibrant night scene, or to rural locations where a pint and something to eat is expected by visitors.

“Pubs will continue to evolve and food will become a much greater part of the overall offering. Pubs and bars that cannot evolve to match customers’ demands will continue to struggle,” said Andrew.

“It’s not the end for the drinks-only pub, but there will be far fewer of them around.

Those that survive will be the ones that really do engage with their customers, increasing use of social media in planning a night out for example, and are at the very top of their game in terms of providing hospitality and an experience, not just drinks or food.”

Commentators agree that the effective dovetailing of night economy leisure offers is essential if the wider sector is to prosper.

Among them is Ruth Eastwood, CEO of the Grand Theatre in Blackpool. “Theatres and restaurants are mutually beneficial – a restaurant

Ruth Eastwood

can offer theatre audiences pre and post-show dinners and still have a full service for those wanting a meal as their main evening activity.

Jonny Birkett

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special report: night time economy

Night time economies represent a booming industry, and an opportunity for many towns and cities.

Image courtesy of the Forum bar, Preston.

“At the Grand Theatre we don’t have the space to run our own restaurant but we do work with restaurants in the area, offering customers discounts on meals when they attend the theatre. People are more demanding in terms of their leisure time and to satisfy those demands operators across the field are recognising that collaboration is the way forward,” said Ruth.

“The visitor market is obviously key to the success of Blackpool, and theatre is an important part of that tourism offer, but at the Grand Theatre we recognise that our most important market is the local audience because they are there 52 weeks of the year.”

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The Grand is experimenting with different performance times this summer by targeting the office party market with BLAM! – a show described as Die Hard meets The Office. “There are shows at different times on different days so people can eat before or after the show or maybe carry on partying after the theatre,” said Ruth.

So how will the industry develop over the next 10 years and what are its biggest challenges?

“Diversity is the big word of the moment,” said Jonny Birkett, evening and night time economy (ENTE) programme manager at the Association of Town and City

Management (ATCM). “There is a huge shift in town and city centres to encourage a more varied type of visitor – both demographically and culturally. The marketplace will become much busier as different types of operators enter the fray, challenging the existing offer and vying for the same leisure pound.

“This will happen while the industry is trying to adapt to meet the insatiable consumer demand for more and more varied and unique experiences.”

Commentators also believe the retail sector must adapt to meet consumer needs, which could include a root-and-branch review and extending trading hours.

“How the industry embraces and exploits new technology and integrates with the ‘digital high street’ will be key to its success,” added Jonny.

“The way the industry engages with a new and growing type of consumer that doesn’t base the leisure experience purely around alcohol will present interesting opportunities or serious threats, depending on your outlook.”

“With its diverse visitor offer, Lancashire is well placed to grow the night time economy. Our town centres are steeped in history and can offer inspiring experiences from arts and cultural events to a feast of food and drink in our acclaimed restaurants or cosy pubs,” she said.

“Lancashire has the capacity to generate a growing night time economy. It is very much about partnerships and delivering a shared vision.”

Ruth Connor at Marketing Lancashire remains upbeat about the county’s night time economy to cope with any challenges that come its way.

SPRING 2014 in:brief 5

ask the expert / legal update / Crow Wood: ask the expert:

Wealth Management David Hardman leads the wealth management service at Napthens.

He is also a director of Ludlow Wealth Management Group.

Q: With the recent announcement in the budget, do you think annuities have any future?

A: There is no doubt in my mind, but I fully expect the market to shrink.

For a few individuals, annuities will still be the most suitable option when planning for their retirement. For all of us though, whether an annuity is right or not, it opens the door to many other possibilities that need careful consideration. This new change, although potentially daunting for some, provides a great deal of choice.

It’s about understanding and finding out what’s right for you. We can now move away from the idea that we all have to opt for annuities. Let’s not forget that annuities weren’t ever the only option. Individuals always had the choice to pursue other solutions for their retirement. The budget has exposed this and created choice.

When the Chancellor’s plans were first announced, everybody immediately asked the question about annuities.

However, we need to be thinking beyond that. Yes, with the inevitable decline in annuities there will be an increase in other products. Yet by speculating about new products we’re only considering the options for accessing our funds, and not on how we accumulate them.

I expect that this is where we will see the changes that really affect individuals. At present, pensions provide one of the most tax effective vehicles for individuals to save, especially if they are higher rate tax payers. The tax breaks that these individuals currently receive on their pension contributions could well change – a real shake-up.

