Private firms are taking on ‘can do’ attitude

Stephanie Hyde, partner and head of regions for PwC, said more private firms are considering exporting and entering parallel markets as they adjust to the prolonged downturn.

“A lot of private companies are very much focused on things in their control and are interested in moving their business forward,” she said.

“Eighteen months ago there was a little bit more of a ‘we will just wait and see’.

“We’ve moved from a ‘wait and see’ attitude to ‘let’s do what we can’.”

Mrs Hyde, who sits on PwC’s UK executive board, covers the firm’s 25 UK offices, including its offices in Hull, Leeds and Sheffield.

She said the accountant is working more with private businesses and has “grown our market share” among these. Private firms now contribute about as much to PwC’s revenues as public firms do, she added.

“I feel pretty optimistic about it because of the energy out there,” said Mrs Hyde.

“People are aware of the difficulties out there. But people are becoming more innovative. They’re thinking about how they can expand, looking at different markets, exporting.

“We see people looking at acquisitions and how they realign their business to the market.”

Mrs Hyde said while “people are definitely hunkering down a bit”... “they cannot just sit still and do nothing”.

However, she said innovation among private firms is unlikely to translate into a flurry of initial public offerings (IPOs), with private companies still reluctant to make the move on to the stock market.

The number of UK companies on the Alternative Investment Market (AIM) has been sliding since 2007, with just 880 UK companies on the junior stock market in September, versus 1,347 at its heyday in 2007.

“It’s too early,” she said. “The market is too uncertain. But we saw a lot of companies who before all this started were up for it.

“Hopefully, we’ve got some innovative companies, who, when the markets are a bit more buoyant, do IPO.”

Mrs Hyde, who started out with PwC in 1995 and became a partner in 2006, hailed the ability of the UK’s regions to “pull together”. “Every business community is thinking about what they can do to respond to the challenges.”

Earlier this year the group split its practice in the North of England into the North East and North West, to give it “enhanced regional market focus”. It also promoted business recovery partner Ian Green to lead the North East operation. It has about 600 staff in Leeds, 100 in Sheffield and about 75 in Hull.

The Big Four accountants – PwC, Ernst & Young, Deloitte and KPMG – are currently being probed by the Competition Commission over their market dominance. But Mrs Hyde insisted “the markets we are in are very competitive – we’re competing with a lot of local firms”.

“Every company is looking at what they are spending their money on,” she said.

Drop in number of insolvencies

Insolvencies in Yorkshire and North Lincolnshire dropped substantially year-on-year, new figures from PwC show.

The firm said 364 insolven-cies in the third quarter represented a 17.5 per cent fall on the 441 insolvencies in the same period of 2011. That was also a 21.4 per cent fall on the 463 insolvencies in the second quarter of 2012.

Across the UK, there was a similar 18 per cent year-on-year fall in insolvencies to 3,296 in the third quarter, it said. The worst-affected sectors were construction, manufacturing, retail and hospitality and leisure.