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  • Getting Value for Money on Storage Space with Accountancy SaaS 

     

    An accountancy firm without clients is like an empty suitcase – just dead weight. 

    First you need to cost in the transportation cost – how much your logistics provider will charge to migrate data and integrate it across relevant platforms.  

    Then there is a value-add charge encapsulating your weighted load. If you’re carrying excess baggage, redundant or missing data – what will be the cost and how can it be redistributed? 

    The workload at an accountancy practice can be divided among relevant stakeholders, with clients connected via an online system with priority tasks, and those clients who pay for more of your itemised services, assigned in a workflow allocation process which takes full account of upcoming deadlines based on the business’s reporting date.  

    Managing Accruals and Prepayments 

    Accruals must be fully addressed in a timely manner, that they are registered within the accounting period they relate to, and so that deferred income is carried over once payments have been processed in the cash book and bank account. 

    Another core component of bookkeeping practice is prepayments – classed as an asset when the business has prepaid the expense; and a liability where the prepaid income has been received but cannot be recorded in the ledger as such until such payment is timetabled based on its relevance to the current reporting period; that the payment can be reversed from an outstanding liability, and logged in the normal way at the commencement of the next reporting period. 

    Returning to our suitcase analogy, items are weighted based on the cost, in the context of turn on an asset. Are you getting value for money from your service providers on items assessed in terms of the cost of processing them? If you switch provider, can you guarantee a more cost-effective result? 

    Weighted Packet Margins May Surprise 

    Prior expectations of profitability are another example of excess baggage. While profitability ratios can be used to inform stakeholders of the efficiency with which a client business deploys its capital and accumulated credit owed to major debt holders, and the net vs gross profit ratios can indicate how a business is able to manage the costing on its current liabilities, – or expenses – financial reporting always logs the result at a time lag relative to the Statement of Financial Position (SFP) and the Profit and Loss Account (PLA). 

    And for this reason it is vital to keep updated accounts which are regularly refreshed, to ensure a snapshot of the business’s profitability, assets balance sheet and expenses management (itemised as fractions of net sales revenue), can be taken which reflects the payables and receivables control accounts in that forward orders, and credit purchases, are factored into the sales conversion pipeline. 

    Human Capital 

    Employees are a vital part of the business’s intangible capital assets. Skilled workers can mean the difference between returning and non-returning customers. So whatever the percentage increase in sales revenue attributable to marketing campaigns at cost, maintaining your brand identity and integrity requires re-investment, in relevant skills training and offering a sufficient reward – whether in the form of a commission, a bonus, or simply a competitive salary. 

    Matching pensions contributions, whether from salary sacrifice schemes or fixed-percentage contributions rate, is an important component of being able to invest in employee retention and ensure employee loyalty to the organisation, where they may  be transposed “sideways” to other internal roles, predicated on expertise and continuing relevance of their accumulated skills set, to the retainer organisation. 

    How to Meet Your Payroll Obligations 

    I am comfortable processing payroll and handling HMRC liabilities based on income bands and National Insurance categorisation. The new secondary threshold, over which a 15% NI contribution is mandated (up from 13.8%), of £5000 rather than £9,100, is especially onerous for managing the workforce in hospitality and can eat into marginal profits. Thereafter the Secondary Threshold will be increased in line with the Consumer Prices Index (CPI). 

    It is important to factor in that the Employment Allowance has been increased from £5000 to £10,500 to help eligible businesses offset costs. And additionally that the previous restriction that prevented businesses with a Secondary Class 1 NICs liability of over £100,000 p.a. from claiming the allowance has been removed. 

    I am also qualified to manage expenses with reference to VAT, particularly on charge-backs from capital expenditure on non-current assets. VAT owed from sales is straightforward to calculate, and liabilities can be matched relative to cash received back from HMRC on applicable purchases. 

  • Confluent’s Predictions for GenAI in 2026

    According to a recent survey, 68% of IT leaders recently attributed data silos as a major impediment to AI success. To adapt, companies will need to take these steps: 

    • Exposing agent-safe APIs 
    • Adopting tokenised payment protocols 
    • Making real-time product data available, to forestall transaction bottlenecks down the pipeline for an “always-synchronised commerce layer.” 

    Confluent’s 2026 forecast explained, 

    “Companies will need to figure out how to optimize sales and marketing for the machines that will increasingly do the decision making, and in some cases, ultimately the buying. If you think human customers are fickle, machine customers can be ruthless: they have zero patience for latency, no brand loyalty, and can switch vendors mid-transaction whenever a better offer appears.” 

    Despite security concerns about the open-source protocol being shared with participants, who may not have been appropriately vetted, “the gravitational pull towards a single, easy open protocol that reduces friction and developer overhead will prove irresistible in 2026.” 