The need for sound and tailored financial advice has never been more relevant. Not only for accessing your pension fund, but for the development and growth of your pension pot before you begin to enjoy accessing it.

Legal Update: Taking control of enforcement Suzanne Dean, Head of Debt Recovery, looks at important changes to the way bailiffs can operate after the Taking Control of Goods regulations came into force.

The main changes will mean that bailiffs will now be known as enforcement agents, and these agents will be required to follow a staged process. There is also a new fee structure in place. These changes are intended to simplify the enforcement procedure.

Under the regulations: 1. Officers will be required to give the debtors seven clear days’ notice of enforcement, in writing, to pay the debt – excluding Sundays, Bank Holidays, Good Friday and Christmas Day. 2. The notice of enforcement must contain details of the debt, such as the amount outstanding including interest, enforcement fees, plus any additional costs of enforcement if it remains unpaid.

Contact: David@napthenswealthmanagement.co.uk

Stage one: the first enforcement officer attends and processes payment collected or manages any arrangement made to pay by instalment, then manages the process for a control of goods agreement – formerly known as the walking possession agreement.

Stage two: the removal and transportation of goods to a place of sale will take place, with management of auction activities and management of funds and payments to the creditor.

4. If the enforcement is unsuccessful, the previous fee of £60 plus VAT is replaced by a new compliance fee of £75 plus

VAT. This fee is triggered when the enforcement officer sends out the notice of enforcement to the debtor.

5. Enforcement officers will be authorised to take control of the debtor’s goods seven days a week between 6am and 9pm. If the goods are located on business premises which trade outside these hours, the officers will be able to enforce during trading hours.

It’s important to note that under the new regulations, the notice of enforcement must be sent to the address where enforcement is to take place. If the debtor has moved, a new notice must be sent with another seven days’ notice. This notice will incur another compliance fee of £75 plus VAT.

Suzanne Dean

Contact: Suzanne.Dean@napthens.co.uk 01772 904368

Crowing about Crow Wood For this former dairy farm turned private members’ fitness and leisure club, a celebrated restaurant and equestrian centre are just the beginning of the story.

To date £20m has been invested in the 100 acre site at Crow Wood in the hills above Burnley. Crow Wood boasts impressive facilities including a gym, 25m pool, sauna and steam room, members’ lounge and bar, gym, dance studios, squash and tennis courts.

Founded by Andrew Brown after he retired aged 40 when he sold his former business, FH Brown plc, Crow Wood has quickly gained a regional reputation and now boasts as many as 1,000 visitors a day.

Since it was founded in 1999, Crow Wood has expanded several times.

In 2012 new equestrian facilities were built, including an indoor riding arena and a purpose-built 5-a-side soccer centre was established to serve customer demand.

David Hardman

3. The officers will then follow two stages of enforcement.

In February 2013 The Woodland Spa was constructed at a cost of £4.5m. The thermal suite features one of Europe’s largest hydrotherapy pools, a unique Serenity Pool and a heated outdoor pool with outdoor hot tubs, bar and terrace. May 2014 saw the opening of three double

Crow Wood

en-suite bedrooms, complementing the additional spa apartment, providing exclusive luxury on-site accommodation. This development also saw the opening of Bertram’s Restaurant, a destination restaurant catering for over 120 covers with award-winning chef Spencer Burge at the helm.

to invest £500,000 over the course of the year with plans for further football pitches and club refurbishments.

The business now employs 150 people, with turnover in 2014 expected to hit £5m. Serving both the local community through the popular gym, and customers from further afield, Andrew expects

“This demonstrates our primary concern – ensuring that all the facilities and services we offer are of the highest quality. That’s our unique selling point for customers.

Andrew said: “We were delighted when, less than 12 months after it opened, The Woodland Spa had been named Day Spa of the Year.

“We believe we are the primary leisure facility not only in Lancashire but for some distance, and we hope to establish our restaurant in the same way.

“Our long-term plans include the construction of a hotel and banqueting suite on site, to complement the existing facilities. It’s an exciting time and I can’t wait to see what the future holds.” www.crowwood.com www.thewoodlandspa.com

07768 632157

6 in:brief SPRING 2014

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Face2Face: / a guide to:

FACE2FACE: What future for woodland industry?

A guide to...

In our latest Face2Face, Alex Sykes of the Rural department meets John Clegg of John Clegg & Co chartered surveyors and forestry agents to discuss investing in forest and woodland.

