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The Sunday Times Business - 18 March 2018

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BUSINESS
&MONEY
March 18, 2018 · thesundaytimes.co.uk/business
thesundaytimes.co.uk/money
BALLERINA ON
HER TOES
FAME AND FORTUNE
MONEY,
PAGE 20
DOMINO’S BOSS
DAVID WILD
INTERVIEW, PAGE 7
ISA SPECIAL
EIGHT-PAGE
PULLOUT INSIDE
Heathrow is under pressure
to cut blockbuster dividends
for its shareholders while it
builds a £14bn third runway.
Ministers and airlines are
demanding that Europe’s
busiest airport holds down
charges — which could see the
industry watchdog, the Civil
Aviation Authority (CAA), cap
payouts. Heathrow could be
forced to divert spare funds
into the new runway, and to
strengthen its finances.
Heathrow paid more than
£3bn in dividends since its
debt-fuelled buyout in 2006.
Combined with a huge
building projects, including
two terminals, this pushed
debt to £13.7bn last year.
The gigantic borrowings
force Heathrow to divert a
large portion of its cashflow
to creditors. Last year it paid
more than £560m in interest,
alongside £525m in
dividends, and it approved
another £114m payout to
shareholders last month.
That could leave its balance
sheet vulnerable if the
runway project hits
difficulties or the aviation
industry suffers a downturn.
The runway would almost
double the size of Heathrow’s
£15.8bn asset base.
The airport’s shareholders
make a return from take-off
and landing charges, which
add about £20 to each
passenger’s ticket. Transport
secretary Chris Grayling has
insisted that Heathrow keep
charges close to current
Melrose to
pump £1bn
into GKN
pensions
Raider answers critics
with fund pledge — in bid
to clinch £8bn takeover
John Collingridge
Melrose has made a dramatic final pitch
for GKN by promising to plough £1bn into
the engineering titan’s cash-strapped
pension fund.
The turnaround firm is understood to
have bowed to demands from GKN’s pension trustees to substantially raise its initial offer of a £150m injection for the fund.
The move could topple one of the biggest
obstacles to the £8.1bn takeover bid.
The GKN pension fund has a deficit valued between £700m and £2.2bn. It has
stoked concern about the bid from MPs,
unions and the pensions watchdog, who
Melrose chief
executive
Simon Peckham
fear the 34,000 members could be left
worse off.
Melrose’s advances have been rejected
by GKN, which has come up with its own
break-up plan. It wants to sell its automotive business to the US company Dana,
and focus on making parts for aircraft,
including the A380.
GKN said the Dana tie-up would
“entirely eliminate” the deficit in the
remaining aerospace pension scheme,
with more than half the liabilities shifting
to the American business.
The proposal has won approval from
the pension trustees, chaired by Rufus
Ogilvie Smals. He said that Melrose’s initial offer to inject £150m was a “very inadequate sum”.
“Everywhere we look on the Melrose
side we see more risk compared with the
status quo,” he told The Sunday Times.
“That makes it difficult to persuade ourselves to accept £150m by itself. It’s a very
inadequate sum given the increased risk
the Melrose offer spells for our members.
“The
problem
with
Melrose’s
approach of buy, invest, sell, is that it’s a
relatively short-term model. These businesses could end up in pieces with a
range of owners in different countries
and we do not know if they would have
any regard for pensions. These pension
liabilities run for 50 years. We must take
an extremely long-term view.”
However, Ogilvie Smals said he was
“confident that Melrose does understand
our concerns and that a substantially
increased offer is called for”. He added
that talks were continuing with Melrose,
which is believed to be prepared to double annual pension contributions, and
inject extra lump sums from disposals.
The turnaround firm’s advances were
dealt a blow last week when GKN’s largest
customer, Airbus, said it would be “practically impossible” to give new work to
the company if the hostile takeover succeeded. Melrose will hold a conference
call with senior Airbus executives this
week in an effort to win them over.
The clock is ticking: GKN shareholders
have until next Thursday to accept Melrose’s cash and shares offer, which was
raised last week from £7.3bn.
This weekend, two more leading GKN
investors backed its opposition to the
takeover. Pelham Capital and Sanderson
Asset Management said the increased
offer still undervalued the business.
Melrose, led by chief executive Simon
Peckham, is now the second most
shorted stock on the London market. The
company declined to comment.
levels. Airlines, including
British Airways, have argued
that fees should not rise.
Heathrow is owned by the
Spanish construction giant
Ferrovial alongside Qatari,
Chinese and Singaporean
sovereign wealth funds. The
Universities Superannuation
Scheme, which invests the
pensions of British
academics, owns 10%.
The CAA has hired
consultancy KPMG to analyse
“measures that could improve
the financial resilience of
Heathrow Airport Ltd,
including a gearing cap, a
minimum liquidity
requirement or minimum
credit worthiness”.
A cap on Heathrow’s
gearing — a measure of its
debt as a proportion of the
value of its assets — would
ban dividends if borrowings
climb above a certain level.
Heathrow’s gearing stands
at 87% — far higher than
similar businesses — and it
wants to stretch its balance
sheet further, taking the ratio
APPLE EYES LEADING
ROLE IN HOLLYWOOD
PAGE 9
APPOINTMENTS
PAGE 8
PUZZLES
PAGE 18
12
14
Heathrow owners urged to stop huge payouts
John Collingridge
TECH
up to 93%. In 2012, the CAA
imposed a gearing ceiling on
the air-traffic company Nats.
Heathrow told the CAA
that debt limits would be
“disproportionate to the
possible benefit they might
provide” and said it “operates
the business’s financing in a
manner that delivers
financial resilience greater
than its financing
arrangements require”.
The cash machine with an
airport attached, page 5
CHRISTIE GOODWIN
KYLIE’S PILLOW FIGHT
Pubs giant M&B
in benefits row
with trustees
Oliver Shah
The pubs operator behind
All Bar One and Harvester is
embroiled in a High Court
row with its pension trustees
over a plan to cut retirement
benefits for more than
20,000 people.
Mitchells & Butlers has told
the trustees that it wants to
reduce the level of annual
increases paid to members of
its defined benefit scheme.
The fund, which was set up
in 1946 for workers in the
Bass brewing conglomerate,
has a deficit of about £345m.
M&B told the trustees it
believed it had the power to
make the change unilaterally.
They disagreed, and started
legal action last month after
almost two years of
wrangling.
Defined benefit pensions
promise to pay savers a
retirement income based on
their career earnings. Almost
two-thirds of such schemes
are in deficit, according to the
Pension Protection Fund.
Following the collapse of
BHS and Carillion, which
both had big deficits, Theresa
May will announce plans
tomorrow to give the
Pensions Regulator new
powers to fine or prosecute
bosses. She wants to make it a
criminal offence for them to
shirk responsibilities, and
make it easier for the
regulator to intervene earlier.
According to court papers,
M&B wrote to the trustees
last May, ordering them to
lower the rate of annual
pension increases. They
currently rise in line with the
retail prices index measure of
inflation, capped at 5%. The
company wants to use the
lower consumer prices index
instead, still capped at 5%.
Martin Hunter of the
pensions consultancy
Xafinity Punter Southall said
the move, if successful,
would lower M&B’s liabilities,
and reduce the deficit
“substantially”.
The trustees claim that a
Continued on page 2 →
Berkeley takes tilt
at Earls Court site
Ben Harrington
and Oliver Shah
The upmarket housebuilder
Berkeley Homes is eyeing an
approach for the Earls Court
site owned by Capital &
Counties, the troubled FTSE
250 property developer.
Berkeley, run by veteran
builder Tony Pidgley, is
understood to have held a
preliminary conversation
with CapCo about the west
London scheme in the past
six weeks, but sources said it
had not progressed.
CapCo valued its Earls
Court interests at £1bn at the
end of last year. Although that
was a 28.5% cut from the peak
valuation at the end of 2015,
Berkeley is understood to
believe the site is worth
roughly half that amount.
It is not clear whether
Kylie Minogue and Ashley Wilde are taking high court action again B&M over its ‘Kylie’ products
Home furnishings designer
Ashley Wilde and pop star
Kylie Minogue are suing
discount retailer B&M for
selling two products named
“Kylie”, writes Liam Kelly.
The Australian singer, 49,
endorses duvets, pillows and
throws made by Ashley Wilde
under the “Kylie Minogue at
Home” brand.
Wilde and Minogue’s
business said in a High Court
claim that B&M’s bed linen
and cushion – called “Kylie
Sparkle” and “Kylie Boudoir” –
were a “deliberate attempt to
imitate” Minogue’s products,
causing “damage to the
reputation and goodwill” of
the singer’s business.
B&M, which has changed
the name of the cushion,
denied the allegations. “If
perceived as a reference to
any person, it is Kylie Jenner
and not Kylie Minogue,” said
the FTSE 250 retailer in its
filing. Jenner is a member of
the reality TV Kardashian clan.
The case is to be heard later
this year. B&M said: “We don’t
think a pop star can ‘own’ such
a popular first name, however
famous she is.” Minogue and
Wilde declined to comment.
Berkeley is interested in
CapCo’s entire Earls Court
interests or just its share in a
joint venture with Transport
for London over part of the
site, valued at £561m.
CapCo has been buffeted
by the waning market for
luxury London properties
and a political row with
Hammersmith & Fulham
council, which turned from
Tory to Labour in 2014. Part
of CapCo’s scheme falls
within the borough. In
January, the council branded
it “undeliverable”.
Predators have scented
opportunities amid CapCo’s
problems. Olayan Group, a
Saudi Arabian fund with links
to Britain’s Chelsfield, is
understood to have been
looking at its other main
asset, properties in Covent
Garden worth about £2.5bn.
Give the City a fair deal,
Luxembourg tells EU
Rosamund Urwin
The finance minister of
Luxembourg has called on
the EU to “be creative” and
offer a unique deal that will
protect financial services in
Britain and on the Continent,
ahead of a crunch meeting of
European leaders this week.
“We should look at
thinking in new categories
and be creative . . . in the
new relationship,” Pierre
Gramegna told The Sunday
Times. “Maybe we are stuck
too much in precedent.”
He warned that despite
European cities, including
Paris and Frankfurt, battling
to attract business from
London, a bad Brexit
deal would make it
increasingly likely that
companies will “repatriate”
Continued on page 2 →
2
The Sunday Times March 18, 2018
BUSINESS
DIGEST
CASH FOR ROBO
RECRUITERS
SCHRODERS
PAYS BOSS £7M
The chief executive of fund
manager Schroders saw his
total pay packet jump by
12% last year.
Peter Harrison, above,
who was promoted to the
top job in April 2016,
earned £7.1m, including
£6.6m in bonuses. The
payouts came after a
record year for the firm,
with profits increasing 23%
to £760.2m.
Last year, Schroders
faced an investor rebellion
over the salaries paid to its
top team. Advisory firms
Glass Lewis and Pirc urged
shareholders to reject the
company’s pay proposals.
SOGGY SUMMER
DAMPENS B&Q
Kingfisher
380p
360
340
320
300
280
MAM J J A SOND J F
Source: Thomson Reuters
B&Q owner Kingfisher is set
to report a slump in annual
profits, due to a weak
property market and last
summer’s wet weather.
Pre-tax earnings fell from
£759m to about £620m in
the year to the end of
January, according to
analysts.
Boss Véronique Vaury is
in the middle of a five-year
programme to revitalise the
company, which operates
in Britain and France. The
aim is to boost profits by
£500m a year by 2021.
An online recruitment
platform that uses artificial
intelligence (AI) to match
office vacancies with
temporary staff has raised
£1m of seed funding.
Tempo, which launched
last May, allows jobseekers
to upload video profiles
suggested to employers
using AI algorithms.
It was founded in London
by Ben Chatfield, 29, and
Oliver Povey, 28. They claim
to make matches faster
than a traditional
recruitment agency, and
say their fastest placement
took just 27 minutes.
The duo plan to use the
money to expand further
in the capital.
The cash was raised in a
round led by Hambro Perks,
the start-up incubator
co-founded by veteran
financier Rupert Hambro.
Carney ready to signal rate rise
despite slowdown in inflation
City bets Bank will
increase borrowing
costs in May
Tommy Stubbington
Bank of England governor Mark Carney is
set to lay the groundwork this week for a
an interest rate rise in May, despite signs
that inflation is slowing. The Bank is
widely expected to keep the cost of borrowing on hold on Thursday, but economists will be looking for clearer hints of
an increase at its next meeting.
Last month, the Bank’s monetary policy committee (MPC) said rates may need
to rise “somewhat earlier and by a somewhat greater extent” than markets were
expecting, due to better than forecast
economic growth.
Since then, deputy governor Sir Dave
Ramsden — one of a dovish minority on
the MPC — told The Sunday Times that his
views have moved closer to the majority
on the committee.
Traders are now pricing in a roughly
70% chance of a May increase.
“We doubt the Bank will need to go as
far as it did in September, when it felt
forced to hand-hold the market through a
November rate rise,” said George Buck-
ley, UK economist at Nomura. “But we do
think the MPC will be keen to, at the very
least, preserve, and possibly raise, market pricing for interest rate rises.”
Inflation figures for last month are
expected to show a slowdown to 2.8%
from 3.0% in January, still well above the
MPC’s 2% target. Despite easing inflation,
some MPC members may choose to vote
for a rate rise as soon as this week,
according to Investec economist Philip
Shaw. Rate-setters have been watching
carefully for signs that wage growth is
picking up, which could lead to more persistent above-target inflation.
Official figures on Wednesday are
expected to show a 2.6% year-on-year
Hammond sets
out blueprint for
fintech future
£40M CUSHION
1.67%
Tim Shipman
Political Editor
Britain’s spending on
research and development,
as a proportion of GDP,
according to the latest data
from the Office for National
Statistics. The EU average is
2.03%, meaning the UK lags
well behind Germany and
France in its R&D spending
— which can be a key
indicator of future
productivity growth.
TRUMP TARGETS
CHINESE GOODS
President Donald Trump is
set to step up his trade war
by slapping $60bn (£43bn)
of tariffs on Chinese
imports, in retaliation for
Beijing’s alleged theft of
intellectual property.
Power tools and small
electrical appliances could
be targeted by the new
levies, which may be
announced this week.
Trump‘s tariffs on steel
and aluminium come into
force this week, and will be
at the top of the agenda for
finance ministers at the
G20 meeting in Argentina.
Designs on expansion: made.com is looking to grow its home furnishings brand across Europe
An online furniture retailer
that sells everything from
high-end sofas to designer
laundry baskets has raised
£40m to expand across
Europe, writes Peter Evans.
Made.com, which was
started in London eight
years ago, connects
customers with furniture
designers and operates in
seven European countries.
The company, founded
by entrepreneur Ning Li,
employs more than 300
staff in Europe and Asia. In
recent years, Made has
designed its own products
and extended its range to
home accessories, such as
bath mats and cutlery.
Made raised £40m three
years ago, but has yet to
make a profit. In 2016, the
business made a pre-tax
loss of £6.1m on revenue of
£91m. Sales last year
Andrew Lynch
Luxembourg raises
hopes for City deal
Readers are invited to submit
nominations for the
Maserati 100, our annual list
of inspiring entrepreneurs.
The Maserati 100,
supported for a fourth year
by the Italian luxury car
maker, is dedicated to
innovators — entrepreneurs
who take a big idea and
make it work.
The public nominations
will be judged by a panel of
industry experts from The
Sunday Times and those
selected will be included in
the Maserati 100, which will
be published on April 29
inside Business.
Last year’s Maserati 100
focused on disruptors. It
featured inspirational
entrepreneurs such as Tim
→ Continued from page 1
activities to centres outside
the EU, such as New York,
Singapore and Hong Kong.
“Some of the financial
centres outside the EU are
very actively courting
institutions and devising
schemes to attract [firms],”
Gramegna said.
“A number of firms I speak
to have an option B ready that
involves repatriating EU
activities to their
headquarters.”
It comes as the Brexit
secretary David Davis heads
to Brussels today for talks
with EU leaders.
He is widely expected to
secure a transitional deal at
a summit of the European
Council later this week.
Join the race for
the Maserati 100
Warrillow, co-founder of the
premium tonic water brand
Fever-Tree; Paul Lindley,
creator of the Ella’s Kitchen
food range; and Sophie
Cornish and Holly Tucker
of the online retailer
notonthehighstreet.com.
To nominate an
entrepreneur or group
of entrepreneurs, visit
maserati.co.uk/Maserati100.
Nominations close on March
26 at midnight.
