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Taking a long term view on the challenges facing the UK market

Andrew Hayes
Managing Partner

There have been few years in recent decades that have seen the recent combination of outbreak of war in Europe and a fight by policymakers against an onslaught of economic headwinds. Moreover, legislators are confronted with a dilemma: rampant inflation – which could trigger a recession – or the introduction of more fiscal support to help struggling citizens, which will add to already high levels of public debt. Recessionary pressures are prevalent in the UK and internationally where ever we operate.

We have been active in the market for over thirty years since our foundation in 1988 and have seen multiple downturns. So, we know that in challenging times it is more important than ever to stand with our clients but also to invest in our business for the recovery as others take shorter-term decisions. As a wholly independent partnership with no outside shareholders, we are able to take a long term view over this challenging period.

Corporate purpose

With these uncertainties capital market activity is paused, with companies and investors waiting for more stable market sentiment. Whilst CEOs continue to drive action on their sustainability initiatives, there is no doubt that there is less consumer and investor interest in environmental, social and governance issues as heightened cost of living challenges dominate.

However, we believe putting corporate purpose at the heart of financial and corporate communications is essential to all stakeholder communications and that ESG must remain a primary focus whatever the distractions. HS Sustain continues to count amongst the market leaders in helping companies establish and articulate their sustainability strategies and ESG methodologies. We have recently supported the launch of a sustainability strategy for a FTSE 100 company, overseeing materiality assessments, sustainability reporting and net zero strategies, supply chain audits, ESG-related internal investigations, origination of a sustainability report and support on subsequent engagement with stakeholders. We are working on multiple similar mandates for clients large and small, in the UK and internationally.

M&A activity

While IPO activity has been very limited, we have supported on some the market’s highest profile M&A transactions. This includes advising our long-standing client Capital & Counties on their merger with Shaftesbury to create Shaftesbury Capital – that will have a portfolio in central London spanning Covent Garden, Carnaby Street, Chinatown and Soho.

In another landmark transaction we worked with 888 on their £1.95 billion acquisition of William Hill to create a global leader in the online sports betting and gaming industry. In a key strategic industry, our new client EV Metals Group bought the assets of Johnson Matthey’s battery materials operations to become a vital supplier to the fast-growing electric battery market.

Emerging markets

Our emerging market business continues to thrive, now focused on EMEA with our offices in Almaty, Lagos and Nairobi. We were delighted to welcome Onyebuchi Ajufo as a Partner based in Lagos (joining from Africa Practice to head up our East African practice) and Michelle Anekeya – also joining as a Partner and based in Nairobi, arriving from Hill & Knowlton to lead our East African franchise. We are building Africa’s leading strategic communications business, with clients spanning the private sector and NGOs as well as sovereign entities.

We stopped our Russia business immediately following the horrific invasion of Ukraine. Over the years we had carefully built a franchise of blue-chip clients and employed some of the most talented people in the market, who we worked hard to redeploy across the rest of the business. We are proud that in the current year we will achieve significant growth despite this setback, a testament to the hard work and skills of the team, and our long-term client partnerships in the UK and internationally. This includes good growth in the ‘Stans’ with colleagues moving to Almaty and London from Moscow.

Investor relations

We have sharpened our IR focus with the recruitment of Mark Walter as a Partner, joining from Instinctif. In times of a rapid change, clients will be stress testing their investment cases and we have never been better equipped to help them do this, with Mark on board.

We are in no doubt that our ‘One team, Diverse Thinking’ culture is more valuable than ever in challenging times. We are structured to ensure that we are properly joined up with no silos, able to support all members of the team. Our commitment to creativity and sound counsel across everything we do is undiminished as we work to deliver for our clients.

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