North Sea, fishing and M&A activity at forefront in 2018

● Experts at top accountancy firm offer up predictions for Scotland’s economy

economy is likely to see a further upturn in North Sea activity, increased investment in the fishing industry and a busy year of mergers and acquisitions (M&A) activity, top business advisers today predicted.

Experts are also forecasting increased consolidation in Scotland’s craft beer and gin sectors during 2018, further disruption in financial services from alternative lenders and wider adoption of charging infrastructure for electric vehicles.

However, the farming sector is likely to face challenges “on several fronts” while the credit card surcharge ban will lead to price increases, according to Johnston Carmichael (JC), which ranks as the largest independent firm of chartered accountants and business advisers in Scotland.

Looking at the outlook for merger and acquisition activity, Graham Alexandeen der, the firm’s head of corporate finance, said: “Whilst there continues to be ongoing uncertainty in the general economy due to Brexit, we are seeing no slow-down in businesses and funders looking to invest nor from business owners looking to pass on their businesses to new investors.

“We would see 2018 continuing along similar lines with a hope that, once the outcome of the Brexit process becomes clearer, the increased certainty will allow for continued strong activity in the M&A market.”

Alex Martin, head of fishing, said: “Recent quota increases for key fishing stocks including cod and haddock have been welcomed by the Scottish fishing sector which could be strengthened further as Scotland regains control over its waters post-brexit.

“While there is still uncertainty over Scotland’s future share of the catch, there is a real confidence in the future of the industry which is reflected in the number of new vessels being built.”

Andrew Walker, joint Aberscotland’s office managing partner at JC, pointed to a further recovery in oil and gas.

“The oil and gas services market is seeing some pick up, and while patchy, with a more stable oil price and continuing M&A activity in offshore assets, we are starting to see this filter into the wider supply chain; feeding increased confidence and M&A activity both in the UK and internationally.”

Meanwhile, the firm’s head of food and drink, Adam Hardie, noted: “With Innis & Gunn accepting a private equity investmentandthe2016acquisition of Edinburgh Gin by Ian Macleod Distillers proving to be a success, I suspect we will see a raft of new deals in Scotland’s drinks sector in general, and craft beer and spirits in particular in 2018.

“Scotland’s food and drink industry has ambitious plans to double in value by 2030, making it very attractive to investors with the appropriate experience and background.”

Hardie added: “I think we willseeastrongincreaseinthe number of Scottish businesses sourcing peer-to-peer lending, which matches borrowers directly with lenders, in 2018.”