Laying the
groundwork:
Mark Carney
increase in average weekly pay, up from
2.5% in January.
Carney and his colleagues will also be
keeping one eye on events across the
Atlantic, with Jerome Powell widely
expected to raise rates at his first meeting
as chairman of the US Federal Reserve.
Fears of higher US inflation, which
triggered last month’s stock market meltdown, could return, according to Randy
Kroszner, a former Fed governor.
“Given the strength of the US economy
and the positive impetus from tax cuts,
it’s possible that there could be a more
rapid rise in inflation than expected,
which would push the Fed to move more
quickly,” he said.
Theresa May has been
pushing for a “mutual
recognition” deal for financial
services.
However, Gramegna
argued that “equivalence” —
where the UK becomes a ruletaker — could be used as a
basic model on which to
build.
“Equivalence was designed
as an ad hoc fix for certain
specific activities,” he said.
“Does that disqualify it
completely?
“Is there no merit in
looking at how we could
make it workable through an
innovative approach in
financial services, where
governance and scope need
to be spelled out?
“Maybe we should get the
experts together and . . . see if
solutions could be
reached.”
Last week, a Porsche
executive argued that
“punishing” the UK by
introducing tariffs could cost
German jobs, and that it was
in the interests of the EU to
sign a free trade deal.
“We can’t create a new
trade war,” said Lutz
Meschke, the deputy
chairman of the car maker’s
executive board.
“Imposed trade tariffs will
push up price[s], weaken
demand for Porsche cars in
the UK, and ultimately put
German jobs at risk.”
Meschke added that he
had raised his concerns
with Poland’s Elzbieta
increased by 40% to
£127m, the company said.
It raised the new funds
from existing investors
Partech Ventures, Level
Equity and Eight Roads
Ventures, as well as a new
backer, which the company
declined to identify.
A plan to instigate two giant
infrastructure projects to
boost Britain’s financial
technology sector will be
unveiled by Philip Hammond
this week.
The chancellor will launch
a fintech strategy on
Thursday at an international
conference. He will say that
the Financial Services Trade
and Investment Board has
been told to identify two
areas where industry and
government can work
together to improve the
country’s prospects in the
digital economy.
Hammond will also reveal
details of a planned “fintech
bridge” with Australia, which
will establish closer links
between governments,
regulators and industries so it
is easier for companies from
one country to trade in the
other’s markets.
The new strategy comes
after the government
launched a fintech census in
March last year to identify the
sector’s main challenges.
Companies complained
about the cost and
complexity of regulatory
compliance, problems
finding a skilled workforce
and the difficulties of forming
partnerships with banks. The
strategy will address the last
of these issues, with work
from a “fintech delivery
panel” on the creation of a
new industry standard to
improve the process for
companies wishing to partner
with established banks.
Regional banks and
building societies will also be
urged to adopt financial
technology — a process that
will be boosted by three new
“fintech regional envoys”.
The document to be
published by Hammond will
also spell out plans for a new
taskforce led by the Treasury,
Bank of England and
Financial Conduct Authority.
This will examine the risks
associated with crypto assets
and the potential benefits of
the underlying technology.
Hammond will hail the
strategy as evidence that the
government is looking to
turbocharge a British success
story seen as a central plank
of Theresa May’s industrial
plan. The government boasts
that the UK has the fastestgrowing fintech sector in the
world, generating £6.6bn in
turnover in 2015. A report last
year found 39 fintech firms
around the world valued at
$1bn, with 17 in the UK having
the potential to hit that mark.
The strategy will be used to
highlight the promise of the
sector to global investors.
Pension deadlock at
Mitchells & Butlers
Aware of concerns:
Elzbieta Bienkowska
Bienkowska, the European
Commissioner responsible
for internal markets,
industry, entrepreneurship
and small and medium-sized
businesses.
→Continued from page 1
mistake inserted into the
deeds in 1996, replicated in
2002 and 2006, appeared to
have given the company the
power to change the rate of
annual increases unilaterally,
and also to have taken away
the trustees’ power to choose
the index.
They blame Allen & Overy
and Linklaters, the law firms
that advised the trustees and
M&B respectively in 1996, for
not bringing the changes to
their attention.
The trustees are pressing
for the deeds to be revised to
reverse the changes. In a joint
statement, they and M&B said
they had “been trying to
resolve the position by way of
seeking an agreement . . . for
many months, but have
unfortunately been unable to
do so”. They agreed that it
was “important to obtain
clarity”, and M&B has said it
will cover the trustees’ legal
bills so the pension fund does
not bear the costs of the case.
A separate defined benefit
scheme for senior bosses is
not affected by the dispute.
M&B’s main defined benefit
scheme was closed in 2011. It
now operates a cheaper
defined contribution scheme,
which is also not affected.
M&B was established when
two Midlands brewing
companies merged 120 years
ago. In 1961, M&B merged
with Bass, which was
rebranded as Six Continents
in 2000. M&B was demerged
three years later, with Six
Continent’s hotel interests
becoming InterContinental
Hotels Group.
3
The Sunday Times March 18, 2018
BUSINESS
Fresh woes
for Bargain
Booze board
Simon Duke
Directors of Conviviality
Retail, the embattled owner
of Bargain Booze and Wine
Rack, gave the company’s
internal controls a clean bill
of health in a review last year.
The board conducted a
study of the “effectiveness”
of Conviviality’s financial
reporting procedures, and
decided against creating an
“internal audit function” after
judging that its internal
safeguards were
“appropriate”, according to
the annual report.
The revelation raises more
questions over the
stewardship of Conviviality,
which chief executive Diana
Hunter transformed into
Britain’s largest independent
alcohol retailer through a
slew of acquisitions.
This weekend, the
company’s future hangs in
the balance. Over the past
fortnight it has slashed profit
forecasts, axed its dividend,
suspended its shares and
Mega deals
on way after
shake-up
at Unilever
RATCLIFFE’S BATTLE PLAN
revealed an unforeseen £30m
tax bill. Accountants at PwC
are reviewing the internal
controls after the company
blamed an “arithmetic error”
for its profits warning.
Conviviality is scrambling
to raise more than £100m to
bolster its finances and
reassure suppliers, lenders
and credit insurers. Investors
have put more than £250m
into the off-licence business
since it was floated by buyout
firm ECI Partners in 2013.
They are understood to have
demanded sweeping changes
to management in return for
backing a share placing.
Hunter, 50, is expected to
step down this week, though
may stay on as a consultant.
She could collect as much as
£450,000 compensation. The
former Waitrose executive
took home £966,000 in pay
and bonuses last year.
Conviviality and Hunter
declined to comment.
Three-way split
expected to lead
to takeovers
Sabah Meddings and Peter Evans
One too many for the road,
page 6
Poundstretcher
faces credit crunch
Oliver Shah
Credit insurers are tightening
terms for suppliers to
Poundstretcher, the
struggling discount retail
chain owned by two
low-profile brothers based in
Leicestershire.
Euler Hermes, one of
the leading insurers, is
understood to have reduced
cover for Crown Crest Group,
Poundstretcher’s parent.
Crown Crest is used as the
counterparty by many
suppliers because
Poundstretcher has a weaker
balance sheet.
Pound shops have been hit
by sterling’s fall since Brexit
and slowing consumer
spending. Poundland, the
market leader, had problems
with credit insurance before
Christmas — although some of
the concerns related to its
South African parent.
Poundworld is said to be in
the process of calling in
restructuring experts.
Credit insurers protect
suppliers against the risk of a
retailer going bust between
the point of accepting an
order and payment being
made. When insurers refuse
to provide cover, suppliers
often demand payment
upfront, putting extra
pressure on working capital.
Crown Crest, a holding
company for Aziz and Rashid
Tayub, swung from a £3.4m
pre-tax profit to a £3.5m loss
last year. In May, the Tayubs
tried informally to sell
Poundstretcher to the
turnaround firm Endless, but
nothing came of the talks.
Driven: Jim Ratcliffe is set to decide where the new Land Rover Defender alternative will be built
Jim Ratcliffe, the billionaire
chemicals tycoon, is nearing a
decision on where to build his
new alternative to the Land
Rover Defender — with two
sites in Britain still in the
running, writes Iain Dey.
The £700m project is
expected to create 1,000
direct jobs and support
possibly 5,000 more in the
supply chain. A team of 200
engineers at MBtech, a former
Mercedes-Benz subsidiary,
are already working in
Capita seeks to claw back
bonus from ousted chief
John Collingridge
Struggling outsourcing giant
Capita is expected to strip its
former boss Andy Parker of
an £845,000 cash bonus.
The debt-laden company,
which has crashed to earth
after years of racy expansion,
is understood to be ready to
cancel a bonus entitling
Parker to a payout worth
200% of his salary.
The new chief executive,
Jon Lewis, stunned investors
in January by scrapping
Capita’s dividend and
warning that it needed to sell
assets and raise about £700m
from a rescue rights issue.
Lewis, who overhauled the
oil services company Amec
Foster Wheeler, has said the
£4.9bn turnover company has
to address “sins of the past”.
No decision has been taken
on Parker’s bonus but
Capita’s remuneration
committee, which is due to
meet imminently, is expected
to strip the 49-year-old of the
G20 leaders
to finalise
crypto
clampdown
Danny Fortson
San Francisco
World leaders will discuss a
crackdown on digital
currency at this week’s G20
meeting in Buenos Aires amid
concern that the crypto craze
is helping to fund terrorism
and launder money.
The number of digital
currencies, which allow
anonymous, electronic
transactions across borders,
has leapt to more than 1,400,
fanning enthusiasm among
buyers but also increasing
anxiety about how they might
be used for nefarious ends.
It is understood that Japan,
scene of the two largest
cryptocurrency thefts to
date, is leading the push for
Under scrutiny: former
Capita boss Andy Parker
bulk or all of his entitlement.
Parker was ousted in March
last year after 17 years with
the company, but did not
leave until September. He was
entitled to a cash bonus
worth as much as 200% of his
£600,000 salary, but the
award is subject to clawback.
Based on working almost
nine months of 2017, that
works out at about £845,000.
“commonsense” regulation.
In January, more than £380m
worth of Nem — at that time
the 10th-largest digital
currency — was taken from
the Tokyo-based exchange
Coincheck. In 2014, Mt Gox,
another Tokyo exchange, lost
bitcoin worth hundreds of
millions of dollars.
Beyond the fear of theft,
policymakers are concerned
that the stateless, anonymous
nature of cryptocurrency
makes it a valuable tool for
sex traffickers, terrorists and
other criminals.
The G20 group of leading
economies plans to examine
the booming sector’s impact
on, “financial stability, tax
evasion and financing illegal
activities”. It said: “Delegates
will consider a common
response that would mitigate
the risks without
discouraging innovation.”
Last week, Google banned
adverts for cryptocurrency.
Bitcoin, the most valuable of
the currencies, plunged by a
fifth on the news.
Parker’s right to receive
another bonus of 69,377
shares could also be
cancelled. The company
declined to comment.
Capita runs contracts
ranging from recruiting
soldiers for the army to
managing call centres for
Tesco Mobile, but has
become bloated from years of
debt-fuelled acquisitions.
Lewis said that this left it “too
complex, driven by a shortterm focus and lacking
operational discipline and
financial flexibility”.
He plans to sell six or seven
businesses worth up to
£700m and issue another
£700m discounted shares, in
order to slash debt levels that
stood at about £1.2bn at the
end of last year. Lewis, a
veteran of the American oil
services giant Halliburton, is
also expected to cut costs by
more than £150m.
Shares in Capita ended last
week at 165.4p, valuing the
outsourcer at £1.1bn.
Russia row
sparks fresh
fears over
gas storage
Simon Duke
Ministers should launch a
review of Britain’s dwindling
gas-storage capacity amid the
escalating diplomatic row
with Russia, according to an
energy industry trade body.
The Energy and Utilities
Alliance (EUA) said the recent
decision to close Centrica’s
Rough facility off the coast of
Yorkshire would leave Britain
more reliant on imports
when temperatures plunge.
Rough, which is being wound
down, accounts for an
estimated 70% of the UK’s
gas-storage capacity — or six
days of winter demand.
“With little gas storage
capability, it makes us more
dependent on imports and at
Stuttgart, Germany, on a
design for the new off-roader
— being built under the
codename Projekt Grenadier.
Yet Ratcliffe, 65, has yet to
decide where to build it. An
ardent Brexiteer, the founder
of the chemicals company
Ineos has long wanted to use
the project to bolster British
industry. Financially, though, it
makes more sense to build the
new vehicle on the Continent.
There is now a shortlist of
five potential sites. Ratcliffe
Newton
gender
pay gap
Rosamund Urwin
The investment house
formerly run by Dame Helena
Morrissey has revealed it pays
its male employees 18% more
on average than female staff.
Newton Investment
Management also said men’s
bonuses were 48% higher
than those for women. At
Newton’s owner BNY Mellon,
men also earn 18% more on
average than women.
Morrissey, who has
campaigned for more women
to be appointed to the
boardroom, was Newton’s
chief executive until 2016.
The data was released as
thousands of businesses with
more than 250 staff scramble
to meet an April 4 deadline
for revealing the earnings gap
between men and women.
Only 2,512 of an estimated
9,000 organisations that are
required to report figures
have so far published them.
greater risk to shocks in the
system,” said Mike Foster,
chief executive of the EUA.
“Getting gas from the
Middle East or Russia is not
without risk. This week’s
events have highlighted the
scale of those potential risks
for the UK and western
Europe as a whole.”
Last year, the government
approved Centrica’s plan to
shut the 32-year-old facility,
arguing that the country had
plentiful supplies from a
number of alternative
sources. However, industry
insiders believe the decision
was misguided.
Rough was “an insurance
policy — a bit of additional
security” against a surge in
gas costs, according to Foster.
“Rough would store gas in the
summer, when it was
arguably at a cheaper price,
and in the winter, when the
demand was higher, they
would take the gas from
storage into the grid. So it
smoothed out prices for
consumers,” he added.
will have to start a factory
from scratch if he decides to
build in the UK, while there
are existing, mothballed,
plants in Germany, Belgium
and France that could
accommodate the project.
Local governments in each of
those countries are offering
substantial grants, loans and
assistance with training in an
attempt to win the project.
Ratcliffe hopes to have the
first cars rolling off the
production line in 2020.
Unilever is preparing the ground for a
series of blockbuster mergers that could
include deals with rivals such as ColgatePalmolive and Estée Lauder, according to
City sources.
In a wholesale restructuring unveiled
last week, including a plan to shift its
headquarters from London to Rotterdam, the consumer goods giant said it
would split into three operational divisions: household products, personal care
and food. The move is designed to facilitate future mega deals, according to company insiders.
The food business, home to brands
including Marmite, could be sold off to
fund other deals, analysts believe. A
number of other possible scenarios are
being examined, however.
Although the court process to push
through the legal changes to the company structure will preoccupy Unilever
for several months, deals could follow
soon after and are likely to be led by a
new chief executive; Paul Polman, the
Dutchman who has led the business for
the past nine years, is expected to leave
imminently.
Unilever sparked controversy last
week with its plans to ditch its AngloDutch corporate structure. Polman — an
ardent critic of Britain’s decision to leave
the EU — insisted it was in no way connected to that, or worries about future
trading arrangements.
Two divisions — household and personal care — will remain in Britain.
The HQ review was a by-product of last
year’s failed £115bn takeover approach
for Unilever from Kraft Heinz. At the
time, Polman remarked that the Netherlands had better protections against foreign takeovers than there are in the UK.
While some observers have suggested
that this protectionist logic lies behind
the planned HQ move, Unilever has proposed to unwind the “Stichting” structure that had been perceived as a blocking vote on any unwanted foreign bid.
Martin Deboo, an analyst at investment bank Jefferies, said he thought the
“strategic endgame” was to sell off its
food and refreshment division, perhaps
to Kraft, and buy Colgate, the $60bn
(£43bn) US toothpaste and soap manufacturer. Unilever could also look to
increase its presence in upmarket beauty
treatments, adding to a division that
already includes Dermalogica and Kate
Somerville.
Speculation that the New York-listed
Estée Lauder would be a good fit also
resurfaced last week.
RACE FOR POLMAN JOB
Unilever division heads will be
jostling for position in the race to
replace chief executive Paul Polman,
who has been in the £10.3m-a-year
role since 2009.
While the company will be looking
externally for a replacement, too,
internal frontrunners have already
been tipped:
Nitin Paranjpe, who has run
Unilever’s home care division since
2013, has been with the company
since 1987.