    Although it concedes that “other competing standards like Agent2Agent (A2A) and Agent Communication Protocol (ACP) continue to vie for relevance in agent-to-agent communication,” adopting the Model Context Protocol (MCP) framework will ensure flexibility in uptake of contributing LLMs, ensuring that your data vendor is fit for purpose and allowing trade-in for alt vendors. 

    The report asserts that context engineering will mainstream in 2025, whereas 2024 saw the roll-out of agentic AI. Context engineering is designed to iterate on data with priority schemas at the forefront of the analytic process, while not overburdening the LLM with run codes that slow down or impede the accuracy of its performance, in a continuous evaluation process guided by context. By using pre-fitted models, you are able “to refine logic, and adjust live through prompts, rules, and context.” 

    More offloading of queries to caches or additional databases will be mandated, to enable systems to cope with the data usage levels in 2026. “Now is the time to implement change data capture (CDC) pipelines and ensure data is flowing in near real time,” as agentic queries are run on a more comprehensive scale than those overseen by human actors and day-to-day data hygiene tasks are increasingly automated. 

    Confluent also stressed the vital role of cyber security in 2026, with many technical leaders citing it as a core priority. Current forecasts for global cyber crime account for losses of about £12trillion, although the uptake of AI by threat actors could bump the figure as high as $18trillion p.a. Attack volume may actually double, making scenario modelling and penetration testing essential to containing registered threats and prioritising responses according to business impact, to isolate contaminated divisions stacked by tiers according to priority. Cyber security managers need to be able to pivot around a threat, using segregated “high volume, low-latency data infrastructure for instant analysis and automated response.” 

    In the context of data governance, for safeguarding standards to be upheld, ensuring data trust, quality and lineage, data protection officers need to be proactive about monitoring reuse of sensitive data and linked queries run against data tables where access is permitted based not only on shared values, but also on overlapping fields in segregated data tables where bulk processing requirements can override usage rules. The report stated that 84% of technical leaders recently called data management and governance a top-tier technology priority. 

    Confluent is pushing its cold data siloing solution, Iceberg, as a way of meeting requirements for data reuse. 

    “ Iceberg is poised to lead this transformation, with continued maturity in its Puffin metadata format, advancements in data compaction and sorting, and emerging row-level lineage capabilities. Compared to other open table formats, like Databricks Delta Lake (which is optimized for “hot” read performance), Iceberg’s merge-on-read and partitioning design make it particularly well suited for cold data workloads.” 

    Durable execution engines will be the smart investment choice, with event-driven responses to retries, timeouts and compensations. LangGraph and Pydantic AI have pioneered the adoption of fault-tolerant frameworks, which allow for solution via live diagnostics. This enables complex patterns, such as those run by Sage and CQRS, to transition from microservice code into work-flow-as-code. 

    “At the same time, Kafka will remain the scalable event backbone and Flink a high-throughput low latency processing and real-time analytics engine.  

    The report concluded with a call to CIOs not to overwrite or override the existing infrastrucutre, but to work with GenAI to adapt the system to changing usage needs. 

    “Executives should begin to re-analyze the cost-risk for legacy system modernization with GenAI, leveraging specialized integrators for generative code translation and understanding. Developers should focus on migrating legacy messaging systems (like JMS) to modern event-driven architectures, using AI tools to accelerate the process and transform hard-to-maintain legacy code into new, valuable capabilities.” 

  • Barratt Redrow analyst note

    Following its financial update for the 17-week period from 30 June 2025 to 26 October 2025 (the ‘period’), issued on 5 November 2025, the stock is down -4.70% over the week commencing Monday 8th December.

    With a strong forward orders book and integrated sales divisions, thanks to the Barratt-Redrow merger completed last year, the company has a clear blueprint for future expansion and is targeting an ambitious number of 22,000 home completions per year.

    All comparatives are to the 17-week period from 1 July 2024 to 27 October 2024 unless otherwise stated.

    Trading performance 

    The forward order book, including joint ventures, totalled at 10,669 as of 27 October 2025, compared to 10,706 homes over the equivalent period of 2024; net value of £3,281.4m for 2025, vs a comparable figure of £3,206.0m in 2024. This indicates that new homes sold have a higher realised value, although the company iterates its commitment to affordable housing, stressing the important role of the government in providing growth-enabling decisions and in timely consideration of planning permission on undeveloped sites.

    The company said in a statement coinciding with the earnings report said,

    “Based on unchanged guidance for FY26, at 26 October 2025 the Group was 60%3 forward sold with respect to FY26 private home completions (FY25: 62%4 forward sold), of which 64% are either completed or exchanged (FY25: 65%). “

    Its land bank is comprised of 87,000 owned plots with an additional 12,300 plots contracted or controlled. It stated its expectation that land acquisition to be in line with replacement levels, alongside a growing ratio of the current level.

    As of June 2025, a further additional c.145,000 strategic plots are available for development, “complemented by Gladman’s promotional land portfolio of c. 114,000 plots.”

