2021 Budget and COVID: A conversation with Isosceles CEO Mike O'Connell

2021 Budget and COVID: A conversation with Isosceles CEO Mike O’Connell

In the inaugural edition of our ‘conversations with Isosceles CEO Mike O’Connell’, we get a vignette into Mike’s mind; discovering some of the topical issues of the day that have caught his attention, how recent developments are impacting Isosceles, and the specific areas he will be monitoring over the coming weeks.

Over to you, Mike.

On COVID-19…

“A lot is going on in the world with regards to COVID-19”, Mike explains, “but from a macro perspective, I am thinking about how and when we will be able to ramp up in the economy.”

“People frequently make the comparison with the Second World War or the Spanish Flu pandemic of 1918, and it’s an appropriate and relevant comparison”, Mike adds. “The Coronavirus pandemic is a once in a hundred-year black swan event; you (a government) do not just recover your economy and recoup your lost tax revenue in a year or two; you must spread that over time.”

“We have quite a few clients in the biotechnology and life sciences space that have been actively engaged in addressing the global pandemic,” Mike describes, “so it has been really interesting and rewarding to see just how involved some of our clients have been.”

Speaking specifically about some of our clients, Mike comments on COVID diagnostics business Cignpost Diagnostics’ “implementation of infrastructure to provide testing in several different environments” and “Cignpost’s rapid growth to become one of the fastest-growing companies in the UK”.

“Clients like Volition RX,” Mike explains, “who are experts in the field of nucleosome analysis, have developed a way of testing how severely one may develop COVID-19.”

“How great would it be if we knew a patient being admitted into a hospital was going to develop a serious bout of the disease; hospital administrators would know where to deploy and allocate the finite number of medical resources,” Mike adds.

“Meanwhile, companies like Emergent are conducting research into vaccines, and SwiftDX is looking at rapid diagnostic techniques and how such methods may be deployed to allow healthcare professionals to diagnose COVID-19 more efficiently.”

“AI company Faculty are using their analytics and machine learning capabilities to predict, monitor and model the COVID spread and helping the NHS in its efforts to combat the;  spread of the disease.”

Related | Isosceles’ biotechnology and life sciences clients addressing COVID-19

On the Budget 2021…

“Sadly, the Chancellor took a big bite out of Entrepreneurs’ Relief (ER) (later renamed as Business Asset Disposal Relief (BADR)) last year”, Mike opines, “reducing the amount of capital gain covered by Entrepreneurs’ Relief from £10 million to £1 million, reducing the benefit to entrepreneurs from £1 million to £100,000.”

“On the day of the Budget, I will be paying close attention to the specific changes that may affect our entrepreneurial client base in the short term and long term.”

“The Chancellor and his department have been flying quite a few flags, some of which are quite alarming”, Mike warns. “You can’t help but think that this is a particularly bad time to raise taxes; any aggressive changes at this point might have the opposite effect of what was initially intended.”

“More recently, there has been chatter regarding the total removal of ER, (BADR) which would be very sad,” Mike adds, “and there is also talk of increasing capital gains tax or even aligning it with the rates of income tax which would represent a doubling of the tax burden to an entrepreneur.”

“In the economy, there seems to be an attitude of ‘who cares if entrepreneurs have to pay a little more in tax today?’” Mike continues. “However, when those business people don’t invest in the long run or refuse to reinvest, then that limits the ability to fund new businesses and employ a new generation of smart people. It’s even worse if changes in taxation motivate entrepreneurs to look at ways of paying no tax at all.”

“Companies need to get back on their feet first,” Mike explains, “and taxing companies at this unique and challenging time is counter-intuitive in my opinion; for it is better to build a stronger economy and recoup the lost tax revenue once companies are back on their feet permanently.”

“In light of these reasons, I’m concerned about some of the noises coming out of number 11.”

“However, I await further details to be announced on 3 March 2021 before coming on the announcements in greater depth”, Mike concludes.

On Isosceles…

“Internally, I have been trying to think about what the “new normal” is going to be”, Mike explains.

“Overall, we have responded well to the lockdown measures implemented by the Government, but this is tough, from the cancellation of Christmas plans and limitations on exercise to restrictions on household mixing and a third national lockdown.”

“The complexion of the business environment has changed beyond all recognition in the last 12 months,” Mike summarises, “and people have enjoyed the freedom and flexibility that working from home has allowed.”

“However, it has raised several pertinent questions for us; we have outgrown our office in Sheffield so expanding it poses several issues related to what size and structure of office are right in the post-COVID new norm.”

“Fortunately for us, from a work perspective, we were already well-equipped to deal with the different demands of flexible working; everyone had laptops, desk facilities, company-wide access to Microsoft Teams and secure cloud file storage. These factors allowed us to seamlessly integrate into the new way of working to continue to support our clients and position ourselves in the most advantageous position to launch forward.”

“I must also thank our social committee who have worked diligently to encourage the use of informal channels of communications at Isosceles and created a well-received program of engaging virtual opportunities, such as quizzes, discussion groups and much more.”

Explaining how the latest intake of graduates at Isosceles have still never met their colleagues face-to-face, Mike comments: “We have had to think hard about how to support and monitor our recruits to ensure nobody is falling off the radar.”

Looking ahead…

“In the macroeconomy, I will be looking for signs of revival,” Mike explains.

“We observed a massive hit to UK GDP last week with a record 9.9% annual slump. While this is not altogether surprising, amazingly, it was under 10% given the enormity of what we are facing.”

“It will be interesting to observe the developments in the US post-Trump as Biden gets his Cabinet appointed and rescue package implemented. I am also interested to see how US businesses and stocks respond to these developments that are currently underway.”

Turning to the UK, “it will be interesting to monitor the rates of vaccinations in the UK,” Mike adds. “I believe within the next few weeks we should start to get visibility of when the lockdown may ease and when it might get more visibility in Europe too because ultimately, we need a thriving Europe because European nations purchase a lot of goods and services from the UK.”

“Internally, I will be taking the temperature of the business over the next few weeks. Hopefully, we will see mood lift as we start to see a light at the end of the tunnel.”

“Isosceles has been very strong through this period, so I am hoping some of our exciting plans to improve our infrastructure for growth will start to come through to fruition.”

“Finally, we have recently hosted some exciting virtual iFD Community events which have introduced Isosceles and our new division, iFD, to a community of finance directors and CFOs.”

Related | iFD hosts second virtual iFD Community event

“Our next iFD Community event is set to be hosted at the end of March (details to be announced shortly). We will discuss some interesting and thought-provoking topics within the remit of the tech-enabled finance director, including the application and implementation of Microsoft Power BI and how we have been using it and the insights it generates.”

“We are also looking forward to learning more about the experience of the FD community in developing these new tools as business intelligence continues to come to the fore,” Mike concludes.

We will be catching-up with Mike again soon to find out a bit more about what is on his mind.

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