Well-regarded finance director
Graham Pitkethly is described as
“brilliant”, but “more an enabler for
other CEOs”, by a senior source with
knowledge of the company.
Alan Jope, president for personal
care, is a key candidate. He was
appointed to his post in 2014.
Kees Kruythoff has been president
of Unilever’s North America cluster
since 2011. He has also held senior
roles within the company in Europe,
Africa, Asia and Latin America.
4
The Sunday Times March 18, 2018
BUSINESS
Time is ripe for New York to pounce on LSE
Iain Dey Agenda
S
omething tells me that veteran
City trader Michael Spencer
may be about to flush out an
American takeover bid for the
London Stock Exchange.
Confused? Let me explain.
The former Tory Party
treasurer revealed on Friday
that his electronic-broking business, Nex
Group, had received a bumper takeover
approach from CME, the world’s largest
derivatives exchange. Nex shares flew
30% higher, closing at 874p, partly on
expectations of a counter bid.
It’s a logical suggestion. History tells
us that when stock exchanges and
money brokers start lining up takeover
deals, gatecrashers usually turn up
attempting to spoil the party.
Spencer’s business — formerly part of
his Icap empire — is an attractive
collection of assets from inside the
plumbing of the financial system.
Markit, the data company, could be
interested in parts of it. Deutsche Börse
might take a look. Yet the obvious
counterbid would come from
Intercontinental Exchange (ICE), the
owner of the New York Stock Exchange.
Jeff Sprecher, the ICE boss, is widely
rumoured to be talking to advisers about
his next move. Yet some City sources
suggest that he is increasingly wary of
going toe to toe with CME to bid up the
price of juicy assets.
It’s not clear to me whether he has
given too much thought previously to
buying out Spencer. What we do know,
however, is that he has long coveted the
LSE to create the transatlantic New YorkLondon market that has long been the
stuff of dreams for exchange operators.
Having coralled his advisers in
response to Spencer’s move, Sprecher
seems keen to do something. With the
CME distracted by the Nex deal, and the
LSE still rudderless following the bizarre
boardroom drama of recent months that
led to the departure of Xavier Rolet, now
may be the time to strike.
Breaking up is easy to do
Break up to make up, that’s all we do. So
crooned the Stylistics in their soulful
1973 hit of the same name. Now there’s
something similar going on in the
corporate world. In the past few days
alone, multiple company break-ups have
been announced. Yet, mostly, these
restructurings are laying the foundations
for the mega-mergers of the future;
break-ups designed to make up a part of
something bigger.
Unilever is a case in point. I struggle to
believe the company’s claim that the
Brexit vote was in no way connected to
its decision last week to move its
headquarters to Rotterdam. Yet that is
neither here nor there, in terms of
shareholder value. The point of the
corporate overhaul announced last week
is to prime the company for the next
phase of consolidation among global
consumer companies.
Power is being devolved away from a
corporate centre staffed mostly with
marketing experts to create three
broadly autonomous companies left to
manage their own affairs. Its personal
care business (annual sales £22bn),
household products division (£11bn) and
food operations (£20bn) are all huge
companies already. Yet now that they
are to be set up separately, it will be
Unilever
£46
44
42
40
38
36
M A M J
J A S O N D J F
Source: Thomson Reuters
The London Stock
Exchange is still
rudderless
following a bizarre
boardroom drama
easier for those businesses to get bigger.
Potential acquirers will have a better
sense of the value of each business, and
there would be no complication in
separating any single part from the rest
of the group. Similarly, any company
approached by Unilever will also have a
clearer understanding of who they are
dealing with — as they are dividing their
empires along similar lines.
I expect to see Unilever on the front
foot within the next 12 months. ColgatePalmolive has long been mooted as a
possible partner for some form of tie-up.
Estée Lauder could be another. Even if
nothing happens imminently, cleaning
up the structure should add some bid
premium to Unilever’s shares.
The split announced by Prudential
last week also looks like a break-up-tomake-up deal. Broadly speaking, the
Pru’s fast-growing international
businesses in Asia, America and Africa
are being separated from UK operations.
This is maybe not the last step in the
process, however. The remaining UK
business comprises an asset manager
(M&G) as well as its traditional life
insurance business. Ultimately, both
businesses are likely to be merged with
something or other. M&G would have
any number of suitors, or potential
targets; asset management is
consolidating fast. Rothesay Life has
already bought out part of Pru’s life
assurance business and could take more.
Over time, therefore, Pru UK may be
carved up through a deal that looks like
an exact replica of the split that Standard
Life Aberdeen just pulled off.
Buying and selling businesses has
always been a part of corporate life. Yet
we are at a particular point in the cycle.
Conglomerates are out of fashion. So too
is empire building. And there is a general
suspicion on the part of investors about
everything that seems overly
complicated. Yet raw economies of scale
mean there is still a hunger to get bigger.
Businesses are simplifying what they do,
and becoming ever more specialised, to
seek deals with similarly focused peers.
Odd pseudo-monopolies risk being
formed, but in very narrowly defined
products or industries.
iain.dey@sunday-times.co.uk
In spring a chancellor’s
thoughts turn to tax hikes
Strange bedfellow
for Trump
David Smith Economic Outlook
Irwin Stelzer American Account
O
That fiscal light
at the end of the
tunnel looks
very faint indeed
also, as so often, a need for higher taxes
to balance the books; £18bn of them by
the mid-2020s if the government is to
meet its target of eliminating the budget
deficit (£45bn this year) by then.
That is why the consultations
launched last Tuesday were mainly
about raising revenue. One idea —
significantly lowering the turnover
threshold at which self-employed people
become eligible for VAT from its present
£85,000, in line with suggestions from
the Office of Tax Simplification — could
raise an extra £2bn a year. But it has so
many political pratfalls attached to it
that it will probably never happen.
Another, which would be popular, is
taxing tech giants such as Facebook and
Google on a revenue rather than a profits
basis. This, together with taxing users of
platforms such as Airbnb and eBay,
could bring in more revenue, though it is
unlikely to bring in much more.
The situation we are left with after the
chancellor’s spring statement is one in
which either the target of eventually
balancing the budget will have to be
abandoned, or taxes will have to go up.
Tie it to the government’s determination
to address an NHS funding problem that
it fears will be politically toxic, and
higher taxes would appear to be in
prospect.
An idea that has been knocking
around the cabinet is that of putting up
national insurance (NI) by 1% and
earmarking the funds for the NHS. It
would not quite be a hypothecated tax,
but would lean very much in that
direction. Polls suggest that people are
prepared to pay more tax for a betterfunded NHS, though they also show that
they would prefer somebody else,
preferably the rich, to do so.
A 1% increase in employee NI would
raise £4.9bn a year, just under £100m a
week extra for the NHS. Increasing both
employee and employer NI
contributions would raise £10bn, and
would exactly repeat Gordon Brown’s
trick in 2002. He, much to the
TAX RECEIPTS ARE CLOSE TO HISTORIC HIGHS ...
National accounts taxes
40% of GDP
35
30
Projection
ne of the biggest challenges for
people like me is writing about
budgets. Though in recent
years they have been held on
Wednesdays at 12.30pm, just
after prime minister’s
questions, for a long time they
were on Tuesday, with a
3.30pm kick-off. The gap between a
Tuesday budget and a Sunday
economics column is long.
Now, sympathise with me, if you will,
about the even longer gap between
something that was not even a budget —
Philip Hammond’s spring statement at
12.30pm last Tuesday — and the time you
are reading this.
Fortunately, there is something to say
— what you might call a taxing question.
How much will taxes need to go up to
pay for the public services that voters
want and also provide the Conservatives
with a better electoral platform? And
which taxes might they be?
The scene was set, as so often on
these occasions, by the Institute for
Fiscal Studies (IFS). Paul Johnson, its
director, provided a neat summary of
the pressures on the public finances.
“The fact that even on current plans
debt is not really due to fall is likely to
make the chancellor especially cautious
about opening the spending taps,” he
noted. “Yet the pressures are
undeniable. Many of the public services
are struggling in a way that they were not
two or three years ago. Safety in prisons
is being compromised.
“The NHS is visibly failing to cope as
well as it was. Local government, having
done a remarkable job of coping with
cuts, is showing the strain. The cap on
public sector pay may have been lifted,
but we don’t know where the money to
pay for any increases above 1% will come
from.” A spending review is planned by
the Treasury for next year.
However, the tax side, as Johnson also
noted, is in something of a mess and is
vulnerable. Hammond hoped last year
to tackle the tax gap between the selfemployed and the employed by raising
national insurance but had to admit
defeat and, according to the Office for
Budget Responsibility (OBR), the cost
of these changing patterns of work will
rise from £10bn to £15bn over the next
five years.
Old reliables in the tax system, such as
fuel duty, are being allowed to wither on
the vine. Not only has raising fuel duty
apparently become impossible for any
chancellor — for British politicians,
upsetting the motoring lobby is a bit like
taking on the National Rifle Association
in America — but the switch to
alternative fuels will, in any case, erode
this part of the tax base.
The biggest problem of all lies with
income tax. Raising the personal
allowance, the coalition policy
enthusiastically maintained by this Tory
government, takes increasing numbers
of people out of tax every year. The
result of this is a system even more
skewed towards higher earners. This
year, according to official figures, the top
1% of earners will account for 27.7% of
income tax revenues, with the top 5%
responsible for 48.1%.
Lose some of these high earners,
particularly from the City, to Frankfurt,
Paris and Dublin and we will notice it.
Combine Brexit with a Labour
government led by Jeremy Corbyn and
that trickle of lost revenue would turn
into a flood.
There are, then, some serious issues
about future tax revenues, even though
lately they have held up well. There is
25
1950
1960
1970
1980
1990
2000
2010
2020
Source: IFS
... BUT WON'T ELIMINATE THE BUDGET DEFICIT
Outturn
November forecast
March forecast
10% of GDP
8
6
4
2
0
2005
Sources: ONS, OBR
2007
2009
2011
2013
2015
2017
2019
2021
displeasure of business, raised employer
and employee contributions to put more
money into the NHS. When it comes to
tax there are few new policies, merely
re-runs of old ones.
The lesson of that increase should
give good reason to pause before
repeating it. What started life as a tax
hike “for the NHS” quickly became
absorbed into general revenues and
general spending. All that those who
paid it knew was that they were paying
more tax. Nor did it prevent Labour
bending and eventually breaking its own
fiscal rules.
There is another reason to pause. As
the IFS also pointed out, relative to gross
domestic product, tax revenues have not
been sustained at present levels since
the early 1950s, when the economy was
being demobilised from wartime levels
of tax and spending.
History tells us that we may be close to
the natural limits of what can be
extracted from the economy in terms of
tax. Austerity fatigue, meanwhile, has
kicked in at a time when public spending
is the equivalent of nearly 39% of GDP,
still higher than it was in the years
leading up to the financial crisis.
A chancellor without any easy options
for raising tax, and who looks close to
the limit when it comes to spending
restraint, is a chancellor who may have
no choice but to keep on borrowing.
That fiscal light at the end of the tunnel
Hammond has spoken of looks very
faint indeed.
PS
I don’t know what to make of the
Treasury’s plan to phase out 1p and 2p
coins, what we used to call coppers, now
apparently thwarted by Downing Street
following a popular backlash. I like
coins, particularly shiny new ones, but
even 5p pieces — not accepted in many
machines — can be a bit of a nuisance.
When the 1p coin came into being
with decimalisation in 1971, it had a
purchasing power equivalent to more
than 14p now. So 2p bought the
equivalent of 28p, and those pesky little
5ps were worth not that far short of £1.
The pennies in your pocket, to channel
Harold Wilson, were worth something.
The clamour to keep the penny may
show that we have fallen prey to a
strange kind of nostalgia. Decimal coins
were not greatly loved when they
replaced the old coinage — when 240 old
pennies made up £1 — nearly half a
century ago. A few years ago, the Daily
Mail ran a piece headlined “The day
Britain lost its soul: How decimalisation
signalled the demise of a proudly
independent nation”.
I thought, for the Mail, EU
membership was supposed to have done
that, but never mind. In recent days it
has been leading the charge to keep the
penny. The old penny is long dead, long
live the not-so-new one.
Interestingly, there was very little of
this when another product of
decimalisation, the new halfpenny, was
abolished in 1984, 13 years after it had
been introduced. The halfpenny,
branded as “useless” by the National
Consumer Council, was killed off by
Nigel Lawson, when chancellor, who
declared that “most people would be
glad to get rid of them”.
The value of the halfpenny in 1984,
adjusted for inflation, was equivalent to
between 1.5p and 2p now. Its demise
went unmourned. The last rites for
pennies and tuppences appear to be
some way away.
david.smith@sunday-times.co.uk
M
isery acquaints a man with
strange bedfellows, wrote
Shakespeare. Although the
odds that President Trump
was reminded of that
observation when
re-reading The Tempest
must be regarded as low,
they are somewhat higher that he might
at one time have stumbled across the
modern variant, about politics making
strange bedfellows.
Trump’s misery stems not from any
doubts about his policies. He believes
that his bonfire of the regulations has
released the animal spirits of investors
and the business community, and that
his tax cuts will take the economy’s
growth rate to a level it never achieved in
the Obama years. Alas, he is not getting
the credit he craves and feels he
deserves, which he attributes to poor
“messaging” by his staff.
Enter Larry Kudlow, an economist
whose lack of the usual academic
degrees makes him a great
communicator, most often on business
channel CNBC, and a man who believes
the economy can grow at an annual rate
of 5%, that tax cuts pay for themselves by
stimulating growth and therefore an
increase in tax revenues, who is
unenthusiastic about increases in
interest rates that might slow growth,
and who can explain all of this in clear,
catchy phrases. Just the man the
president needs to replace Gary Cohn as
head of the National Economic Council
(NEC), which is supposed to gather
comments on economic policy and
present all views to the president, along
with a list of his options.
Small problem. When Trump
announced his tariffs on imported steel
and aluminium, Kudlow labelled these
tariffs as taxes on American consumers,
who will have to pay higher prices: “If
ever there was a crisis of logic, this is it
. . . [Trump has] never been good on
trade.” Fortunately, when strange
bedfellows really, really want to cohabit,
a problem like this can be solved. Trump
says of Kudlow: “We don’t agree on
everything, but in this case that’s good.”
Tell that to Rex Tillerson, Steve Bannon
and a host of others who entered the
White House through what they did not
realise was a rapidly revolving door.
On his side, Kudlow has had a
Damascene conversion on the road to
his White House office. He now sees a
virtue in tariffs, especially if the
president is an expert negotiator, like the
man hiring him. Kudlow pointed out to
reporters that Ronald Reagan, one of his
heroes, “felt there were times when
tariffs were appropriate, at least as a
negotiating tool”. Besides, the role of the
NEC is not to make policy but to execute
it. “The way I learned it, with Reagan, is
you present arguments, you put down
options, and once the president makes a
decision, that’s it . . . Once he makes up
his mind, you go out there and do what
he wants.” Add that to the all-time list of
great hostages to fortune.
We can reasonably expect the two
men will come together on several
policy issues. Kudlow, who helped draft
the first round of tax cuts, agrees with
his new boss that a second round of
corporate tax cuts would be good for the
economy. There is some logic to that. It
seems that the 4.1% unemployment rate
does not mean that we have a fully
employed economy. Last month,
although the economy created 313,000
jobs, the unemployment rate did not fall
because tens of thousands of workers got
off their couches and re-entered the
labour force. So there is room for more
growth, perhaps to Kudlow’s 5% target,
which a second tax cut might just
produce in the near term, and inflation
thereafter. But explaining why rising
fiscal deficits and consumer incomes will
not also increase imports and the hated
trade deficit will tax Kudlow’s
“messaging” skills.
They both agree that we must launch
a trade war with China to end its unfair
trade practices. Trump wants Xi Jinping,
whom he much admires, to suggest how
China can reduce our trade deficit with
his country by $100bn a year, or more
than 25%. When that doesn’t happen, he
plans to levy $60bn in tariffs on Chinese
goods, mostly hi-tech and telecoms
items, perhaps as early as this week.
If he does initiate such a war — more
precisely, if he responds to the war
Kudlow labelled
the tariffs as taxes
on American
consumers
China has been waging for decades — our
commander-in-chief will find it a public
relations benefit to have TV-compatible
Kudlow, with a reputation as a reluctant
trade warrior, as communicator-in-chief.
The president will also find Kudlow
useful as the negotiations over renewal
of the North American Free Trade
Agreement reach their climax. The
negotiating teams of all three parties
seem stuck in concrete, and Trump on
the verge of pulling out.