    Including Joint Ventures (JVs), the group posted 228 net private reservations per week, (FY25: 225), with a net private reservation per week of 0.572 (FY24:0.59). operating from a mean of 402 sales outlets (FY 25: 443). Streamlining its operations has been a positive consequence of operational synergies between wholly owned business divisions.

    In a forward-looking statement, the group emphasised, “We remain on track to deliver £100m of cost synergies with confirmed synergies now at £80m, an increase of £11m from the £69m confirmed at 29 June 2025. An incremental £45m of cost synergies will be delivered in FY26.”

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  • Capium Accounting Software – user review 

    I have found this software to be very useful in managing workflow and stacking tasks in order of priority. It gives you a comprehensive oversight of upcoming deadlines and enables you to automate tasks with email and document templates, letting you get client sign-off on for example capital expenditure on assets, regular filings such as the trial balance process and with multiple user accounts for clients, onboarding is simplified for greater efficiency. 

    Clients are sorted into different “baskets” by the nature of the service offering. These include Trust Tax Return, Work & Testing, Partnership Tax Return, Company Tax Return, Company Accounts, and Confirmation Statement. These services are all billable with a workflow management stream allowing reminders to be set and tasks assigned to staff members, or shared with clients, for collaboration, using checkboxes for the nature of the service offering to the client. 

    You can set deadlines from a specific date, and the system will flag the task as overdue if this is not met. You can also sort by priority, from low to normal to high priority; and to set the frequency of a recurring task. In the “My admin” menu, you can access a client list to look at individual accounts and ensure a holistic approach to client relationship management.  

    Client access can be restricted if you do not make a policy of sharing all bookkeeping records, although for documents which require client sign-off or content input such as the directors’ statement, there is an esign facility as part of the package. The software integrates with the client bank account, letting you see updates in real time. It uses a Trust Layer or API to link to bank accounts and access bank feeds of all transactions, with input data reported using an automated service. 

    You can drag and drop placeholders, add tags for easy reference, and upload sales invoices. The non-current assets register helpfully automates depreciation calculations where you specify either a straight-line or a carrying balance approach. 

    In the context of VAT submissions, you have different VAT settings and you can bridge the account to link to other accounting systems such as Xero, QuickBooks and Sage where you can view VAT details prior to submitting, after checking the appropriate settings have been applied to the client. Payroll is another service offering, with a flexible pipeline allowing you to process subcontractors and freelance workers in line with regulatory requirements. 

    Finally, tailored reports let you collate and manage accruals for approval whilst preparing the trial balance, which you would file with Companies’ House after client sign-off. The mode of input can be comprised of several funnels: bookkeeping, Quickbooks, CSV, Xero, manual and free agent. 

    In the process of client onboarding, regulatory requirements on KYC and AML compliance are handled by experienced third-party provider Verify, which provides a checklist of billable services with a small service fee per item, plus VAT. So an AML check costs the practice £4, a credit check costs £2, an international ID check is £2, and the same fee for a company check. The biometric check however costs £8.50 due to the added complexity of verifying biometric ID. Support tickets are enabled and a support line to address outstanding issues which obstruct the onboarding process. 

  • Celebrating Black History Month

    Nigel Farage’s claim that a mass deportation of those low-skilled immigrants who entered the UK via the so-called ‘Boris Wave’ 2021 to 2024, from countries outside the EU, will save a total of £234bn by prohibiting access to benefits and the welfare system for those who have naturalised and apply for citizenship via the Indefinite Leave to Remain (ILR), has caused a swell in opinion polls in support of Reform which proposes stricter controls for visa applicants including stricter language and salary thresholds, and the requirement they apply for a new visa every five years.

    However, although last year net migration was still high at 431,000, this represents a decline from the 906,000 who successfully applied for ILR in 2023. Furthermore, the alleged cost saving of £234bn was taken from a thinktank report that was subsequently withdrawn as an over-estimate.

    The subject of immigration currently is politically contentious, so the time is ripe to look at historically what benefits Britain has gained from allowing skilled workers to meet an employment deficit, after population declined due to fatalities during the Second World War.

    Historian Colin Douglas held a talk at Hounslow House as part of Black History Moth, on the contribution of the Caribbean to WW2, which was vital in terms of supplying key resources and manpower for the British war effort.

    Of around 510mn residents of the British Empire, the Caribbean contributed 30,000/2.5mn armed forces, as conscription was extended here and also for India, which contributed 2mn troops. In 1940 post-battle of Dunkirk official propaganda focused on narratives of imperial unity.

    The Battle of Britain, between the RAF and German airforces, highlighted that the UK was more effective in airplane manufacturing but, lacking sufficient air crew, had to source personnel whose skills “consistently exceeding the UK average” meaning the UK extended its recruitment drive, with 5.5 thousand ground crew and 500 West Indian aircrew. At the time, pilots stood a one in two chance of dying in conflict with an 80% chance of being struck down or captured.

