We Brits are used to hiding our light under a bushel. We don’t like fuss and fanfare. We don’t boast about how clever we are. We don’t trumpet our achievements.
But the time has come for a change. It is time to champion our strengths and recognise that the UK leads the way in many industries, from film-making to artificial intelligence, and from medical research to offshore wind.
Companies are delivering world-beating progress in all these sectors and more – but they are battling for recognition.
While US stock markets flirt with record highs, legions of firms on the London market are dirt cheap. Fighting to secure funding from investors, they are struggling to grow, feeling unloved and even wondering why they joined the market in the first place.
It’s not as if they’re bad at what they do. But laws, trends and our very culture have conspired to do UK business down. Proof comes in the number of firms taken over by overseas suitors, many of them American.
The elite: From creative industries; renewable power; defence systems; and vaccines, UK firms are leading the way
Now, at last, the tide may be turning. Jeremy Hunt, himself a former businessman, on Wednesday delivered a Budget full of initiatives to back UK firms, especially those with the potential to generate long-term economic growth and reward investors along the way.
He singled out creative industries, green energy, life sciences and healthcare, advanced manufacturing, and technology, including artificial intelligence. All these sectors will receive support to build a country fit for the future, with firms to rival Silicon Valley.
This column has long believed in buying British, not just out of patriotism, but because there are so many dynamic, hard-working and high-achieving companies listed on the London market. They need recognition. More than that, they need money, from Government, yes, but also from individuals and big institutions, who are willing to invest in UK shares because they know that most will deliver long-term rewards.
That’s entertainment
The Chancellor may not have time to jog to his local Odeon for the latest blockbuster, or bingewatch series like Sex Education with Gillian Anderson, pictured right. But he recognises the importance of UK creative industries, which contribute £125 billion to the economy, employ millions and attract film-makers behind box-office hits from Barbie to Star Wars.
The Budget included more than £1 billion of tax relief and other measures to encourage Hollywood producers and home-grown artists to use UK studios, visual effect experts and other specialists. They need all the help they can get, after the long drawn-out US writers’ strike last year, which is still affecting schedules.
But business is set to pick up at pace, and Hunt’s Budget boost is a fillip. With brighter prospects ahead and an industry seen as one of the world’s best, now could be the time to invest in this sector.
Facilities by ADF specialises in trucks and trailers for the actors, designers and technicians who form part of any TV or film production crew. Filming can go on for weeks, even months, and Facilities helps to keep crews happy, with a top fleet, hired out by customers from Disney to the BBC.
Founder Marsden Proctor, a former driver, said last month that trading in 2023 had been hit hard by the strikes. Now demand is bouncing back, but the shares are still depressed at 50p, down 17 per cent over the past 12 months. With business picking up, that looks too cheap and the price should rebound this year and beyond.
The technical firms that provide key services to film and TV producers have been dragged down by US walkouts too. These include Sheffield-based Zoo Digital, which uses technology to translate films into other languages, and audio-visual specialist Videndum, whose roots go back to 1909, when William Vinten made one of the first colour motion picture systems.
Zoo was riding high until the strikes, when its shares slumped from more than £2 to just 25p. Videndum’s shares have fallen from £15.30 to £3.29. Both should benefit from a brighter future and their shares should recover.
The life scientific
The UK is recognised the world over for its prowess in life sciences from discovering new drugs and developing vaccines to producing advanced medical kit. Last week, the Chancellor highlighted his commitment to this sector, with funds and strategic support.
Hunt is not alone in backing British biomedical brains. As he delivered his Budget, AstraZeneca announced a £650 million investment in the UK to bolster scientific skills and help develop new vaccines. This shot in the arm should filter down to a host of smaller life sciences firms.
HVivo, for instance, has developed trail-blazing trials for vaccines, helping to bring them to market faster and so saving lives.
Its shares have soared from 10p to 27p since Midas recommended them in January last year, but the stock should continue to deliver. Boss Mo Khan works with some of the world’s biggest drug firms and HVivo has also helped develop vaccines for respiratory syncytial virus (RSV), the bug that swept the US and UK last winter and can be fatal for infants and the elderly.
Other firms changing the face of medical science include Intelligent Ultrasound, whose software makes it easier to analyse scans as they happen, whether for pregnant women or patients with heart issues. The firm punches above its weight and the shares, at 8.75p, should deliver long-term rewards.
Likewise Destiny Pharma, pursuing cures for nasty conditions, such as diabetic foot ulcers and post-operative gut infections. Drug development is tough, but Destiny is well managed and, at 32p, the shares deserve support.
White hot technology
Google has been ridiculed for its new AI tool, Gemini. Developed by ultra-woke geeks in California, the chatbot’s clangers include saying it would ‘never’ be acceptable to ‘misgender’ trans-woman Caitlin Jenner, even to avert nuclear apocalypse.
Now, London-based techies have been called upon to make Gemini work better, underlining the Chancellor’s point that the UK is a tech hotspot, whose firms and services are valued at £800 billion.
Apple, Microsoft and Facebook benefit from British know-how – and smaller firms are making waves too. Cambridge-based 1Spatial exemplifies the breed, creating digital maps, used by firms, states and governments worldwide. Boss Claire Milverton is winning new customers by helping them to understand where assets such as property, pipes and plant life are located.
The firm has gone from strength to strength, with the shares soaring 75 per cent to 62p since Midas tipped them in March 2021. But there should be more to come.
Team Internet, formerly CentralNic, is another winner, recently announcing record sales and profits from helping firms to bolster their online presence and protect themselves from cyber criminals. Shares have almost tripled over the past five years to £1.36, but City analysts reckon they are still far cheaper than they would be on America’s Nasdaq exchange.
Given a green light
Last month was the hottest February yet – more evidence climate change needs to be tackled.
As Hunt reminded us, we are in the vanguard here too, as the first major economy to halve green gas emissions between 1990 and 2022. That is no accident. UK businesses are key players in offshore wind, energy storage and conservation.
Greencoat UK Wind was the first renewable power business to list on the London stock market. That was in 2013 when the group had six wind farms and the shares were £1. Today, its wind farms produce enough energy for 2.3 million homes and the firm recently unveiled a 10p dividend for 2023, up almost 30 per cent on the year before.
Yet Greencoat have slipped from highs of more than £1.60 to £1.39, amid falling energy prices and questions over Government commitment to wind. Those fears should have been assuaged after the Budget, and Greencoat looks good value, particularly given its track record of generous dividends.
Many other operators in this field deserve support too, including SDCL Energy Efficient Trust, which allows customers from London’s St Bartholomew’s hospital to Scandinavian home owners to reduce energy consumption. Shares have fallen to 65p, at which point they are a bargain – with a dividend yield approaching 10 per cent.
Hunt mentioned hydrogen power too, a technology that is set to be revolutionary but is taking longer than expected to reach its potential. Investors keen to back this new energy force could look at Ceres Power, Atome and Hydrogen One.
Flying high
The UK’s industrial heritage lives on in firms that are behind advanced machines and systems adopted worldwide. Defence groups BAE Systems and Cohort, car-testing group AB Dynamics and Stoke-on-Trent steel specialist Goodwins are testament to the UK’s industrial skill.
It’s time to follow the Chancellor’s lead – seek out the jewels in our market and give them the support they richly deserve.
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