Kudlow, having said withdrawal from
Nafta would be a “calamitously bad
decision”, might try to explain to the
president that the “deficit” he says we
have in our trade with Canada exists
only in the trade in goods ($23.2bn). Add
in our $25.9bn surplus in trade in
services (financial, insurance, technical
consulting) and we have an overall
surplus of $2.7bn.
Perhaps best to let sleeping
misrepresentations lie. The president
and Canada’s prime minister, Justin
Trudeau, are quietly negotiating over the
heads of their trade representatives, and
should reach an agreement. Mexico will
have no choice but to go along with it.
Kudlow is now saying that the
“upholstery” of Nafta needs
refurbishing, a vague enough position to
allow him to reassure the investment
community that whatever deal is
reached it will not “calamitously”
disrupt the international supply chain.
Right now, both these strange
bedfellows have a stake in making this
marriage work. But Trump is not famous
for a history of enduring relationships.
irwin@irwinstelzer.com
Irwin Stelzer is a business adviser
5
The Sunday Times March 18, 2018
BUSINESS
Heathrow: the cash machine
with an airport attached
ILLUSTRATION:
JAMES COWEN
Should airlines and passengers face sky-high charges
for using the west London hub, asks John Collingridge
T
he bosses of some of the
world’s
biggest
airlines
received a strange request last
year from Heathrow airport —
it wanted to spend £74,000 to
chop down three trees. A little
research suggested that the
quoted price was up to 20
times what a tree surgeon
would normally charge for
the simple task, if the trees were located
elsewhere. Yet this type of scenario has
become commonplace at Europe’s biggest airport, carriers claim.
Under a complex — and some say perverse — incentive system, the west London hub is encouraged to spend as much
as it can on developing the site. Heathrow’s investors earn a return based on
the size of its regulatory asset base (RAB),
under a formula set by the Civil Aviation
Authority (CAA).
The more Heathrow spends, the more
its owners can earn. That investment is
recouped through passenger charges,
with about £20 added to the ticket price
for each traveller who arrives or departs.
Those charges are among the most
expensive of any airport in the world.
With Heathrow chosen as the site of
the much-needed extra runway in southeast England, airlines fear the airport will
raise the passenger levy to help pay for
the multibillion-pound project. They
have cause to worry: there are big question marks over the efficiency, governance and transparency of the management. Meanwhile, the airport
is demanding an insurance policy against the risk that the
project goes wrong. It wants
the CAA to ensure it will be
compensated by airlines
and passengers for any
unexpected problems —
anything from construction delays to the possibility that passenger
numbers, and therefore
revenues from the third
runway, fall short of forecasts.
Heathrow claims its £10bn
revamp over the past decade,
with the opening of two new terminals, proves it can be trusted to
handle what will be one of the world’s
biggest privately funded developments.
A public consultation on the runway
expansion finishes on March 28. The airport has tried to address carriers’ fears by
cutting the cost of the project by £2.5bn
to £14bn.
Yet scrutiny of the operator’s spending
has been remarkably scant. There is no
audit of the RAB, to show how the figure
of £15.8bn is calculated — particularly
what assets go into it, and what has come
out of it. Nor has Heathrow provided a
detailed cost breakdown for the additional runway.
A string of previous projects, which
were priced at eye-watering levels or ballooned in cost, cast doubt over whether
Heathrow will deliver the mammoth
project efficiently. In 2010, the airport
started work on a 3,320-space multi-storey car park at Terminal 2. The agreed
cost, to be clawed back via passenger
charges, was £202.7m. At that price, each
space cost more than £61,000 — more
than four times the typical amount. Gatwick airport built a 1,177-space car park in
2011 for £17m, about £14,400 per space.
Bristol airport is spending £9.5m on a
facility with more than 1,000 spaces.
A report last year
by Cambridge Economic
Policy Associates for the CAA
scrutinised Heathrow’s spending during its latest regulatory
period. The findings were damning.
While there is pressure for Heathrow
to keep within budget, “what is less clear
is whether the portfolio will also deliver
value for money”, said the report. It cited
a smoking shelter at Terminal 2, which
was priced at £450,000 and ended up
costing £1m.
The Cambridge report also said British
Airways installed automated bag-drop
units in Terminal 5 at a cost of £40,000
each, compared with Heathrow’s quoted
price of £150,000 for each unit.
British Airways’ owner, IAG, has long
complained that Heathrow invests inefficiently. As the airport’s biggest user, it has
good reason to keep an eye on costs.
Willie Walsh, IAG’s chief executive, railed
against a new baggage system at Terminal 3, originally priced at £234m and
due to be completed in 2011, which
ended up costing £435m and arrived
five years late.
“There is no incentive to get the
best deal from suppliers, or even
to deliver projects on time,” said
Walsh, who wants passenger
charges to be capped at the current level. “Heathrow can charge
monopoly prices because the
CAA lets it get away with it.”
There are claims of conflicts of
interest at the airport, too. The
Spanish construction giant Ferrovial, which led the £16.3bn buyout
of the former airports monopoly
BAA in 2006, is one the biggest contractors employed by Heathrow.
It has sold some of its shares since
the buyout, yet remains the biggest
investor with a 25% stake. Along with
Laing O’Rourke, its subsidiary Ferrovial
Agroman won the main Terminal 2 construction contract in 2010. The consultant Amey, also owned by Ferrovial, has
handled a string of projects at the airport,
such as runway lighting.
Heathrow refuses to disclose how
much work is done by Ferrovial subsidiaries. Accounts for Ferrovial Agroman
disclose work done at Heathrow only for
the 2014-2016 period, during which time
it billed the airport for almost £200m.
One infrastructure investor said:
“Heathrow has been a feeding frenzy for
15 years. For Ferrovial to own the airport
and run a huge construction programme
is an enormous conflict of interest. It beg-
HAPPY LANDINGS: THE
AIRPORT IN NUMBERS
£74,000 £20
The cost of chopping down three
trees at Heathrow — 20 times what
a tree surgeon would typically charge
WHO HAS A
SEAT IN THE
COCKPIT?
The amount added to charges
for each passenger — among the most
expensive of any airport in the world
Heathrow’s £16.3bn takeover
in 2006 saw Spain’s
transport giant Ferrovial
trump an American bid
led by Goldman Sachs.
The winning offer paid
£10.1bn for Heathrow’s
shares, with much of the
balance comprising debt.
Since then, Ferrovial has
gradually sold down its initial
62% stake, to leave it with
£61,000
The cost of each parking bay at a
multi-storey car park in Terminal 2 —
over four times the typical amount
25%, with a spectrum of
international investors
holding the balance.
Canadian pensions giant
Caisse de dépôt et
placement du Québec
(CDPQ), which was in the
initial consortium, has
shrunk its stake to 12.6%,
and Singaporean investment
fund GIC has 11.2%.
America’s Alinda Capital
Partners has 11.2%, China
Investment Corporation
owns 10% and British
academics’ retirement fund
Universities Superannuation
Scheme also owns 10%.
The Qatar Investment
Authority has 20%.
Fellow state-owned sister
company Qatar Airways
also has a 20% stake in
British Airways.
gars belief that there’s been
no scrutiny.”
Heathrow said: “These claims are
entirely baseless. Being closely regulated
by the CAA means that any investment in
the airport is rigorously scrutinised by
our own teams, our airlines, independent surveyors and our regulator. All suppliers are chosen through competitive
tender, and the CAA considers the rates
we have achieved to be extremely competitive.”
Yet a report buried on the CAA’s website gives a critique of Heathrow’s efficiency versus other international airports. The comparison of a number of
leading hubs by PA Consulting showed
that Heathrow spends £15.78 per passenger on operations. Only Tokyo’s Narita
airport spends more. Earnings per passenger are well above all its peers, too,
except for Hong Kong.
The report also revealed a high ratio of
staff to passengers at Heathrow, the third
highest behind Manchester and Dublin.
“Efficient utilisation of staff and market-
based pay and benefits
packages are areas that warrant
continuing study,” it said.
Yet for all Heathrow’s apparent inefficiency, financial returns have flowed
freely since the Ferrovial takeover. After
an initial period when lenders insisted on
lock-up clauses, dividends surged. Last
year, the airport paid £525m to its largely
foreign owners, which include Qatari,
Chinese and Singaporean sovereign
wealth funds. In total, it has handed them
more than £3bn in dividends since the
takeover.
This has come at the expense of the
balance sheet. Shareholder equity has
shrunk, making it one of the most overstretched infrastructure businesses. The
highly geared utility Thames Water has
leverage of 81.5%, and is under pressure
to reduce it. Heathrow, however, has
debt of £13.7bn and a £15.8bn asset base —
giving it gearing of 87%. This is despite
the multibillion-pound sales of Gatwick,
Stansted, Glasgow and Southampton airports in recent years, forced on BAA by
the aviation watchdog.
Unlike other regulators, the CAA does
not impose a cap on debt. Heathrow says
gearing could climb above 90%.
That could affect the airport’s ability to
raise funds for the runway. The consultancy PwC reckons Heathrow would have
to issue £3bn to £6bn of bonds a year for
much of the 2020s. That would swamp
the market for sterling bonds.
Transparency
at the airport is muddied by the complexity
of its ownership. About 10
layers of holding companies sit
above Heathrow Airport Ltd,
which is licensed by the CAA. Debt is
held against numerous companies.
Airlines including BA and Virgin
believe the only way to prevent costs spiralling out of control is to open up construction of the third runway to competition. Surinder Arora, who owns five
hotels in the area, has submitted a proposal to build and operate the third runway at a substantially cheaper cost.
The tycoon is working with the American construction group Bechtel on the
plan, which envisages independently run
terminals. Another alternative, under the
name Heathrow Hub, wants to stretch
and split the northern runway rather
than building a third strip.
Chris Grayling, the transport secretary, said last month: “The CAA does
have real teeth to make sure this is value
for money.” Yet the regulator’s ability to
enforce competition is limited. The
break-up of BAA — forced by the Competition Commission — was aimed at promoting rivalry between airports. The commission recommended legislation that
would allow for “separate development
and ownership of terminals”.
Those powers are limited by one crucial factor. Andrew Haines, the CAA’s
chief executive, told MPs last month:
“The legislation is there to allow for competition, but it requires Heathrow’s consent. Neither the secretary of state nor
the regulator has the powers; only the
Competition & Markets Authority.”
There is one option open to the regulator that would be hugely unpopular with
shareholders. The CAA could cap Heathrow’s dividends if debt climbs too high,
forcing the airport to divert funds into
construction. Industry insiders point to
the example of Nats, the part-privatised
air traffic company. In 2012, the CAA
imposed a gearing cap of 65%. If debt
climbs above this level, Nats is banned
from paying dividends.
That would leave shareholders with a
stark choice of whether to invest in the
runway. Without the cap, the Heathrow
cash machine will keep on giving.
6
The Sunday Times March 18, 2018
BUSINESS
Conviviality’s
one too many
for the road
A shock £30m tax bill has left the drinks
retailer with a hangover from which it will
be hard to recover, reports Simon Duke
A
n email landed in the inbox
of some of the City’s top fund
managers 10 days ago. The
message predicted a glittering future for a business that
had transformed itself from
a lowly Cheshire off-licence
into Britain’s largest purveyor of wines, spirits and
beer.
In a 22-page note, Investec analyst Kate
Calvert explained why shareholders
should load up on Conviviality, the
owner of the Bargain Booze and Wine
Rack chains. Its “one-stop proposition is
resonating with consumers”, she wrote,
before predicting that the shares would
soar by 55% to 455p apiece.
In a matter of hours, her breezy optimism had been demolished. That afternoon, Conviviality served up a superstrength profit warning that has left the
former stock market darling fighting for
its life.
Diana Hunter, its hard-driving chief
executive, revealed that there had been a
“material error” in its financial forecasts,
which would reduce its predicted earnings by more than £5m. Profit margins
had lost some of their fizz and would also
undershoot expectations, added the
50-year-old former Waitrose executive.
The grim update wiped more than
£300m — or 60% — off the value of Conviviality. It proved to be a harbinger of
more pain to come.
Last Tuesday, Hunter lowered earnings guidance again, and admitted there
had been an “arithmetic error” in its forecasts. In other words, someone in its
finance department had typed the wrong
number into a spreadsheet, or substituted a plus for a minus sign. The following morning, Conviviality made another
shocking revelation. It had uncovered an
unforeseen £30m tax bill, which had to
be paid by the end of the month. It suspended trading in its shares, and, in a
desperate attempt to preserve cash, axed
its dividend. On Friday, it admitted it was
exploring an emergency cash call.
This weekend, Conviviality’s advisers,
including bankers at Investec and consultants from PwC, are locked in discussions over a bailout. It is looking to raise
more than £100m to shore up its balance
sheet. However, with the credibility of its
management and board in tatters, shareholders may balk at pouring in more
money. Since the float in 2013, investors
have backed Hunter with more than
£250m. In her hands, Conviviality has
been transformed into an acquisition
machine. She has swooped on a range of
smaller rivals, and swallowed up Matthew Clark, Britain’s biggest independent
alcohol wholesaler. But Hunter appears
to have lost control of her empire.
Sources said investors were likely to
back a new fundraising — but only
because the alternative was so unpalatable. If they refuse to commit more money
to Conviviality, their shares could
become worthless. They are expected to
demand a high price for their support.
Hunter is expected to stand down
early this week, but may stay on in a consultancy role. Chairman David Adams, a
former director of HMV, Jessops and
House of Fraser, is expected to survive —
for now. In time, he is likely to be forced
out, along with other directors and senior management. “No one is safe. A chief
executive just has to know when a tax bill
of that size comes due. It’s absolutely fundamental,” said one City banker. Hunter
and the company declined to comment.
Bargain Booze, the kernel of Conviviality’s empire, traces its roots back to 1980,
when a twentysomething entrepreneur,
Allan Whittle, opened a store in Sandbach, Cheshire, renting videos and selling beer. His friend Robert Mayor, an
accountant, later sold his house and
joined the business as a partner.
Over the following two decades, the
Conviviality
500p
400
300
200
100
2014
2015
2016
Source: Thomson Reuters
2017
pair built Bargain Booze into a 165-strong
chain of no-frills off-licences, predominantly in northwest England. In 2000,
they sold out to BWG, a wholesaler
owned by French spirits giant Pernod
Ricard. A decade later, Bargain Booze
was sold to Electra Partners, which
flipped it to rival private equity firm ECI
Partners in 2006.
In 2013, ECI hired Hunter as chief executive to prepare the company for a float.
She was a star capture, having cut her
teeth at Sainsbury’s before running Waitrose’s convenience stores. Former colleagues describe her as “very driven” and
“unbelievably confident”. “Diana is
relentlessly bullish, she’s always looking
at the positive,” said one adviser.
It was this quality that helped her persuade investors to back Conviviality. The
company was no easy sell. Off-licences
had struggled in the aftermath of the
financial crisis — Threshers and Oddbins
went bust. Her plan was to take the Bargain Booze model nationwide, hoping to
emulate the success of Aldi and Lidl.
In late 2013, Conviviality went public.
ECI offloaded all its shares, later boasting
it had made a profit equivalent to 4½
times its original investment. Shareholders, including blue-chip fund managers,
such as Fidelity and Old Mutual, paid
nearly £67m to take control.
Hunter was soon on the acquisitions
trail, clinching a deal for Wine Rack
within weeks of the float. She followed
that up with the takeovers of Rhythm &
Booze, a 26-strong off-licence chain in
Yorkshire, and the £6m purchase of Midlands-based convenience store chain GT
News. “There’s no question that the strategy was the right one. Diana knew where
she wanted to go, and wanted to get there
quickly,” said a senior City source.
In 2015, Hunter pounced on Matthew
Clark, a 200-year-old wholesaler controlled by Punch Taverns. For Hunter,
who had been chief executive for little
more than two years, it was a high-stakes
gamble. Matthew Clark had supplied
nearly 20,000 restaurants, pubs and offlicences, but at £200m, the business she
was buying dwarfed Conviviality.
However, shareholders liked her ambition, and stumped up £130m, with the
company borrowing a further £80m. In
May 2016, she launched a £60m raid on
another wholesaler, Bibendum. Shareholders contributed £40m to that deal.
Last December, she raised a further
£30m from the market to buy a small
chain of convenience stores from collapsed distributor Palmer & Harvey.