The breakdown of any relationship is difficult for those involved, and divorce can be a painful, expensive experience.

Collaborative Law

Collaborative law is a growing area of specialist advice which advocates a non-confrontational approach to divorce and family matters.

Designed to be less acrimonious, less expensive and quicker than court proceedings, many couples find it a useful way to approach separation.

• Those involved work together with their solicitors to reach an agreement, rather than having a decision imposed upon them.

• To start the procedure, each party appoints their own specialist, collaborative lawyer to support them through a process of face to face discussions. An agreement is signed at the start, committing them to try to resolve issues without the need to go to court.

• The first collaborative meeting will focus on agreeing objectives, and highlight any information required for future meetings.

John Clegg and Alex Sykes

Alex Sykes (AS): As somebody who was once a professional forest manager I’m fascinated to see the level of interest in forest and woodland ownership and the growth in the market for relatively modest woodlands bought primarily for amenity. What is motivating people to buy and own woodlands?

John Clegg (JC): Forestry is a sound long term investment.

If managed commercially it attracts a favourable tax treatment, although that is often not the main driver – they are a pleasure to own and visit. The UK forestry market has been the best performing sector of the property market over the past five years.

We have sold 600 woods totalling in excess of £250m during this period and we’ve seen woodland capital values increase generally by 20-25 per cent over the last two years.

AS: We might see change as the economy picks up and investment opportunities elsewhere begin to look attractive. However, there is still a lot to be had from land value and we are seeing a steady flow of work from people buying amenity woodlands.

JC: The commercial sector will remain strong. Timber prices have increased steadily and markets in the North West are strong. Over 50 per cent of English timber processing takes place in the region and prices from our timber auctions suggest prime parcels may have moved upwards by 20 per cent over the past 18 months. Poorer crops which may have had little or no value three to five years ago now have value due to swiftly developing firewood and biomass markets.

The UK imports 60-70 per cent of its construction grade timber and UK prices are strongly influenced by world price.

“The UK forestry market has been the best performing sector of the property market over the past five years” Other markets, notably China, have kept the world market buoyant.

Domestically the emphasis on renewable energy and the increasing cost of oil and gas has created a booming demand for fuel wood. All the indicators would suggest that timber prices will continue to remain strong.

AS: When investing, the important thing in woodland management is for owners to ensure their woodlands qualify as ‘commercial woodland.’ Where woods qualify as commercial, benefits include: 100 per cent Business Property Relief under Inheritance Tax after two years ownership; Capital Gains Tax is not payable on the gain in value of standing timber; and there is no Income Tax or Corporation Tax on profits from the sale of the timber.

Recent discussion with HMRC has even established timber can be treated as a chattel and is not therefore liable for SDLT. JC: To assist in qualifying as ‘commercial’ owners should look at items such as professional management, separate bank account, VAT registration, accounts etc. Many farmers and estate owners have woods which are

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undermanaged. In the current strong sales market these woodlands could produce a considerable value per acre if sold – and if they are to be kept they should be actively managed to make the most of the current timber markets.

AS: Forestry grant aid is changing substantially at the moment.

From 2016, £3.1bn of funding will be available in England for environmental schemes targeted so that landowners can help deliver environmental priorities specifically related to their local area, focusing particularly on increasing biodiversity, helping wildlife and improving water quality. The devil will be in the detail but woodland owners should be well placed to access this funding.

JC: In my view and regardless of the grant schemes, whatever you grow, grow for quality as there will always be a market for a quality produce.

With the strong woodland and timber markets always offer woods or timber parcels on the open market to ensure best value is achieved and go out and enjoy your woods – there are not many investments where you can walk the dog and have a really good picnic.

• The agenda for further meetings will depend on personal circumstances. There may be children to consider or complex financial issues, for example.

• At the final meeting, documents will be signed detailing the agreements reached and the finer points discussed so that everyone is clear on their commitments.

• Unlike the court process, the timescale is driven solely by the individuals involved and their issues. This could mean only one or two meetings are necessary, but more will take place if needed until agreement is reached.

Collaborative lawyers are trained by legal group Resolution, an organisation which campaigns for improvements to the family justice system and for a constructive approach to family law.

This area of law is proving very successful in dealing with what are often potentially emotional and difficult situations for those involved.

Helen Lucking

Contact: Helen.Lucking@napthens.co.uk 01253 832353

SPRING 2014 in:brief 7

and finally:

Charity champions Staff from Napthens’ Blackburn office are to set off on their latest charity challenge – after so far helping to raise more than £3,000 for a local good cause.