    In addition to providing skilled manpower, Douglas pointed to the fact that one-third of British oil supply was via the Caribbean – also a primary supplier to Germany though after the war broke out their supply failed. By 1940 the only source of bauxite was the Caribbean, and the US was its highest importer with the UK dependent on the supply chain for aluminium for munitions and aircraft, as well as shipbuilding.

    In 1942 February Nazi Germany launched the Battle of the Caribbean, which became the most dangerous shipping zone in the world – Douglas claims “All the ships lost to U-Boats in the conflict sunk in the Caribbean,” with the ocean around Tobago, a hotly contested source of oil, flagged as a key conflict zone and during the skirmishes rationing and blackouts were introduced.

    Post-war, rebuilding war damaged infrastructure and building new institutions such as the NHS required skilled workers, 1.3 mn was the shortage. In June 1948 the Empire Windrush arrived although not the first wave of immigration from the Caribbean – 1947 about 300 relocated to the UK. The Windrush had almost 1,000 onboard of whom 800 were from the Caribbean.

    During the war, 150,000 African American troops came over in the build-up to the Battle of Britain although after peaking at 200,000 the African population declined as were expatriates.

    The Race Relations Act in 1965 was a legal milestone in making racism and acts of racial persecution and violence a criminal offence.

    However in 2018 the Windrush scandal broke, with long-time British citizens who had emigrated after the war from colonial territories were denied access to healthcare and the right to work where those without proof of citizenship suffered mass deportation. All these events contributed to

    “Changing this country making a multi diverse society with Britain today having ethnic diversity as one of its key strengths.”

  • Exclusive VIP audience with trade finance professionals and academics

    Transcription, The New World Disorder 

    An audience with Dr Ngozi Okonjo-Iweala, Director-General of the WTO 

    And Alec Russell, Foreign Editor of the FT 

    A WTO report on the organisation’s activities in 2025 highlighted that despite political headwinds, 

    “Trade…can be a powerful enabler of inclusive AI -supported growth by helping economies access AI-enabling goods, such as raw materials, semiconductors and intermediate inputs. The WTO report estimates that global trade in these goods totalled USD 2.3 trillion in 2023. 

    The Trade-Related Aspects of International Property Rights (TRIPS) agreement lays down a common regulatory framework under which members can act to protect their IP, in areas including copyright, patents and trademarks. There is a separate section addressing protected business processes, industrial designs and layout designs of integrated circuits, and the semiconductor market globally relies on the WTO to intermediate disputes where a country’s collective expertise is threatened by trade practices undercutting prices or otherwise manipulating market conditions for these items. 

    In July, the Dispute Resolution Mechanism was triggered by the EU under Article 12 with a WTO dispute panel mediating in regards to “China — Enforcement of Intellectual Property Rights” (DS611). 

    The panel found the following to be true: 

    As to the consistency of the ASI policy with the TRIPS Agreement, the Panel found that the European Union had not demonstrated an inconsistency with: Article 28.1, whether or not read in conjunction with Article 1.1, first sentence (concerning certain exclusive rights of patent holders); Article 28.2 read in conjunction with Article 1.1, first sentence (concerning patent holders’ right to licence their patents); Article 41.1 (concerning intellectual property enforcement procedures); and Article 44.1, first sentence, read in conjunction with Article 1.1, first sentence (concerning injunctions). In particular, the Panel found that the obligation in Article 1.1, first sentence stating that Members must “give effect” to the provisions of the TRIPS Agreement requires Members to implement the provisions of the TRIPS Agreement within their own domestic legal systems. The Panel concluded that Article 1.1, first sentence contains no additional obligation relating to frustrating the object and purpose of the TRIPS Agreement or other WTO Members’ implementation of the TRIPS Agreement. 

    With respect to the consistency of the five individual Chinese court decisions granting ASIs with the TRIPS Agreement, the European Union had advanced identical claims and arguments as those raised with respect to the ASI policy. The Panel therefore declined to make findings on these claims concerning the five individual decisions, as any findings would be duplicative of the findings on the ASI policy. 

    With respect to the transparency obligations under the TRIPS Agreement, the Panel found that China had acted inconsistently with the publication obligation in Article 63.1 of the TRIPS Agreement by failing to publish the decision issuing an ASI in Xiaomi v. InterDigital, read together with the reconsideration decision in the same case. The Panel found that China was not prepared to supply information requested by the European Union and had thus acted inconsistently with Article 63.3, first sentence. The Panel found that the European Union’s claim with respect to the provision of specific judicial decisions under Article 63.3, second sentence was outside its terms of reference. 

    Finally, with respect to the European Union’s claims that the five ASI decisions by Chinese courts were inconsistent with Section 2(A)(2) of China’s Accession Protocol, the Panel found that the European Union had not demonstrated that Chinese courts had applied China’s laws, regulations, or other measures in a non-uniform, not impartial, or unreasonable manner. 