The rash of dealmaking boosted turnover and profits, and pushed Conviviality’s market value above £500m. However, Hunter’s spree saddled the
Ambitious:
Conviviality
chief executive
Diana Hunter
company with more than £100m of debt,
and left it struggling to absorb the disparate business assembled by Hunter, who
was paid £966,000 last year. The board
conducted a review of the “effectiveness
of the group’s system of internal controls” last year, according to its annual
report. However, it opted against creating a new “internal audit function” after
judging that the safeguards were “appropriate”. That decision may not have been
unanimous. Jennifer Laing, 70, a veteran
advertising executive, resigned as a nonexecutive director last April, the final day
of the company’s financial year, just 11
months after joining the board. She cited
“personal reasons” for her departure,
but she has yet to resign from Mr Kipling
owner Premier Foods.
Given the fiasco of the past fortnight,
the Conviviality board looks destined to
be cleared out over time. For now,
though, the company must wring more
cash out of investors to ease the concerns
of its lenders, suppliers and credit insurers. “Conviviality has a viable business
model, but it’s caught in a liquidity trap.
The internal controls and processes have
been found wanting, but it’s fixable,” said
Phil Carroll, a retail analyst at Shore Capital. “The question now is whether shareholders would want to back management
with another cash injection. “
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7
The Sunday Times March 18, 2018
BUSINESS
TOM STOCKILL
The royal wedding
will bring families
together — for a
Domino’s pizza,
hopes the firm’s
boss David Wild
INTERVIEW
SABAH
MEDDINGS
T
en minutes into my tour of
Domino’s pizza shop in Chiswick, west London, an angry
bleeping erupts from a
nearby speaker. Staff are startled into action. It’s just after
1.30pm, and an order has
been made for a Buffalo
Chicken pizza — with potato
wedges on the side. In under a
minute the pizza is in the oven. It should
be with the customer within half an hour.
It is areas such as the leafy suburb of
Chiswick that are at the centre of the pizza
chain’s grand plan. Domino’s has
so far struggled to increase its hold on
the capital — a situation David Wild, the
crinkly-eyed retail veteran at the head of
the chain, wants to change. “We know it’s
not right,” says Wild, after rattling off
a list of areas — Barnes, Hammersmith,
St John’s Wood — where well-heeled locals
do not have a nearby Domino’s shop.
Unusually for Wild, he’s wearing a tie
when we meet to discuss why he thinks
the nation loves pizza so much that they
want another 550 stores. He’s paused a
day of investor meetings for a bite to eat
(pizza, obviously) and is mid-way
through his first slice of Pepperoni Passion — his favourite — when I ask why he’s
so confident that Brits are desperate for
another Ham and Pineapple or Mighty
Meaty.
“People love Domino’s”, he insists,
adding that Valentine’s Day is one of the
firm’s busiest days of the year. On that
overpriced day in particular, couples —
especially in Scotland, apparently — are
ordering a takeaway to avoid busy restaurants. “If you have a Domino’s at home,
who knows where it might lead?” he
adds, raising his eyebrows before laughing for a little too long. “Sorry, I’ll be in
trouble for that.”
Wild is right about one thing: Brits are
ordering more pizza. Sales of Domino’s in
the UK rose above £1bn for the first time
last year, as Domino’s Pizza Group, the
FTSE 250 company that owns the master
franchise for its American parent in the
UK, Ireland and Switzerland, opened a
further 95 stores. Three quarters of these
sales were made through digital channels
— online and through the company’s
smartphone app. Revenues rose to
£474.6m last year, up from £360.6m in
2016. The company is now worth £1.6bn.
The X Factor, Strictly Come Dancing,
and yesterday’s Six Nations rugby match
between England and Ireland are all
moments when Wild wants families to be
tucking in. The royal wedding is expected
to be among the busiest days of 2018,
according to data from Domino’s.
Today, there are 1,045 outlets in the
UK, mainly run by franchise partners, as
well as sites in Norway, Iceland, Sweden
and Switzerland. In London, however,
Domino’s has taken matters into its own
hands, inking a partnership with the largest franchisee in the city — paying £24m
to take a 75% stake in the group of 25
stores.
London represents 25% of the UK’s
delivered food market, according to
Wild, but just 14% of Domino’s sales.
“London is probably the biggest area of
opportunity we have in terms of store
growth,” he says.
Management speak and corporate jargon are smeared across Wild’s conversation like the tomato sauce on one of his
pizzas. It is only when his guard drops,
and his awkward laugh erupts, that a hint
of his personality shines through.
Wild has worked in retail for more
than 40 years. He grew up above his par-
On a plate:
Domino’s
boss David
Wild says
families are
key to the
company’s
expansion
The Tesco old hand who’s
ready with a Mighty Meaty
ents’ newsagents’ in Manchester, leaving
to read chemistry at Oxford. After graduating in 1976, his first job was as a marketing trainee in the foods division of Rank
Hovis McDougall.
He moved to Tesco in 1985, where he
spent 10 years in buying, before building
the retailer’s international business in
continental Europe. He then spent two
years as group supply chain director.
Rumour has it that he fancied himself
as a successor to chief executive Sir Terry
Leahy. After that job went to Phil Clarke,
Wild ended an 18-year spell with the
supermarket chain to join rival Wal-Mart
— with a remit to fix its German business.
In the end, Wal-Mart chose to sell instead.
He was approached for the top job at
Morrisons, but missed out. Then, after a
brief stint in California with Wal-Mart, he
was coaxed back to the UK in 2008 to be
chief executive of Halfords, the car parts
retailer. His tenure ended abruptly after
four years, following a string of profit
warnings. What went wrong?
“I wanted to change the business more
quickly than it was ready to be changed,”
says Wild, his genial manner slipping
slightly for the first time. “I wanted to
invest more in the growing area of the
business,” he says, before adding: “I
don’t want to go into more detail. I think
it’s in the past. I learnt a lot.”
Wild’s introduction to Domino’s was as
a non-executive director in November
2013. The pizza chain was losing money
“big time” in its German operations, and
wanted to lean on his experience in the
country. Months later, when the chain’s
then chief executive Lance Batchelor left
to join Saga, Wild stepped in to help on an
interim basis. Within six weeks, he had
made his new job permanent. It has
proved a lucrative position: in 2016 he
Made in
Hong Kong,
Li conquered
the world
One of the first Chinese tycoons in the
former colony, Li Ka-shing created a
global empire from ports to property
to telecoms, reports Michael Sheridan
took home £4.5m in pay, bonuses and
share payments.
His tenure has not been without hiccups. He has a “hard-man” reputation,
though insists he’s a “pussycat” before
erupting into another cackle. “People
always know where they stand with me.
I’m not one for setting soft targets.”
He was forced to defend the corporate
culture of Domino’s in late 2015 when the
chain lost its second finance chief in 10
months. Paul Doughty, who had joined
Domino’s only in June of that year, left at
the end of December. Relations between
the pair were said to have soured so badly
that they were barely speaking to each
other. Wild’s take is more measured: “I
don’t think it was anything to do with me,
he just didn’t enjoy Domino’s.”
Doughty’s exit came after his predecessor, Sean Wilkins, resigned with
immediate effect after just 14 months.
The company has now “learnt a lot
about what sort of people fit into Domino’s and what sort of people don’t”,
according to Wild. “It’s not an environment to come into if you want everything
nicely tied up with a bow on top.” Franchisees are demanding, often wanting
help via phone and emails. “You have to
have a high degree of flexibility.”
It took some time, and tens of millions
of pounds in write-downs, to fix the German problem. His solution was to secure
a joint venture with the brand’s Australian franchise holder, which also holds
the rights for France, Belgium and the
Netherlands. There is persistent speculation that the Australians may try to buy
out Domino’s in the UK, too. “I think it’s
very unlikely that Domino’s Inc would
want a single entity running all of those
countries,” says Wild.
Another headache left from his prede-
In Hong Kong they call him
Superman. And last week Li
Ka-shing announced he was
hanging up his cape at the age
of 89, having built a business
empire around the world.
Li, who arrived in the then
British colony as a refugee
from war-ravaged China,
became one of the richest
tycoons in Hong Kong with a
fortune estimated at $34bn
(£24.4bn).
He has also been one of the
biggest — if the not the biggest
— overseas investors in the
UK, owning the Three mobile
phone network; Hutchison
ports at Harwich, Felixstowe
and Thamesport; residential
towers on the Thames at
Chelsea Waterfront; the
utilities West & Wales and
Northumbrian Water; and the
retail chain Superdrug.
A British citizen with a
knighthood to boot, Li has
kept a home in St James’s, in
central London. Cambridge is
one of the many universities
that have benefited from the
billions of dollars he has
given to good causes.
Despite the trappings of
wealth, he enjoys a simple
lifestyle, teeing-off every day
with a game of golf at 6am.
Li had the nous to see big
economic changes coming,,
transferring his interests from
manufacturing to real estate,
then seizing opportunities in
technology and
infrastructure.
His second talent was a
chameleon’s ability to
prosper under British
colonialists and Chinese
communists alike, navigating
the shoals of politics with a
self-effacing style and the best
advice that money could buy.
He bowed out with typical
modesty, handing over a
conglomerate worth some
$100bn to the stewardship of
his elder son, Victor, 53.
Reporters lined up for
selfies with the patriarch in
the headquarters of Cheung
Kong, his flagship company, a
skyscraper standing between
the Bank of China and the
former residence of British
governors.
“Looking back all these
years, it’s my honour to have
founded Cheung Kong and to
have served society,” Li said.
“A lot of people will be
tempted to see this as the end
of an era, but that is a long
way from the truth,” said
Stuart Gulliver, former chief
executive of HSBC. “He wants
these businesses to be around
in 100 years.”
The succession plan is long
cessors is the possibility of a £36.5m tax
bill relating to unpaid taxes from when
Domino’s used offshore trusts to pay
some executive bonuses between 2003
and 2010. HMRC has not requested a payment, but Domino’s has recorded a provision of £11m.
Domino’s began to grow in popularity
in the UK at the turn of the century, partly
through its sponsorship of the cartoon
show The Simpsons. Much has changed
since. Prime TV ad spots are less widely
available, and the competitive market
has altered beyond recognition. The days
of families relying on a couple of dogeared takeaway menus pinned to a cork
board in the kitchen are over.
Deliveroo, Just Eat and Uber Eats are
all piling millions of pounds into slick
delivery operations. It also means that
local, family delivery shops can compete
against big corporate marketing budgets.
Domino’s has had to up its game.
Today, it is rolling out GPS technology for
drivers, allowing customers to track their
order. It also means store managers can
plan ahead — sending out “runners” to
meet drivers on the street. Saving three
or four minutes on every order will help
with labour costs, too, Wild claims —
because while Brexit has driven up the
cost of goods, those in hospitality also
need to find staff. Here he is bullish. “The
good news about our business is we can
afford to pay attractive rates [to store
managers].” He declines to reveal how
much, but claims drivers are paid
10%-15% above the national living wage.
Franchisees also enjoy the buying
power of a bigger group. Did Wild’s background at Tesco help him drive a hard
bargain? “I couldn’t possibly comment,”
he adds, in another explosion of laughter.
With a low-cost product such as pizza,
Domino’s can afford to discount. Some
87% of orders in 2017 were on a promotion, with an average discount of 38%.
“We’re very big on meal deals,” he says,
before drifting back into corporate
speak: “We’re trying to sell family meal
solutions.”
He’s clearly hoping those families in
Chiswick have not yet had their fill of
pizza.
THE LIFE OF DAVID WILD
VITAL STATISTICS
Born: May 19, 1955
Status: married, four
children, one grandchild
School: William Hulme’s
Grammar, Manchester
University: read chemistry
at Oxford
First job: helping in parents’
newsagents’
Pay: £1.6m including salary,
bonus and long-term
incentive payments
Car: Audi A8
Homes: Chipping Norton,
Oxfordshire, and St John’s
Wood, northwest London
Favourite book: Tinker,
Tailor, Soldier, Spy, by
John le Carré
‘Superman’: Li Ka-shing
in place and guarantees a
stable inheritance, rare
among the capricious titans
of Hong Kong. It also
conformed to Confucian
ideals by ensuring a hallowed
place for the founder as both
sage and philanthropist.
In addition to his acumen,
Li is respected in China for
setting up a charitable
foundation that has built
universities, schools and
hospitals in his homeland.
His story has also been the
history of modern China.
Born in 1928 in the coastal
city then known as Teochew,
his formal education ended
Film: The Deer Hunter
Music: André Rieu and his
Johann Strauss Orchestra
Gadget: iPad
Last holiday: Cape Town
Charity: Teenage Cancer
Trust
WORKING DAY
David Wild is up at 6am for
the drive from his home in
the Cotswolds to Domino’s
head office in Milton
Keynes.
Three days a week he
visits franchisees, spending
time with team members
and customers. He often
travels to overseas
businesses or to London.
when the Imperial Japanese
Army rampaged through the
southern provinces.
In 1940, Li fled to Hong
Kong, which fell to the
Japanese the following year.
His schoolmaster father died
of tuberculosis and Li worked
in menial factory jobs to help
the family survive.
He never lost the Teochew
dialect and kept his taste for
its subtle food, while the
commercial skills of its
traders and fishermen ran in
his blood. After the war, he
started a factory making
plastic flowers, profiting as
Asia rebuilt and Hong Kong
made itself into a workshop
for the world.
Li was quick to spot the
end of the manufacturing
boom as costs rose and
competition grew. He had
already bought the lease on
his factory. He abandoned
plastics and invested in real
estate, even amid proCommunist riots in 1967,
mindful of the dictum that
the time to buy is when there
is blood in the streets.
In 1979, Li turned to the
institution that epitomised
British supremacy, the
Hongkong and Shanghai
Banking Corporation, today’s
HSBC, to buy its stake in
“If I’m in London I prefer
to move around using
public transport, rather
than have a chauffeur drive
me around,” he says.
Wild clocks off at about
6pm, unless he has an
evening engagement.
Classic film: The Deer Hunter
Hutchison Whampoa, one of
the colony’s British trading
houses. He was one of a breed
of “local” tycoons who
created a new establishment.
It also brought him to the
notice of the Communist
party leadership in Beijing.
When Deng Xiaoping began
“reform and opening up”
after 1979, Li was soon
interlocutor, investor and
counsellor.
Li never abandoned his
base in Hong Kong but his
true perspective was global —
“seeking the blue ocean and
not the Yellow River” as a
Chinese documentary of the
reform era had it.
Li’s steady cash flow from
Hong Kong allowed him to
diversify globally during two
decades of expansion.
For all its reputation as a
beacon of free enterprise,
Hong Kong’s local economy
was rigged to benefit the big
players — and Li got a
reputation for ruthlessly
squeezing out competition.
The group acquired ports,
telecoms firms, energy assets
and technology ventures.
Its chief was both
opportunist and visionary. In
1999, he made a $15bn profit
on the sale of his Orange
mobile phone network in
DOWNTIME
A life-long supporter of
Manchester United, the
chief executive of Domino’s
often watches them play at
the weekend. He also
enjoys spending time with
his family and going to the
theatre.
To keep fit, he often goes
swimming or walking.
Britain to Mannesmann of
Germany. He was also an
early investor in Facebook
and Spotify through his
private investment vehicle,
Horizons Ventures; while
Hutchison forged into
biotechnology.
Li’s third act was an astute
piece of corporate
engineering in 2015 that split
the group’s property holdings
from its other assets,
removing at a stroke the
discount applied by the
market to shares in
conglomerates. He remained
chairman of the main
company, CK Hutchison
Holdings and of CK Asset
Holdings, the property arm,
and will stay an adviser.
In recent years, Li lost some
of his gloss among “patriotic”
young Chinese because he
rebalanced his investments
out of China just as its leader,
Xi Jinping, restored the
supremacy of the Communist
Party. Li remained a staunch
patriot and insisted that only
sound investment criteria
governed his decisions.
He belongs to the China
that sought the blue ocean
rather than the slow-moving
Yellow River. While it is too
soon to write his epitaph,
that might do one day.
8
The Sunday Times March 18, 2018
BUSINESS
Who speaks for business?
TOM STOCKILL
In the wake of the
Brexit vote and the
turmoil at the IoD,
the influence of
lobbyists is in the
spotlight, writes
Tommy Stubbington
Paul Drechsler,
CBI president,
says Britain
must speed up
the economy
and ‘give
investors
the certainty
they need’
M
ind Your Own Business,
thundered the title of a
pamphlet published by
the Institute of Directors
during the 1959 general
election
campaign.
Inside, the bosses’ lobby
group listed 600 firms it
claimed would be taken
into public ownership
under Labour’s promise to nationalise
businesses that had “failed the nation”.
The scare campaign worked — at least
according to then shadow chancellor
Harold Wilson, who later blamed the IoD
for Labour’s polling day defeat.
