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Have we got Christmas views for you?


Christmas starts for the bah-humbug amongst us in October by complaining that shops are full of “Yuletide fare,” but, before you know, it is a week away and maybe a bit of preparation might have been rather useful!

I, like many of us, have had a long stint since the summer and am looking forward to rest and relaxation with my family and catching up with friends, I am pleased to say not before, I nip off with youngest son for a week on the slopes. So, this is my final email sent from office in 2023.

During 2023 we have been looking increasingly at Sustainability as a sector, and last month set about doing a sector review. Getting preprepared Sustainability market/valuation data is difficult as it is far from clear which companies to include.  We have, therefore, pulled together listed metrics and reviewed private company transaction data from a wide range of the more traditional market sectors where we think there is a proper sustainability angle. I hope you find our market overview interesting.



You may remember that, a few months ago, we asked business owners, managers, and investors for their real views on sustainability, and whether they see it becoming integral to their businesses and, ultimately, affecting company valuations.   We had a great response, with all sectors well represented and nearly 25% of these being private equity firms – so you can see what the investors think, too.  Thank you again to all that took part.  The feedback was really interesting, it is clear that not everyone is thinking the same way.



At the conclusion of COP28 on Wednesday, countries from around the world agreed for the first time on the need to “transition away from fossil fuels in energy systems”. As we have seen during the last six months, rhetoric is one thing, but even laws on hitting net zero – or the transition from oil powered cars by, say, 2030  – can be changed by politicians with their eyes on an impending election/acceptance of the reality (you chose the narrative here).  At the end of the day, if we are to leave a planet fit for future generations, we will need to make bold decisions individually, corporately and globally.

The message of Christmas is of hope even in dark days, and there is no doubt we live in dark days. So, let us at Polestar wish you a joyful and relaxing holiday, so we call return in 2024 with hope and energy.

Up and at’em! – March Newsletter

Finally, spring has arrived, both meteorologically and metaphorically.  I think we are beginning to see the end of the economic “winter” with the passing of the dark days we have endured over the last few years, and the accompanying global and domestic political turmoil; even if we did have to endure a brief late hard frost with the downfall of Silicon Valley Bank and Credit Suisse.

My conversations with business owners and private equity firms indicate optimism is improving.  This view is supported by the PMI index rising above 50, with even manufacturing expected to become positive in the next month as supply chains improve more rapidly than at any time since April 2009. Having a relatively stable government (and opposition), and apparently leaving behind the mutual antagonism with the EU and the US over the Northern Ireland Protocol, appears to have drawn a line in the sand. So, are we finally in for a period of stability?

Hope springs eternal!  With Jeremy Corbyn and his acolytes cast into the wilderness, the extremes of both parties seem to have been tamed and, consequently, fiscal prudence should reign, whoever wins the next election.  It would be great to see business leaders investing capital and employees investing their brain space and energy into building UK plc and improving productivity.

 

For all the mayhem around the autumn mini budget, lower taxes must ultimately be the aim if we are to reward our businesses and their employees for their efforts.  It is bonkers that people pay 62% tax on earnings between £100k and £125k, and 25% Corporation tax hardly encourages investment. As Winston Churchill said “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Another barrier growth is leadership, so let’s raise our heads above the parapets, get out there, and invest our energies, time and risk in trying to build our businesses and upskill our teams for the changes that are coming.  Whether we are seeking to develop our family business, or building towards an exit, this is the time like to understand our business’ current leadership model and consider how that may need flexing to meet our objectives.  Have a read of my thoughts on leadership, I would love to hear your views.