    This panel finding demonstrates the continuing necessity for multilateral arbitration in trade disputes, and for a level of transparency to assure trust in imports from assignatory countries. Iweala explained the context of the decision as being “a commonly agreed approach to valuation… without trust in what you’re trading, there’s no appropriate unified valuation approach.”   

    She cited, separately, the Technical Business to Trade Agreement, which establishes rules to ensure non-discriminatory product standards and regulations that don’t unnecessarily hinder trade, while also encouraging the use of international standards and transparency to create a stable trading environment.   

    With regard to US Tariffs, she said these represented the “most severe disruption in world trading in years,” but highlighted that 72% of world trade is still operating under WTO rules; and that the US represents 13% of world trade. She has said that to fully activate its supervisory role, the WTO needed to be more adaptable – “more nimble and agile” in a fast-changing world, and see the situation as an opportunity to reform.  

    At a recent UN General Assembly, China made a big announcement – that it would no longer be classed as an emerging economy, with 23 nations’ delegates present. “Being a developing country,” explains Iweala, “accords you certain privileges to renege on agreements. We have closed the doors to some of the arguments… it’s a consensus general assembly,” but she acknowledged that where you reach a stalemate, you have to be more “nimble” in activating for pro-cyclical business enablement. 

    Alec Russell noted that “We’re seeing other markets trading more  – trading more between each other” in South-East Asia with a number of recent bilateral agreements in Southeast Asia. And many members “who took the system for granted – middle powers – gathered to campaign for systemic reform, notably in Singapore, New Zealand, the UAE and Switzerland, which got together to consult on reform and new trading opportunities.” He observed that trade now is done via electronic transmissions i.e. ecommerce and AI, the subject of a recent WTO report. 

    However, in response to the suggestion a parallel system is being created, the retort was “absolutely not”, but that many members have acknowledged their over-dependence on US markets, and on China for essential supplies. He describes the adjustment as being a “temporary re-globalisation, bringing others in from the margin”. 

    Russell asked Iweala outright, “What keeps you confident about multilateralism where the US is absolutely, combatively, unilateralist?” and points to the fact the EU has accepted a blanket 15% tariff on exports to the US. The EU has negotiated preferential conditions for some agricultural exports, and in return agreed to spend $600bn on investment in the US, and also to pay $750bn on energy produced in the US. 

    She responded that “The US remains a member – despite their disruption, they have to work within the pre-existing system.” She said the IBRD doesn’t accept the realities of rising nations, but that you “need a global approach” to tackle climate change, and national conflicts. Russell said that the Bretton Woods organisations are mired in the economic reality of 1945, and Iweala acknowledged that used to be the case, except that Donald Trump has accelerated the pace of change – “the sledgehammer approach”. 

    The panel responded to questions from the audience – “What has the WTO done to facilitate these proposed reforms to the system?” She responded that decisions require the consensus of members, and that the General Counsel Chair, one of the arbitrators, had put forward a set of criticisms of “unfair trade practices at the WTO”. One of these is subsidising domestic industries, as it enables them to sell exports at less than market value, as in China which, incidentally, has criticisms of other nations’ agricultural subsidies. The ‘green subsidies’ are frequently criticised by the IRA. She acknoledged that current policy does not deal adequately with existing subsidies. 

    And she pointed out that “China’s emerging market status helps them locally, but certain advantages and privileges disadvantage other struggling nations.” Reforms on industrial policy can disadvantage emerging market economies, with Costa Rica and Brazil joining the US on opting out. In the context of income divergence, which was increasing pre-pandemic, “If you look at the graphs now, you will see this is not happening,” and developed countries have recovered at a faster pace. 

    One of the recent reforms she spearheaded was 2023 the WTO’s Fishing Subsidies Policy – “Africa loses about $7bn per year from unregulated fishing… there’s going to be a basket of different instruments to help” Africa monetise its fishing industry adequately. Fossil fuels as an export category attract $2.3bn in subsidies, she said, and that technically “revoking subsidies is one of the most politically difficult things to do.” 

  • Palo Alto Unit 42 Response Report to Cyber Security Threats

    The group stated there were indications that “threat actors are finding leak site extortion less effective in compelling payments… threat actors are piling on additional tactics to ensure they get their payments.”

    In 2024, 86% of incidents to which Unit42 responded involved losses damaging to reputation or business processes, with attackers starting with encryption and data left, to lock users out of collectively managed files, to deleting VMWare and corrupting data entries with tampering or deletion.

    A popular tactic was to target “deep partner networks”, requiring a costly containment operation that was time-consuming, once the patch had been applied, to re-authenticate the connection.

    Clients operating in industries such as healthcare, hospitality, manufacturing and critical infrastructure have had to “grapple with extended downtime, strain on partner and customer relationships and bottom-line inputs”. The medium extortion rate increased nearly 80% to $1.25mn in 2024 from $695,001 in 2023.