How times change. Recently, the 115year-old business club appears too busy
waging war on itself to sway elections.
The defenestration of chairwoman
Barbara Judge this month over allegations of bullying and racist remarks
(which she strongly denies) has led to red
faces at the IoD, which frequently lectures firms on corporate governance.
Yet the internal battle hints at a
broader problem. Britain’s business
groups are struggling to exert the kind of
influence they did in decades gone by.
The divisive forces of Brexit, coupled
with the general public’s disillusionment
with big business, have queered the pitch
for anyone supporting even the most
basic case for market economics.
Frequent interventions in the Brexit
debate have led to charges of “remoaning” on the part of the CBI in particular,
the biggest business lobby group — dismissed by many Brexiteers as the provisional wing of Project Fear. Even when it
puts forward reams of data and survey
evidence to support its points, the CBI
comes under attack for solely representing the vested interests of banks and multinational corporations.
With the threat of a Corbyn government lurking in the background, a crucial
question risks going unanswered: who
can speak for business?
“No other issue we’ve engaged with in
my nearly three years here has brought
out the hostility and sensitivity that
Brexit has,” said CBI president Paul
Drechsler. “Nothing touches it.”
Drechsler said it is “10 times” more difficult for the organisation to get its message across in the post-referendum environment.
Under the leadership of former McKinsey consultant Carolyn Fairbairn, the CBI
campaigned aggressively for Britain to
stay in the EU. Since the referendum, it
has pushed for a “soft” Brexit, successfully lobbying for a two-year transition
period and calling for a permanent customs union with the EU. Its argument is
that frictionless trade with the bloc far
outweighs the putative benefits of new
trade agreements around the globe.
Yet a number of prominent Brexiteers
increasingly question who exactly the
CBI is representing. The organisation has
190,000 members, although many of
those companies are counted by virtue
of belonging to industry-specific trade
bodies that are affiliated to the CBI,
rather than direct membership.
“The CBI has managed to brand itself
as the voice of British business but the
reality is it speaks only for a small proportion of firms — the big multinationals,”
said Gerard Lyons, an economist who
advised Boris Johnson as London mayor.
For Lyons, the emphasis on trade with
There are lots
of businesses in
the UK who are
actually looking
forward to
leaving the EU
APPOINTMENTS
the EU underlines that the FTSE giants
call the shots: fewer than 1 in 10 British
firms sells directly into the single market.
The reluctance of some company
bosses to speak out on Brexit has only
intensified the pressure on the CBI. Big
names in the car industry, such as Ralf
Speth of Jaguar Land Rover, have gone
public on the impact of leaving the EU on
their business, but many others have
steered clear of political controversy.
“I actually think the CBI has done an
excellent job in conveying exactly what
business thinks and what business
needs,” said one FTSE 100 chairman. “Yet
one could argue it has done so in a very
narrow commercial sense. I have friends
in business who know Brexit will damage
their commercial interests, yet they voted
to leave . . . it shows the situation is a little
more nuanced than it seems at first.”
Even lobby groups that have scrupulously steered clear of controversy have
found themselves dragged into the political firestorm. “Business is not monolithic
on this issue,” said British Chambers of
Commerce director-general Adam Marshall, who represents a nationwide network of local groups. “My job is to reflect
those diversities of opinion.”
Even so, Marshall found himself in the
job because his predecessor, John Longworth, noisily quit the organisation in
March 2016 to campaign for a leave vote.
Of course, Britain’s business lobby
groups have never been monolithic in
THE DIRECT LINE TO
DOWNING STREET
During Theresa May’s first
year in Downing Street,
business leaders worried
they were being frozen out.
That has changed since
the prime minster’s
chastening loss of her
majority in last year’s
election. A new “business
advisory council” was set up
last summer with much
fanfare, although it has met
just three times.
The heads of the CBI and
most of the other big lobby
groups (the IoD was absent
from the most recent get
together last week) head to
No 10 with a rotating cast of
bosses, such as Ivan
Menezes of Diageo, Moya
Greene from Royal Mail, and
Ian Davis of Rolls-Royce.
The five main lobby
groups (the CBI, IoD, BCC,
Federation of Small
their views, but that mattered less when
they were campaigning on issues such as
lower corporate taxes, on which the vast
majority agreed, Longworth argues.
“On something like Brexit, it’s a different kettle of fish,” he said. “There are lots
of businesses in the UK who are actually
looking forward to leaving the EU.”
Some businesses may want to leave.
Yet surveys have consistently suggested
that many more are not so happy about
the prospect. That means organisations
such as Leave Means Leave — Longworth’s new pressure group — are hardly
likely to supplant the CBI and IoD.
At the most basic level, splits within
the business community over Brexit
merely reflect the divides in the country
as a whole. Does it really matter if industry can’t put up a united front over EU
issues? It does if the swirling controversy
of Brexit blunts the business lobby’s
effectiveness on other issues, business
people say.
Some executives claim that wider philosophical arguments in favour of capitalism, entrepreneurship and job creation
are not getting a hearing. That leaves
business groups as little more than clubs
offering discounts on insurance and
training (or in the case of the IoD, a
swanky clubland home on Pall Mall).
Certainly, the CBI has found itself in
the odd position where many of its Brexit
positions are closer to the most left-wing
Labour leader in living memory than the
Tory government of the day.
Jeremy Corbyn’s speech calling for a
long-term customs union with the EU got a
warm reception from manufacturers at
the EEF. “It’s a very uncomfortable place
for them to be,” said Dame Helena Morrissey, a high-profile City figure and head
of personal investing at Legal & General
Investment Management. “They have tied
themselves in knots. Most people I talk to
think a Corbyn government is a much bigger threat to business than Brexit.”
Drechsler counters that Corbyn was
simply playing catch-up: “Some people
say the CBI agrees with Labour policy.
No, the Labour Party has agreed with the
CBI.” To underline the point, the CBI
chairman said last week that Corbyn’s
nationalisation plans — as much as Tories
pushing for a hard Brexit — has potential
investors “reaching for their coats”.
Far from diminishing the importance
of lobby groups, Brexit has made their
role more pivotal than ever, they argue.
Edwin Morgan, director of policy at the
IoD, said: “It’s regrettable that the IoD has
recently been in the headlines over internal matters, rather than for policy proposals, but our work representing our mem-
Businesses and
manufacturers’ group the
EEF) also have weekly
meetings with business
secretary Greg Clark to talk
about industrial strategy.
The same groups also
meet Clark, Philip Hammond,
and David Davis every two
months to discuss Brexit.
The Small Business
Taskforce is beginning a
quarterly round of meetings
with ministers. The taskforce
includes more than a dozen
organisations such as
Enterprise Nation, the
Entrepreneurs’ Network, and
the Centre for Entrepreneurs.
The small business
minister, Andrew Griffiths,
has a monthly meeting with
the SME advisory group,
which includes Enterprise
Nation, the CBI, FSB and BCC
— but, curiously, not the IoD.
THE UK’S BUSINESS LOBBY GROUPS
IN NUMBERS
190,000
30,000
20,000
The number of companies that
the CBI ‘speaks on behalf of’
Individuals who are members of the
Institute of Directors
Members, including affiliates, of
manufacturers’ organisation the EEF
bers will go on as before. It is essential that
it does, because the voice of those running
companies of all sizes must be heard as the
future path of the UK is decided.”
Since the referendum, the economy
has slowed markedly, relegating Britain
from the top to the bottom of the G7
growth league. “We need to turn that performance around and give investors the
certainty they need,” Drechsler said.
“There’s never been a more important
time for this country to have business
speaking with a coherent voice.”
While the Brexit process rumbles on,
that coherence will continue to be questioned. Even so, today’s business leaders
can comfort themselves by remembering
Terence Beckett, the CBI boss in the early
1980s who promised his members “a
bare-knuckle fight” against Thatcher’s
inflation-busting policies, which he said
were hobbling Britain’s industrial base.
“Bare-knuckles Beckett” was soon confronted with a wave of companies —
including GKN and Babcock — tearing up
their CBI membership. Beckett’s blunder
was widely seen as paving the way for the
ascendancy of the IoD, which eschewed
the CBI’s 1970s corporatism and was more
in step with Thatcher’s free-market ideals.
If the lobbyists were falling out over
the Iron Lady, perhaps there never has
been a voice of business.
9
The Sunday Times March 18, 2018
BUSINESS
MATT SAYLES
The world’s biggest
company has Netflix
in its sights as it buys
up top film talent,
says Danny Fortson
in San Francisco
DANNY
FORTSON
E
ddy Cue chuckled, his face taking on a deeper hue of pink. On
stage at the South by Southwest
conference in Austin, Texas,
last week, the head of Apple’s
iTunes empire was asked, point
blank, to address persistent
rumours that the world’s largest company wants to buy Netflix, or even Disney.
With a smile, the 53-year-old rejected
the idea. Almost. “Look, generally in the
history of Apple, we haven’t made huge
acquisitions.”
He added, however, that the $910bn
(£650bn) behemoth was “all in” on creating its own shows and that its approach
would be akin to its assault on other sectors, from laptops to tablets: don’t be
first, be the best. Cue said: “We’re after
quality, not quantity. We don’t try to sell
the most smartphones in the world, we
try to make the best one, and hopefully
that other piece follows.”
Apple, wielding the world’s biggest
cheque book, has quietly entered the
content wars that have turned the media
industry on its head.
The company has, in six months,
signed a development deal with Steven
Spielberg’s Amblin Entertainment; won a
bidding war for the rights to a drama starring Reese Witherspoon and Jennifer Aniston; and beaten rivals to sign Damien
Chazelle, the sought-after director and
writer behind Oscar-winning films La La
Land and Whiplash, who will create a
drama series for the company.
Since bringing in two high-profile television executives who had worked on the
award-winning drama Breaking Bad,
Apple has begun to make good on
rumoured plans to spend more than $1bn
a year on original content. (To compare,
that sum is about half the annual budget
of HBO, maker of groundbreaking shows
from The Sopranos to Game of Thrones).
The gambit is part of Silicon Valley’s
attempt to rip the heart out of Hollywood
by grabbing the audiences — especially
young audiences — that are turning away
from traditional satellite, cable and public broadcasters and towards streaming
content delivered to smartphones and
tablets. Pay TV revenues in America
peaked three years ago and are now
dropping steadily, said Digital TV
Research. In Britain, the biggest pay-TV
provider, Sky, has lost 500,000 subscribers since 2014. During that same period,
Netflix has added 5m.
The living-room telly — an impregnable citadel for advertisers, studios and
networks since the 1950s — is under
assault. Apple, which has already
upended the phone, music and computer industries, reckons it can step into
the breach.
It has plenty of competition. Amazon
is spending an estimated $5bn a year on
Facebook plans
to spend a
reported $1bn
a year on
original content
On the cast list: Apple’s $5bn content budget gave it the muscle to outbid heavyweight rivals for a new drama series, starring and produced by Reese Witherspoon and Jennifer Aniston
Apple makes Hollywood
an offer it can’t refuse
original and licensed programmes,
including its knockout $250m bid last
year to secure the rights to a Lord of the
Rings series. Facebook plans to spend a
reported $1bn a year on original content
and has hired a clutch of former Hollywood executives to lead the charge.
The fact that a bookseller, a social network and a mobile phone maker have all
decided to invade Tinseltown may seem
hard to square. Yet they are all taking
advantage of the same trend.
Fast internet connections and powerful personal devices mean high-quality
entertainment can be delivered anywhere — and good content is a potent lure.
For Apple, it means people will buy more
products to consume its shows. Amazon’s
Jeff Bezos is playing the same game, with
slightly different goals. He said: “When we
win a Golden Globe, it helps us sell more
shoes.” More eyeballs for Facebook
means more time to sell ads.
The old guard is not standing still. Disney’s attempted £47bn takeover of
Rupert Murdoch’s 21st Century Fox,
announced in December, would give it a
vast TV and film library to plug into a new
streaming service planned for next year.
Comcast, the American cable giant, has
complicated matters with a £22bn bid to
strip Sky out of that deal. All of these
moves, however, are being made with an
eye on one company — Netflix.
When Reed Hastings unveiled his
streaming plans in 2007, there was no
shortage of sceptics. The Netflix chief’s
biggest rival back then was video rental
chain Blockbuster. Hastings had 6m subscribers, all of whom received DVDs via
the post. When he launched his “internet
movie distribution” lark, he did so with
just 1,000 films. Investors were deeply
concerned about the project’s $40m
price tag, not least because Hastings himself admitted the market at the time was
“microscopic”.
Times have changed. The Silicon Valley giant is worth $138n and had 117m subscribers globally — 7.5m in Britain — by
the end of last year, just as terrestrial and
cable subscriptions have stagnated or
gone into reverse.
The company has pledged to spend
more than $8bn on its own shows this
year — more than several of Hollywood’s
top studios. It plans to release 80 original
films. Perhaps its most telling move, however, was its recent recruitment of Ryan
Murphy, the star television producer
behind a string of hits including Nip/Tuck
and American Horror Story.
Netflix prised him away from Fox last
month with an unprecedented $300m,
five-year deal to develop a number of
shows. “The history of this moment is not
lost on me,” said Murphy.
In keeping with its preference for
secrecy, Apple has kept schtum about
how much it is shelling out for its growing
roster of A-listers. Cue said, though, that
the company’s $285bn cash pile meant
that, not surprisingly, “money isn’t an
issue”. He added: “We’re making big
investments.”
The goal for both Apple and Netflix is
the same — growing subscriptions. After
the iPhone, Apple’s biggest revenue generator is not laptops but services, which
includes Apple Music, Apple Pay and
iCloud. The division’s $8.5bn in quarterly
sales is more than the iPad, Beats headphones, Apple Watch, iPod, Airpods and
Apple TV combined.
Without a whizzy new product on the
horizon, chief executive Tim Cook has
made doubling annual services turnover
to $50bn by 2020 a target. Central to that
may be a new Apple Music subscription —
the £10 a month offer already has 38m
subscribers — that would include a slate
of glossy new shows, ready for prime
time by next year. Leading that effort are
Zack Van Amburg and Jamie Erlicht,
former co-heads of Sony’s television studio, producer of Breaking Bad.
Yet an enormous cash pile, top talent
and great desire are no guarantee of success. Apple’s first show, Carpool Karaoke,
a concept created by James Corden for
his late-night US television programme,
was a dud. The programme, which shows
stars singing along to the car music system, underwhelmed not least because
Corden, its star, did not appear in any episode but the first, with Will Smith.
The Cupertino tech giant also delayed
the show’s release, reportedly to excise
some racy content, highlighting the
issues it will face as it delves into the
world of storytelling. There are few companies as cautious with their brand as
Apple, and it is understood Cook has
made it clear that its shows will skew
toward wholesome, broadly appealing
fare — in other words, more Call the Midwife than Breaking Bad.
That dynamic may be behind the delay
of Vital Signs, a six-part series featuring
Dr Dre, the gangsta rapper turned mogul.
It started shooting two years ago but
there is no word about its release.
The only other Apple show to see the
light of day was Planet of the Apps, in
which celebrities evaluated ideas for
apps presented by bright-eyed entrepreneurs. It too was panned. Variety called it
“a bland, tepid, barely competent knock-
off of Shark Tank [America’s version of
Dragons’ Den]”.
Cue, a master of understatement,
admitted last week Apple “doesn’t know
anything” about making TV, but added
that the company has “a few surprises”
up its sleeve. What is clear is that, amid a
generational shift in the media landscape, Apple will not be put off by a few
bad reviews — or a few billion dollars
spent on dud shows.
SEASON TWO OF
DANNY IN THE VALLEY
‘I MAY NOT BE JESUS
CHRIST, BUT I’VE DONE OK,’
SAYS GROUPON FOUNDER
ANDREW MASON
THESUNDAYTIMES.CO.UK/DANNYINTHE VALLEY
Here, #MeToo means they’re all sober on the Croisette
Behaving properly
was the order of
the day and night
at the Mipim
property show,
writes Oliver Shah
in Cannes
The prostitutes strutting up
and down the Croisette in
Cannes last week clearly had
not received the memo about
improved behaviour at
Mipim, the property
industry’s annual jamboree
on the French Riviera.
They called out to passersby — mostly well-refreshed,
middle-aged men bumbling
back to their hotel rooms —
and pawed at their jackets.
“I’m working,” one woman
said brusquely when
approached for comment at
midnight on Wednesday.