James Allison and Richard Robinson, Corporate partners in the East Lancashire office, are cycling from London to Paris in July to raise funds for Blackburn Youth Zone.

The charity, a state-of-the-art youth club facility in the town, supports young people aged between eight and 18 years old.

Mike Fetherstone

Me and my...running According to Sport England, over 2 million adults in the UK do it every week and Mike Fetherstone, partner in the Commercial Property Department is one of them.

It is one of the five most popular sporting pastimes in Britain and it certainly looks like it will remain one of the nation’s favourites for a long time. Aside from the obvious health benefits, running can also help to improve thinking skills and boost memory, according to an American research project carried out by the University of Minnesota.

“For me running gives me the chance to maintain my fitness, clears my mind and of course it is enjoyable,” said Mike, who earlier this year took part in the Polar Night Half Marathon in Tromso, Norway.

“I chose to run the Polar Half Marathon because my dad passed away almost exactly a year earlier to the day and rather than moping about on his anniversary,

I decided to do something special to remember him by with my love of running.”

The Polar Half Marathon, which is the largest winter race in Norway, started in 2004 and has become popular with runners from all over the world. It takes place in January when, at that time of winter, there’s no sun and the only natural light is from the moon and the occasional northern lights. Combine this with running 13 miles in icy snow and biting cold temperatures it’s certainly a tough event.

Mike started running 13 years ago and has competed in four marathons which include London and Edinburgh and will be entering the Loch Ness marathon in September.

He’s also run more than 10

Napthens has committed to supporting the good cause for three years, and to date has helped in a range of events from recordbreaking continuous games of football to fire walking, soup making and cake competitions.

Peter Little, chief executive of Blackburn Youth Zone, said: “Napthens has really got behind

our charity, their commitment and goodwill towards us has been remarkable. So many members of staff, at all levels of the company, have been involved in supporting us in some way which is fantastic.”

Meanwhile, staff across Napthens’ offices have also been busy raising funds for charity St Catherine’s Hospice.

Last year more than £5,000 was raised for the good cause from a variety of internal fundraising events including dress-down days and bake sales, and external events with staff taking part in The Tough Mudder, The Great Manchester 10k run, and the recent St Catherine’s Big Bike Ride. Napthens also sponsored the hospice’s Winter Festival and Santa Dash Run. Napthens is delighted to continue to support St Catherines through 2014/15 as its chosen charity for the year.

half-marathons, the last of which was the Great North Run. “I ran it last year to raise money for Marie Curie Cancer Care as they were so good to my dad when he was ill and with us at home for that matter,” added Mike.

As for his training, Mike currently runs in excess of 30 miles a week and his next race is the Southport half marathon in July. As for his secret to training he puts this down to three things. “I would say go your own pace, watch your footing and when your confidence is up, look for a running partner who’ll help you push yourself.”

Mike.Fetherstone@napthens.co.uk

01772 904255 Leah Simpkin, Peter Little, James Allison (front) and Kate Mercer

Welcoming new staff Napthens has expanded a number of teams recently, with new appointments to departments including Wills & Estate Planning and Commercial Property.

of issues from inheritance tax and asset preservation to making and reviewing Wills.

plot sales executive, while solicitor Nicola, based in the Blackburn office, advises on a broad range of matters including commercial leases.

on property and business matters including partnership agreements, tenancy matters and renewable energy schemes.

Solicitors Elizabeth Byrne, Sharif Ela and Rachael Waring have joined the Wills & Estate Planning team, advising clients on a range

Meanwhile, solicitor Stephen Bell joins the Commercial Property team based in Preston after nine years with a Bolton firm. His arrival follows Lynn Duboulay and Nicola Ciraolo who joined earlier this year - Lynn as

Finally, Head of Rural, Andrew Holden, has been promoted to the position of partner. Andrew, who joined Napthens in 2006, acts solely for farmers and landowners, advising

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DX 714572 Preston 14

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Sharif Ela

www.napthens.co.uk Napthens LLP, registered office: 7 Winckley Square, Preston, Lancashire PR1 3JD. Napthens® is a registered trade mark of Napthens LLP. Napthens LLP is a limited liability partnership registered in England and Wales: OC325775. The term “Partner” indicates a member of Napthens LLP who is not in partnership for the purpose of the Partnership Act 1890. A list of members is available from our registered office.

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