    However, in cases where a payment was negotiated to the hackers, Palo Alto found that the median ransom payment rose just £30,000 to $267,500 in 2024, representing more than 50% decline from the original amount.

    The median initial demand for 2024 is 2% of an organisation’s perceived annual revenue, with over half of ransom demands falling between 0.5% and 5% of the victim’s perceived revenue, although outliers existed where over half annual turnover was demanded.

    In terms of the nature of attacks, just over one-third of incidents involved cloud-based data, with dangling logins left stranded as virtual infrastructure (SaaS) was exploited via connection re-routing. Lack of Multi-factor-authentication was just 1/4 of reported attacks, vs 1.3 in 2023.

    On numerous occasions, Unit 42 reported threat actors as having used “leaked API/access keys for initial access. This often gives threat actors leverage for further compromise….

    In 45% of cases when we observed exfiltration, attackers sent the data to cloud storage… a technique that can mask the attacker’s activity within legitimate organisational traffic.”

    Inactive personal accounts can be leveraged to launch internal attacks in an organisation’s software configurations (T1484 – Domain or Tenant Policy Modification); web-scraping for privileged account logins can be successfully masked as the attacker leverages “Abuse admin-level access” – or they can cloak their plugin’s activity by high-jacking cloud resources, taking snapshots of storage parameters to identify data the organisation considers valuable.

    Palo Alto said that although attackers have capacity to disable or modify tools, system firewall and Windows Event logging, even where exploiting a botte-necked workflow pipeline for privilege escalation, it is worth noting that in 75% of incidents investigated, “critical evidence of the initial intrusion was present in the logs. Yet, due to complex, disjointed systems, that information wasn’t readily accessible or effectively operationalised.”

    The group suggests the application of a “zero-trust” policy which is able to pivot quickly around a breach to contain it, and to prioritise security of valuable data by accurately monitoring access levels and data flows, to “stop unauthorised transfers, shielding your authorisation from IP theft, compliance violations and financial repercussions.”

    An emerging threat is the proliferation of AI-assisted attacks, against which it recommends the following precautions:

    • Deploy AI-driven detection to spot malicious patterns at machine speed, correlating data from multiple sources.
    • Train staff to recognise AI-generated phishing, deepfakes and social engineering attempts.
    • Incorporate adversarial simulation exercises in tabletop exercises to prepare for rapid, large-scale attacks.
    • Develop automated workflows so your SOC can contain threats before they pivot or exfiltrate data.

  • High Rise on the FTSE100 20/09/25

    Centrica rose 6% over the week, Babcock International 6.2%. Let’s have a look at what’s driving these high equity returns.

    Centrica plans to bump investment in green activities by 50% from 2023-28, including energy security of supply and flexbility, renewable and low carbon generation, as well as customer offerings that support the transition to net zero, said the CEO in the annual report statement.

    They highlighted the net cash position vs free cash flow as supportive of growth positions in LNG storage and carbon capture technologies. The adjusted net cash position is £2858m up slightly yoy from £2744m in 2023. This reflects the contribution of expanding its operating base. The company describes itself as a “conduit” for energy security policy, with a key example being the February 2024 LNG supply deal with Repsol, also with the two natural gas purchase and sale agreements with Coterra Energy announced October 2024.

    As regards regulatory financial reporting standards under GAAPs, the company was forced to acknowledge a decline in free cash flow of £989m compared to £2207m in 2023, with also a decline in adjusted operating profit – £1.6bn vs £2.8bn in 2023. However its sustainability record indicates a long-term growth prospect. Centrica has already attained 30% green investment based on the EU’s Sustainable Taxonomy and publishes any deviations from official reporting guidance whilst remaining engaged with stakeholders’ policy feedback. It cites the installation of 1million smart meters in 2024 as part of a new Meter Asset Provider sideline, “providing the group with a steady source of income in years to come while still helping customers decarbonise.”

    Additionally the company highlighted acquisitions in “proven renewable technology generation”, namely wind and solar generators and acknowledged its loss-making Rough natural gas carbon-recapture project would need a costing review due to the exorbitant overheads in 2025 estimated at between £50m and £100m. They have already sunk £2bn into preparing the site for development but concede that “While the site plays an important part in the UK’s energy and price security, and can be a crucial part of the future hydrogen economy, making material losses is not sustainable on an open-ended basis,” and they promise investors to review their financial exposure with this in mind.

    Other more profitable expansions of its energy service offerings include a £70m investment in Highview Power’s Liquid Air Energy Storage in June, an the 20MW hydrogen peaker in Redditch.

    Its services offering has demonstrated an increasing level of customer satisfaction, the Chair highlighted in his statement that “Over the course of 2024, we’ve seen further progress in improving customer service in British Gas Services and Solutions. We’re also delivering an improved NPS, a key metric of customer satisfaction, in British Gas Energy.” NPS signifies a customer’s willingness to refer an engineer on the basis of home visit, assessed through individual questionnaires.