In past years they might
have had more success, but
the property sector has been
subjected to heightened
scrutiny since the Presidents
Club scandal in January,
when hostesses were alleged
to have been groped and
propositioned at a male-only
dinner in the Dorchester
hotel in London.
Mipim is a four-day event
where more than 20,000
agents and investors descend
on Cannes to drink and talk
up the market. It tends to be
an exuberant affair. This year,
Reed Midem, the organiser,
reminded delegates that its
code of conduct forbids
“inappropriate behaviour”.
Institutions such as Royal
Bank of Scotland decided not
to send any employees.
As rumours circulated that
undercover journalists were
looking to entrap overfriendly businessmen, some
firms warned staff not to do
or say anything they would be
embarrassed to see hit the
front page of the Daily Mail.
In one apocryphal story, a
property executive who was
offered “whatever you want
for €500” by a scantily clad
woman on the Croisette
replied jauntily: “Will you
paint my house?”
“There was a significant
amount of cutback on
numbers of people from the
big agencies and the big
banks, and a lot of people felt
restraint was the key
component,” said Simon
Cooke, co-founder of the
property management
company Apam.
In past years, booze has
flowed freely on most
promotional stands. This
time, the delegation trying to
lure investment to Newcastle
upon Tyne was one of the few
serving champagne.
“This year, you stood out if
you were trying to be too
flash,” added Cooke.
The two sides of the event
could be overheard in
conversations throughout the
week. At a pizzeria, one
greying businessman
remarked to a colleague: “It’s
quite interesting doing this
sober. It’s quite a challenge.”
On the next table, a
younger Australian said to his
two friends: “Let’s party
hard. Let’s get f***** up.
Have either of you ever f*****
a hooker?”
One of his companions
belched. “Not of late, but I
have back in Sydney,” he said,
before adding: “She was a
stripper, mate, not a hooker.”
The exposure of the
Presidents Club, which
featured a disproportionately
high number of figures from
Cannes do:
party time in the
south of France
property businesses, has
given a sense of urgency to
the drive for more diversity.
Some delegates at last week’s
event wore badges showing
the outline of a white
elephant, handed out by the
London Festival of
Architecture in a campaign to
raise awareness of sexual
discrimination — the elephant
in the room.
Property has always been
male-dominated. Although
the number of women at
Mipim has increased in the
past 10 years, last week the
bars and restaurants along
the Croisette were still
overwhelmingly packed with
middle-aged men in dark
suits. One property lawyer
said: “It’s gone from being
completely awful to slightly
less awful. As someone who’s
been in practice for 30 years,
the only time I’ve taken
instruction from a woman is
from a general counsel.”
Chris Grigg, chief executive
of British Land, said the
bigger property companies
had woken up to the problem
“some time ago”. Three of
British Land’s 12 board
directors are women, and the
developer of the
Cheesegrater tower in
London recently decided to
top up the pay of male staff
during parental leave, as it
does for women.
Grigg said: “I’m proud that
the industry has made a lot of
change, and this is hard yards
by a lot of organisations, but
there are still parts that don’t
really stand up to scrutiny.”
One of the biggest
problems is attracting people
from different backgrounds
into graduate positions. Mark
Williams, a director of Hark
Group, an asset manager,
remembers giving a talk to a
group of sixth-formers at a
comprehensive school in
Dagenham, east London, in
2011. He said a Muslim girl put
her hand up and asked: “How
can I work in property if I
don’t like rugby?” She had
apparently browsed the Royal
Institution of Chartered
Surveyors’ website and
mostly seen images of rugby
players and slogans about
teamwork.
With the winds of change
slowly sweeping in, last
week’s event was almost
more notable for who stayed
away. Bruce Ritchie, the
corpulent investor who was
a driving force behind the
Presidents Club, did not
attend. Neither did his friend
Robert Tchenguiz — although
Tchenguiz’s brother Vincent
moored his yacht in the more
louche of Cannes’s two
harbours and partied in the
company of attractive girls.
Harvey Soning, another
trustee of the Presidents
Club, hosted his traditional
Thursday evening drinks
reception — despite the loss of
his partner for the event,
Coutts bank, which decided
to pull out. Soning, whose
reception was polite and wellattended, said he had
observed the same “jolly,
expectant” atmosphere at
Mipim as in previous years.
He accepted that “the
world has changed because of
events in Hollywood”, but
said he felt that the property
industry had been “unfairly
stigmatised” by the media in
recent months.
Soning added: “I’m not
whiter than white — I’m a
red-blooded male — but I’m
over 70 and I’m in bed by
half-eleven most nights.”
10
The Sunday Times March 18, 2018
BUSINESS
Jitters over who calls the shots in Italy
GABRIEL BOUYS
Populists are on the cusp
of power pledging to
stand up to Brussels and
end austerity. Investors
are on edge, says Michael
Sheridan in Milan
I
n the piazza outside the Milan stock
exchange stands a controversial
marble statue of a hand raising its
middle finger in a gesture that
many feel is a rebuke to the temple
of capitalism. Nervous investors
are hoping that Italy’s next government will not be doing the same
thing. Two openly populist parties
— the anti-establishment Five Star
Movement and the right-wing League —
are vying for the chance to take power.
While the stock market has recovered
its poise since Italy’s hung election on
March 4, the mathematics mean that no
coalition can be formed without support
from one or both of the insurgents.
“We are not anti-business,” insisted
Luigi Di Maio, the 31-year-old leader of
the Five Star Movement, “but the people
have voted for change and not business
as usual.”
Di Maio, the smooth face of an angry
phenomenon, has been on a charm
offensive to the US and meets Italian and
foreign corporate chiefs regularly to
spread reassurance. However, his signature pledges of a break with the EU’s fiscal austerity and the introduction of a
universal income of €780 (£690) a month
for poor jobseekers — even though claimants would have to meet conditions and it
would not come in for two years — have
spooked many analysts.
“We have to see what they really have
in mind and what it would cost to the
public finances,” said Vincenzo Boccia,
head of Confindustria, Italy’s business
federation.
Speaking to reporters in Milan, Boccia
argued that Italy had a short time to get its
house in order before global interest
rates rose and the European Central Bank
withdrew its bond-buying stimulus programme.
At first glance it might appear that the
centre-right, now dominated by the ebullient League leader Matteo Salvini, offers
a friendlier face to financial orthodoxy.
Salvini and his ally, the former prime
minister Silvio Berlusconi, propose a flat
rate of tax and are hostile to Five Star’s
handout ideas.
“I’m culturally against it,” said Salvini.
“We are certainly not proposing an
income for people who stay at home. We
are for work and growth, not welfare.
“The flat tax will give a breath of air to
our enterprises.”
Reflecting on an
uncertain future:
sunglasses
capture a
sculpture outside
the Milan stock
exchange
People
voted
for
change
and not
business
as usual
€780
1.8%
Planned monthly
universal income
of GDP: projected
deficit this year
130%
of GDP: predicted
public sector debt
The
recovery
is real
and
concrete
Berlusconi ally
Matteo Salvini
opposes welfare
handouts: ‘We
are for work
and growth’
In fact, both populist parties sow
uncertainty with their variable brands of
Euroscepticism, their shifting views on
the single currency and their shared
resolve to bust budget limits set in Brussels. Asked if the country’s membership
of the euro was not irreversible, Salvini
responded with one of the jovial, if caustic, soundbites that have made him the
most quotable politician in Italy.
“The only irreversible thing is death,”
he said. “I don’t know of anything else.”
The euro, Salvini argued, “is a medium
of exchange, that’s all. If it works, fine. If it
doesn’t then let it be changed.”
Last week he hinted that the establishment’s nightmare scenario — a deal
between the League and Five Star —
might be forged.
Analysts at Oxford Economics have
costed the pledges of both and concluded
that, if fulfilled, they would double the
country’s deficit and blow out the spread
on interest rates between Italian and German government bonds.
Neither the flat tax nor the universal
income can be covered by revenues, the
analysts said, while higher rates would
increase the burden of servicing Italy’s
gigantic public sector debt.
Italian officials argue that reforms by
the outgoing centre-left government led
by the Democratic Party (PD) have produced gradual results. The deficit is projected to be 1.8% of GDP in 2018 and 2%
next year, within EU guidelines, while
Italy’s public sector debt mountain is
predicted to ease to 130% of GDP from a
peak of more than 132%.
According to Fabrizio Pagani at Italy’s
ministry of economy and finance, the
ratio of non-performing loans (NPLs) at
Italian banks is under control.
“We’re not worried about the Italian
banks and we consider the problem of
non-performing loans resolved,” he said.
Official figures show outstanding NPLs
fell 10% in 2017 to about €149bn,
although analysts question if progress is
fast enough.
Pagani told a conference on equity and
debt investment at the Italian embassy in
London that employment and banking
reforms would remain in place because
they had either slipped beneath the political radar or were irreversible in practice.
“Structural reforms have put in place a
basis for structural growth,” he said.
“The recovery is real and concrete, based
on companies and entrepreneurs.”
A “shadow government” of elite civil
servants and economists is working
behind the scenes in the Quirinale Palace
in Rome to scope out options for President Sergio Mattarella, who will decide
later this month who gets first chance to
form a government.
Credit Suisse, in a note to clients, said:
“Italian history can help us navigate by
examining other periods when there
were weak governments and difficult
political situations.
“There could be short-term buying
opportunities if there is a moderate government with the PD and the Five Star
Movement, or a government headed by a
technocrat.”
Such smooth bureaucratic solutions
look unreal. A warning signal about how
closely politics is linked to the economy
shows up in the statistics of the two populist parties’ votes.
According to interior ministry figures,
they polled over half the votes in Oristano, a constituency on Sardinia, where
unemployment is 14.8% — against a
national average of 8.4%.
The populists also captured more than
60% of votes in the constituency of Giugliano in the Campania region of southern
Italy, where 38% of residents are under
30 — against the average of 29.5%. They
easily beat the traditional left to win more
than half the vote in an old industrial part
of Turin where 20% of local residents are
of foreign origin. The national average is
just 6.8%.
So far, the market has adapted to a
hung parliament and political uncertainty while the economy is motoring
along, with manufacturing and exports,
especially in the northern heartlands,
doing well and unemployment on a slow
downward track.
However, a report last week from the
EU warned that any substantial rollback
in the reform programme “could worsen
the risks to sustainability for Italy over
the long term”.
It is not clear whether the populists, on
the brink of power, are listening.
11
The Sunday Times March 18, 2018
ENTERPRISE
The school of hard knocks
gives entrepreneurs an edge
Luke Johnson Animal Spirits
I
often think that all autobiographies
should have the same subtitle:
“Look at Me, Mummy and Daddy,
Look at Me!” It encapsulates the
desire for attention that arises in
childhood and typically exerts a
commanding influence on our lives.
I’ve met a number of successful
entrepreneurs who’ve said their greatest
regret is that their parents never lived
to witness their achievements.
A thoughtful executive coach recently
said to me that a great deal of boardroom
behaviour is dominated by
psychological lessons learnt in early life.
While adults like to think of themselves
as rational, in fact, we are more
controlled by our emotions most of the
time. So politics, conflict and power
games are rampant in organisations —
even though such conduct is destructive.
In a sense, management isn’t really so
different to playtime at the nursery,
except that the stakes are rather higher.
There is a theory that many
exceptional individuals had tough
upbringings. Such early suffering can
teach resilience at a young age, helping
people detect and monitor threats, and
handle crises and stress. Children from
chaotic backgrounds are often better at
dealing with uncertainty in adulthood —
a valuable trait for an entrepreneur.
They can also be good at seizing
opportunities and judging risk.
Those who grow up in safe, ordered
environments are more likely to study,
delay gratification and take a secure
career path, sticking to a predictable
comfort zone. Quite a few suffer from
perfectionism — the wrong characteristic
for an entrepreneur, who needs to
understand that business progress is
about the art of the possible.
Various commentators have argued
that parental loss in early childhood has
a fairly high correlation with later
eminence. The historian Lucille
Iremonger discovered that about twothirds of UK prime ministers from 1800
to the eve of the Second World War had
lost a parent before the age of 16.
Children with missing parents need to
develop extra maturity, grit and
independence. A book called The Talent
Code by Daniel Coyle asserts that losing
a parent is a primal cue: you are not safe.
So it becomes a “springboard of
immense compensatory energy”.
Of course, such tragedies can also
have adverse consequences on one’s
personality. I’ve worked with a number
of founders who are insecure, angry or
even manic depressive. You might
expect such accomplished individuals to
be well adjusted and happy — but
I would say the balanced ones are in the
minority. Founders are driven by a need
to prove their doubters wrong and
dominate their surroundings. I recall
one very wealthy retailer, who left
school at 16, explaining how his
ambition was fuelled by rivalry with his
older brother, who had enjoyed a
glittering university education.
Lots of strivers have a need to prove
themselves, an obsessive hunger for
something — typically a combination of
wealth, power, fame and recognition.
I suspect such urges are, in effect, a
channelling of childhood trauma —
perhaps parental desertion, abuse or
deprivation. For example, billionaire
inventor Elon Musk has criticised his
father, saying: “Almost every evil thing
you could possibly think of, he has
done.” (His father denies the allegations.)
Quite a few well-known
entrepreneurs were orphans or
adopted, including Tom Monaghan, the
founder of Domino’s Pizza; Larry Ellison
of Oracle; Arnold Weinstock of GEC;
Tony Pidgley, the housebuilder; Roman
Abramovich, the Russian oligarch; the
late Steve Jobs of Apple; and Jeff Bezos of
Amazon — now the richest man in the
world. I wonder if losing or being
rejected by one’s parents can trigger a
stronger hankering for appreciation and
respect; or if the creation of a business
can somehow substitute for the early
loss of family. No doubt financial
security is also a factor.
A conventional middle-class
upbringing is probably the most certain
route for everyday business success,
according to research by the Kauffman
Institute, an organisation that seeks to
foster entrepreneurial success and
whose studies show that most
established entrepreneurs are over 40
when they start their companies, have
a degree and are married with children.
To become an outlying winner such
as Bezos or Musk, however, perhaps
requires an extra ingredient — one that
has enabled them to truly innovate and
take much bigger bets. I’m sure that if
we make life too easy and secure for our
children, we are not giving them the best
preparation for a challenging life.
Luke Johnson is chairman of Risk Capital
Partners and the Institute of Cancer
Research. luke@riskcapitalpartners.co.uk
@LukeJohnsonRCP
Dollars just
keep on
coming for
tech stars
JIM WILEMAN
Are overseas investors a mark of quality,
or a drain on our economic potential?
PETER
EVANS
I
@peterevans10
t was cause for great celebration
last October when the luxury travel
website Secret Escapes raised
$111m (£79.6m) from a raft of international investors. Why wouldn’t it
be? The cash was enough for the
start-up to embark on a spending
spree of “worldwide acquisitions”,
according to co-founder Alex Saint.
However, a few groans could be
heard among the more patriotically
minded observers of the British tech
scene. The funding round was led by
Singapore’s sovereign wealth fund, Temasek, and a debt facility was provided by
Silicon Valley Bank.
For some, the routine was depressingly familiar. Here was another fastgrowing business selling a piece of its soul
to foreign investors. To Secret Escapes,
you could add the chipmaker ARM Holdings, artificial intelligence start-up DeepMind, Candy Crush creator King Digital
and any number of smaller companies
that have sold out — in part or in full —
over the past few years.
The flow of foreign cash shows no sign
of drying up, with US funds leading the
way. North American investment in British tech businesses rose to $22.8bn
(£16.3bn) from $6.2bn last year, according to a report by the investment bank GP
Bullhound.
There are two ways to view the figures.
The first, often favoured by politicians, is
that the flood of foreign cash is an affront
to national pride. Too many companies
are “getting to a certain size, doing fabulously well, then selling to a multinational
based abroad”, the former small business
minister Margot James said last year.
The second interpretation is somewhat less narrow-minded. The fact that
so many shiny Silicon Valley funds want
to back our companies means we must be
doing something right. We have not yet
created a Facebook, yet there are grow-
TEACH YOURSELF TO . . .
CHOOSE AN HQ
Choosing where to base a
start-up is one of the biggest
decisions entrepreneurs
have to make. Get it right
and you can access funding
and talent. Get it wrong and
it can prevent an idea getting
off the ground.
For techies, London is a
good bet. Some £2.5bn, or
80% of all tech venture
funding in the UK, went to
London start-ups in 2017 —
four times the sum raised by
Paris-based entrepreneurs.
With dozens of venture
ing signs that we might. The Americans
do not want to miss out.