    He explained that in 2023 the installment of prepaid meters under warrant was paused on the grounds of affordability for customers, citing a “material risk of financial hardship,” although Centrica ried to mitigate the affordability barrier by investing in “a number of changes to our systems, processes, training oversight arrangements, and we remain committed to supporting our customers, particularly the most vulnerable.”

    In the context of debt relief, they spearheaded the “You Pay: We Pay” flagship scheme which 100% matches payments that eligible British Gas customers are finding difficult to pay into their account to decrease the outstanding balance. He points to the suggestion of a social tariff underpinned by data sharing as an alternative way of monetising delinquency or default in debt accounts.

    However, he also claims the company has voluntarily given £140m to support affordable energy initiatives since the beginning of the energy crisis, to beneficiaries including £20m in January 2024 to the British Gas Energy Trust.

    The financial year 2024/5 saw three phases of a share buyback program, starting with a £200m tranche in July 2024, then a £300m tranche in December 2024, culminating in a £500m repurchase of its own equity in February 2025, with the total value of share capital held by the company finalised at 25% of its total equity level.

    “Additionally, we returned share capital to investors in the form of dividends, which came to 4.5p at the end of 2024, inclusive of a 1.5p interim dividend outlined in July”.

    Babcock’s Annual Report for FY 2025 represents its first FTSE100 index listing after over 7 years absence. The company was pleased to announce revenue of £4,831m, of which underlying operating profit represented £363m, up from £238m in 2024, with underlying operating profit margin of 7.5%. It notes that Statutory Cash from Operations was £357m, down from £374m in 2024, but that the organisation found non-GAAP reporting standards to more accurately represent its financial position.

    Around 74% of Babcock’s revenue is from defence contracts, with 5% from civil nuclear. It points to a £10.4bn “contract backlog” of forward orders yet to be delivered. Its underlying free cash flow was £153m, with net debt levels excluding leases standing at £(101)m.

    The company’s key business divisions as follows:

    1. Marine – design, build and through-life support for warships and submarines, and associated weapons handling and launch systems; creation of secure military communications systems; and what is claims are “world-leading commercial liquid gas equipment systems.
    2. Nuclear – through-life complex engineering support to the entire UK submarine fleet; owner-management of infrastrcture including Devonport dockyard; UK civil nuclear new build, generation support and de-commissioning projects; other international contracts in civil and defence markets.
    3. Land – asset management and through-life support for complex military equipment as well as ongoing skills training for ground deployment; systems integration and engineering services in power gen, transport networks, and mining equipment.
    4. Aviation – flying training for UK’s Royal Airforce, French Airforce and French navy; through-life support of military flying assets and other air operation support “for government programmes, saving lives and protecting communities”

    The company says the average underlying operating cash conversion is higher than or equal to 80%, and highlights a number of innovations as follow:

    i) better alignment between project management, engineering and commercial functions to mobilise pipeline contracts, as part of Global Business Management System to ensure continuity and identify risk factors.

    ii) improved governance controls for bidding, strengthening the legal review process on tenders.

    iii) FY25 published first Supplier Assurance Handbook to mitigate procurement risk, “enhancing transparency by detailing our sustainability considerations, audit and development process.”

    iv) new AI functionality with capex developing Athena – “As we look to FY 2026, the program will focus on large-scale integration across the business, supporting our governance of costs and efficiencies.”

    v) In employee management, it has rolled out an Engineering Role Framework with on-the-job training in key competencies, developing a Production Support operative scheme to access a wider talent pool; apprenticeships in space systems and cyber security; and taking a leading role in the UK’s National Nuclear Strategic Plan for Skills.

    Wide Moats – the Investment Prospect

    • own initial assets, with long lifecycle
    • operational asset knowledge and capability transfer
    • strategic partnerships with high barriers to entry

    Looking ahead, FY25 saw a refocusing of the technology team, “establishing cross sector and country working groups for each of our strategic technology capability teams… These themes drive innovation, ensure our technology relevance and empower us to deliver cutting-edge, practical solutions.”

    Babcock CEO trumpeted an upgrade in the company’s medium-term guidance, and a 30% increase in full-year ordinary dividend as well as revealing a £200m share buyback program which will be rounded off in FY26.

  • Analyst note Costain

    Costain Group Annual Report states they “received prestigious recognition for our approach when we obtained the London Stock Exchange’s Green Economy mark.

    “This identifies companies that generate at least half of their revenue from products and services that contribute to the green economy. The mark is only held by around 6% of companies on the LSE.”

    Note that a £10million share buyback program concluded in November 2024. Over the previous financial year, cash from operations FY24 was £42.7m (FY23: £69.6m), “resulting from increased operating profits offset by year-end timings of certain cash receipts at the end of FY23 and FY24, together with some end of contract outflows in FY24.”

    The adjusted free cash flow in FY24 of £27.1m (FY23: £70.2m) was lower than the same period last year largely “due to the timing of year-end working capital and higher tax and expenditure payments” with internal adjustments as funding was diverted into updating infrastructure, requirements for new business systems; and increased cash flows on adjusting items, with turn on non-current assets offset against “reduced pension fund deficit contributions.”

    Liquidity considerations aside, the adjusted operating profit margin was 3.4% compared to 3.0% FY23 yoy, with 4.4% growth in H2 as Costain states it saw greater operating efficiency and productivity in the Natural Resources division, with higher marginal profits.

    Total revenue from transport fell from 943.1m in 2023 to 845.8m in 2024, at a higher operating margin of 3.5% from 3.0%. Road and rail takings fell, although integrated transport projects experienced expansion of 92.7% The net business forecast is for an optimistic 5% growth rate for FY 2025 after an initial target of 4.5% over the course of 2025.

    As regards sustainability targets, their Scope 1 emissions reported 4,772 down from 4,875 (-2.1%) and Scope 2 (-3..16%) was 888 down from 1,299. Scope 3 emissions saw just a 1% increase from 281,765 FY23 to 278,248 FY24. In terms of accountability, Costain reports that 100% of relevant contracts were working in accordance with PAS 2080.

    Its ambitious target is for a 6% yoy reduction in Scope 1 and Scope 2 emissions, the same percentage for the absolute emissions value. In some ways accepting the limitations of its capacity to cap emissions is preferable to mis-reporting it, which happened recently with UK energy company Drax, whose share price fell over 10% in a day immediately after regulators signalled an investigation into whether the provenance of wood chips for biomass pellets was actually sustainable, and the emissions reporting for the diesel ships transporting wood chips from the US did not comprise a Scope 2 or 3 emissions estimate.

    Costain is targeting a dividend payout of 3x adjusted earnings. Payments were resumed in FY23 with a full-year dividend of 1.2p per share for the year, in line with the pension payments required for the year under the “dividend parity arrangement.” The board has approved a final dividend of 2.0p per share.

    The company is transparent about its desire to capitalise on the problems caused by climate change, and highlights the risk-based opportunities for its diverse business lines –

    “There is a high potential in the water sector – the capacity of sewage needs to be increased to deal with additional strains placed on it by rainfall intensity coupled with increased demand,” and considering the enhanced “maintenance and modification to improve the drainage capacity or resilience of its assets.”

    It highlights the initiative of a carbon tracker which will provide unified measures of resource usage across different project lines, and demonstrate areas of improvement relative to industry benchmarking.

  • Last Week’s Financial Round-up 08/09/25

    Gold pricing reached a new peak above $3500, alongside an 8.10% expansion in equity from Fresillo, a Mexican silver mining company incorporated in the UK which was one of the week’s high performers and infrastructural investment represents an effective counterpoise to gold contracts.

    According to the Times, growth obstacles for UK listed companies comprising “tax rises, slowing wage growth and sticky inflation” are affecting several service providers.

    Bunzl, for example, which sells PPE and sanitary equipment to healthcare and health and safety providers, as well as packaging, was poised to take advantage of new overseas markets as M&A revenue and adjusted operating profit for the year increased 7.9% with conversions indicated 3.1% revenue growth on an 8.3% operating margin.

    In its annual report, Costain reported cash from operations in FY24 was £41.7mn, (FY23: 69.6mn), resulting from “increased operating profits offset by year-end timings of certain cash receipts at the end of year FY23 and FY24, together with some end of contract outflows in FY24.”

    The company cited the “timing of year-end working capital” as well as “higher tax and capital expenditure payments” on investment in new systems and “higher cash flows on adjusting items”, although meeting the pension contribution deficit may have a detrimental effect on liquidity.

    Inflation proxy indicators

    Indeed, the CPI for July stood at 3.8%, up from 3.6% for June. The RPI, excluding the costing change in fuel and energy, was 4.8% for July, an increase from 4.4% yoy growth for June. The Producer Price Index (PPI) provides forward-looking outlooks of upcoming price increases based on slack vs actively engaged capacity, and acts as a measure of manufacturing inflation.

    The Purchasing Manager Index (PMI) provides an indication of future orders and growth outlook based on forward-looking pricing on manufactures and services.

    Trump’s foreign policy this month have not affected appetite for US 10-year Treasuries, which were stable as the return on Treasury bills, which must be held for 10 years until maturity, increased by 1bp from 4.27to 4.28.

    The coupon paid out on UK 10-year gilts rose from a yield of 4.84 the preceding week to 4.90 correct as of 2 September, reflecting market speculation surrounding suggested tax cuts to be announced in the Budget on 26 November, which may contain a new wealth tax to meet the current spending shortfall.

    Note that the Sentix Investor Sentiment Index, published today on forexfactory, was at -9.2 vs a forecast of -2.2; whereas the forecast for August was actually positive, and forward-looking analysts put the prediction at 6.2 where the actual value, predicated on a diffusion index based on surveyed investors and analysts, was -3.7.