“There is a gathering sense that European, but particularly UK, technology
companies have broken through the glass
ceiling and significant value is now being
created consistently,” said Hugh Campbell, GP Bullhound’s managing partner.
Indeed, Britain is a more popular destination for capital than the rest of
Europe. Investment by venture capital
firms — the backers of early-stage companies — reached £4.1bn in Europe in the
fourth quarter of last year, according to
the professional services giant KPMG. UK
businesses received 48% of the cash.
The increasing appeal of tech start-ups
to overseas investors has not been an
overnight transformation. Rather, it has
been a gradual improvement over the
past decade. Founders are now more
ambitious and more international in their
outlook, according to Campbell. “To be
successful, you have to principally be an
exporter,” he added.
The deals are not confined to London,
with a rising number of investors finding
better value outside the capital. Last
year, the Chinese investment group
Fosun led a £13m funding round for the
Floow, a Sheffield business that uses big
data to help car insurers provide more
accurate quotes. In late 2015, the US private equity house JMI Equity invested
£32m in Manchester-based cyber-security company Avecto.
The tub-thumping protectionist view
of foreign investment also ignores the
reality that some companies prefer a mixture of shareholders.
When the flight comparison site Skyscanner embarked on a fundraising two
years ago, it had no shortage of offers.
The company, which was founded in
Edinburgh in 2003 and is a rare British
unicorn (worth more than $1bn) , secured
$192m from backers including Malaysia’s
sovereign wealth fund and Yahoo! Japan
— as well as the Scottish investment firm
Baillie Gifford.
“We could have done it purely from UK
investors,” said Colin McLellan, Skyscanner’s chief financial officer. “We could
probably have done it just in Scotland. It
was a conscious decision to look at a
wider pool of investors.”
capital funds in London,
start-ups can access cash.
Reda Bennis, the Moroccan
co-founder of Zebra Fuel, a
start-up that delivers petrol
to your car, chose London in
2016 for this reason. Last
month, Zebra Fuel raised
$2.5m (£1.8m) from backers
including Lastminute.com
founder Brent Hoberman,
Saul Klein and Alex
Chesterman.
“If we had founded the
company in France or
Germany, we would have
been lucky to get a single
big-name investor — let alone
three,” said Bennis.
Being in the right place to
hire staff is vital, too. “We’ve
All dressed
up and
ready for
Cornwall
hired 30 people from a lot of
different countries, with one
common factor: they’re
based in or want to relocate
to London,” said Bennis.
However, London’s status
as the place to be for
European technology
start-ups is threatened by
France. President Macron
launched a tech visa last
June and has pledged to
increase the money available
to start-ups and to loosen
French labour laws.
“Macron is saying the
right things,” said Bennis.
“The UK government needs
to be careful it does not rest
on its laurels.”
Liam Kelly
ANGEL Q&A
KAREN McCORMICK
Every week we talk to a
business angel, one of the
early-stage investors who
collectively inject £1.5bn a
year into British start-up
companies
HOW WE MADE IT
NEIL AND SOPHIE
CHADWICK
CO-FOUNDERS
OF SEASALT
One rainy day on a family
holiday to Penzance in 1981,
Neil Chadwick was dragged
into a clothing store not far
from the harbour. He thought
it was to buy a waterproof
jacket, but his father, Don,
had a different idea. The
Chadwicks emerged as
owners of the shop — and a
new set of raincoats.
A few months later, the
family had moved from their
home in Walsall in the West
Midlands to the Cornish
coast. They have been there
ever since. “Why would I
want to leave?” said
Chadwick, 51.
Leaving now would be
difficult, even if he wanted to.
In 2004, Chadwick launched
the women’s clothing brand
Seasalt with his brothers,
Leigh and David, and his
wife, Sophie. The business
now has 50 shops in Britain.
The company has surfed a
wave of interest in Cornwall
that has seen everyone from
David Cameron to Gordon
Ramsay extol the virtues of
holidaying in the county. It
has allowed the family to
export the Seasalt brand
Karen McCormick, 41, is
chief investment officer at
the venture capital firm
Beringea. She has backed
the fashion business Thread,
luxury watch retailer
Watchfinder and baby
clothing brand My 1st Years.
The fund typically invests
between £1m and £5m.
Previously, McCormick
worked for the Boston
Consulting Group and
launched her own consumer
goods business.
Pitch essentials
Get to the product demo
quickly and keep the market
opportunity succinct. If you
have to educate the investor
around the country — and the
world. “Last year we sold in
every US state except
Wyoming,” Chadwick said.
Seasalt made a pre-tax
profit of £1.2m in the year to
January 28, last year, on sales
of £41.5m. It employs 880
people, with 450 working at
the retailer’s headquarters in
Falmouth on the southern
Cornish coast. More than
80% of the staff are female.
One of them is Sophie, who is
head of textile design. She
considers hundreds of
designs for each new season,
often inspired by Cornish
history and folklore.
It is not all glamorous
fashion designs. Chadwick is
as proud of investing in
technology as he is of the new
season’s range of clothing.
Seasalt recently spent £3.5m
on a back-office planning
system, which has “made a
massive difference to
everything we do”.
At first, Chadwick said
there was a degree of tension
that came from working with
family. “There were some
pretty crazy times before we
worked out proper job
descriptions,” he said. It led
to a number of mistakes,
including an attempt to sell
men’s and children’s
clothing. The experiment was
halted seven years ago.
They now have the balance
right, Chadwick said. Leigh, a
former executive at the
catering giant Compass, deals
from scratch on the market,
they probably aren’t the
right partner. For those who
get the market, they will be
anxious to see the product
and understand if it works.
Always remember...
There is never no
competition. It may just be
in the form of substitutes or
dated incumbents, but it is
always there.
Lessons learnt
It’s all about the
management. An
outstanding team delivers
outstanding results; a
mediocre team delivers
mediocre results. It is true
At home by the sea: Neil
and Sophie Chadwick with
cockerpoo Pepé
We do not
want to
become an
identikit
shop
every time. You also need a
war plan for when things go
wrong; they always will — at
the worst possible time.
Wish I saw more...
Focus on getting to profit,
especially in a market where
a correction seems
inevitable. It can be seen as
sexy to focus on growth, but
the company is at high risk
so long as it is dependent on
someone else’s cheque to
stay alive. The faster you can
get to break-even, the faster
you become master of your
own destiny.
Wish I saw fewer . . .
Buzzwords! It’s amazing how
with the financial side of the
business, while Neil sets the
creative direction. It is a
theme that runs through the
business. “We like to mix
science with art.”
Seasalt has grown strongly
as other high street clothing
brands have struggled.
Chadwick said he has tried to
learn lessons from the fate of
chains such as Jaeger and
BHS. Seasalt, he said, ploughs
its own furrow, whereas
others follow the herd with
copycat designs. The
company offers women’s
clothes up to a size 26 and has
recently started selling a
unisex range. “We do not
want to become an identikit
shop,” he said.
Chadwick lives in
Falmouth with Sophie and
Pepé, their three-year-old
cockerpoo. His father, who
died in 2001, was a
shopkeeper, while his mother
ran the home. Chadwick went
to school at Queen Mary’s in
Walsall before moving to
Cornwall.
The family connection
remains strong and the
Chadwicks still own 100% of
the business.
Neil still keeps a bright
yellow fisherman’s jacket
from the original store in
Penzance to remind him of
the brand’s start in life. His
advice to entrepreneurs is:
“Don’t ever forget what
you’re about.”
Peter Evans
often entrepreneurs pepper
their business plans with
artificial intelligence,
machine learning or
blockchain. If it isn’t really
the focus of the business, it’s
just a distraction.
Next disrupted industry
Transport. Self-driving cars,
SpaceX, Hyperloop and
drone transport will all
change the way we move
people and products. In the
nearer term, augmented
reality and virtual reality are
already changing the
consumer market, and will
have an enormous impact in
the coming years.
Peter Evans
12
The Sunday Times March 18, 2018
BUSINESS
Oliver Shah
At last — it’s Tchenguiz, the movie
The property playboy Robert
Tchenguiz was conspicuously
absent from last week’s
Mipim boondoggle in
Cannes, having been
exposed as one of the guests
at the scandal-hit Presidents
Club dinner in January.
However, talk on the
French Riviera still turned to
the Iranian-born trader.
Tchenguiz, 57, is said to be
the subject of a new TV
documentary. He has been
filming since October with
Lynn Alleway, who produced
a memorable portrait of
Camila Batmanghelidjh amid
JUST SAYING . . .
Jamie Oliver’s
sugar tax, which
he got us to pay
but couldn’t
afford to pay
himself, is
costing us £3m
alone
the collapse of her Kids
Company charity in 2015.
Alleway, 59, is said to see
Tchenguiz as emblematic of
the boom and bust of 2007
and 2008 — quite rightly.
More promisingly, the
documentary maker is said
to be exploring his somewhat
colourful personal life.
The former tycoon has an
unorthodox family set-up: he
lives on the fourth floor of a
mansion overlooking the
Royal Albert Hall in west
London with his Polish
girlfriend, while his wife,
Heather Bird, lives
downstairs with their two
children. Bird, 48, has said
she finally plans to divorce
her errant husband.
Alleway has some form in
this area. In January, she
released the documentary
Millionaires’ Ex-Wives Club.
The lead protagonist? Lisa
Tchenguiz — Robert’s sister.
But does the new film still
have Tchenguiz’s backing
following the Presidents Club
exposé? “It’s not going ahead
for the time being,” he tells
me, adding cryptically: “The
world’s a funny place.”
Croisette suffers
liquidity problem
Property types clinked
glasses as the sun warmed
Cannes’ Croisette on
Wednesday, but a biblical
Wetherspoons boss Tim
Martin on cost pressures
on his pubs
LETTERS
downpour on Thursday
dampened spirits.
Spotted haggling over the
price of an umbrella with a
street hawker was none
other than Gary Neville, the
former Manchester United
captain. Neville, 43, has
amassed a significant
property portfolio since
retiring from football in 2011,
winding up Historic England,
among others, with plans for
a skyscraper in Manchester.
My mole says Neville
insisted on a red umbrella not
a blue one, and tried to offer
€10 rather than the going
rate of €20. The bemused
hawker clearly had no idea
who he was, and made him
cough up full price. Neville
was then heard to remark
that being in rain-drenched
Cannes was “just like being
back home in Manchester”.
Presidents Club
is back in fashion
Mipim was full of remorse
about the Presidents Club,
which has left several
attendees nursing their
reputations. But might some
people’s loss be a canny
entrepreneur’s opportunity?
On February 23, a month
to the day that the scandal
erupted, a trademark was
registered reserving the
(grammatically improved)
President’s Club name for
clothing, footwear and
headgear. The man behind
the move was Martyn
DATABANK
Warden, a fashion trader
based in Manchester.
Warden, 55, says he will
use the brand for a “grownup” range including suits,
jackets and polo shirts. He
denies the infamous event
provided inspiration: “I
don’t think that would go
down too well, do you?”
SIGNALS
AND NOISE . . .
Send your letters, including
full name and address,
to: The Sunday Times,
1 London Bridge Street,
London SE1 9GF. Or email
letters@sunday-times.co.uk
Letters may be edited
Europe should beware the
costs of targeting the City
The Sunday Times is to be
congratulated for the detail
and depth of its analysis on
Europe’s financial rivals to
London (“France wants to
knock out the City, but does
the EU?”, last week).
This is because the article
took the all-too-rare position
of detailing and explaining
why Brexit has potentially
huge costs to the EU in terms
of financial services.
It also noted the internal
EU divisions between those
who see an opportunity to try
to poach finance business
from the City and those who
recognise its dominance and
the benefits for all that flow
from its agglomeration.
Some of the costs of doing
business in other locations
were also examined. These
range from language, total tax
rates and housing to
education, support services
and regulations.
Finally, it concluded that a
Brexit beneficiary in financial
services may well be New
York, second to the City in the
Global Financial Centres
index (GFCI). This regular
survey gives cities a score
based on five main factors:
business environment;
How to get ahead
in software
Dame Stephanie Shirley was
on sparkling form at the
Science Museum last week
for the Chartered
Management Institute
annual shindig, where she
received a lifetime award.
Shirley, 84, described her
struggle to build a software
programming company
staffed by women that was
eventually valued at $3bn.
“You can always tell
ambitious women by the
shape of our heads,” she
said. “They’re flat from being
patted all the time.”
Roger’s piste
In last week’s diary, I
expressed surprise that
YouGov chairman Roger
Parry had managed to break
a rib while skiing, given his
ample padding. This week,
the maligned grandee emails
over a picture of himself
posing on the slopes, looking
“svelte and athletic”. Parry,
64, insists: “It’s all muscle.”
From cool cities to thriving
market towns and leafy
suburbs, find out whether
your neighbourhood is
one of the best places to live
in our special magazine
BEST PLACES TO LIVE 2018
TWITTER POLL
Yes
No
29% 71%
Do you believe Unilever’s
claim that its decision to
move its headquarters
to Rotterdam had nothing
to do with Brexit?
@ST_Business
financial sector development;
infrastructure; human
capital; and reputational and
general factors.
Warnings about financial
services relocation from the
City have been made for
some time. The report should
have gone further and noted
other possible non-EU Brexit
beneficiaries. These range
from the existing financial
powerhouses of Hong Kong
(third in the GFCI), Singapore
(fourth), Tokyo (fifth) and
Shanghai (sixth), even to
Osaka (21st), and Seoul (22nd)
and other Asian rising stars
such as Beijing (10th),
Shenzhen (20th), Guangzhou
(32nd), even Qingdao (47th).
To put these rankings into
perspective, the highestranked European city after
London is Zurich (ninth),
with no EU city in the top 10.
The EU’s “usual suspects” for
financial service relocation
are Frankfurt (11th), Paris
(26th) or Amsterdam (33rd).
Once again the EU should
be less inward-looking and
more aware and concerned
about the rest of the world
and its place in it.
Professor Chris Rowley,
Kellogg College, University
of Oxford
Bravo, Luke Johnson: it’s
time to laud entrepreneurs
What a wonderful piece by
Luke Johnson (“We should be
celebrating Jamie — not
gloating at his misfortune”,
last week). It was not so much
a read as an eddying flow
through certain elitist views
and the financial realities of
our business environment. It
was about “those that do”
versus “those that do little”.
Steve Adamson,
Fareham, Hampshire
While Luke Johnson makes
fair points, he neatly
overlooks the possibility that
Jamie Oliver, like many wellknown people, appears to
think he has the Midas touch.
Writing books and appearing
on TV is not the same as
running a successful
business, so schadenfreude
may be appropriate.
Mr Johnson also overlooks
the revelations that many rich
people indulge in dubious tax
practices to further enlarge
their already excessive wealth
and thus deserve the
opprobrium heaped on them.
Edward Bellamy, Bedford
Muddled thinking on the
EU and Nato’s budget
Irwin Stelzer makes a
startling mistake in his
column last Sunday — he says
the EU “has not honoured its
commitment to devote 2% of
its GDP to the Nato budget”
and speculates that
THE WEEK IN THE MARKETS
INSIDE THE CITY JOHN COLLINGRIDGE
Trumplethinskin will use this
as a measure to decide
whether or not to impose
recently announced steel and
aluminium tariffs on the EU.
The EU is not a member of
Nato, and some individual EU
member states, such as
Ireland, are not members of
Nato.
Ray Leonard, Wicklow,
Ireland
THE ECONOMY
current rate
Consumer prices index
Did John
Laing need
its rights
issue?
closed on Friday at 255.6p —
above the 251.7p price the
night before the rights issue —
to value John Laing at £938m.
Was the rights issue really
necessary? Analysts at Royal
Bank of Canada don’t think
so, and reckon it said more
about John Laing’s challenges
to squeeze cash from selling
assets and its high cost base.
“Investor feedback has raised
questions about whether the
rights issue was a fitting
decision by management,”
they wrote. “Communication
needs to be improved.”
It’s a stark message for
chief executive Olivier
Brousse, who ran the
disastrous Connex rail
franchise in 2000, and
spearheaded John Laing’s
float in 2015.
There is another reason
why the cash call does not
quite add up, and it involves
Turbulent stock markets
create unforgiving conditions
for rights issues — especially
when they are priced at a
hefty discount.
John Laing, the FTSE 250
investor in roads, railways
and schools, tested
shareholders’ patience this
month with a rights issue
priced at a 29% discount.
Its explanation for the
£210.2m cash call — set at a
level typically associated with
boardroom desperation —
was that it needed to access a
flurry of potential American
deals that would generate
much higher returns.
Pay up, or miss out, it
demanded. Investors duly
stumped up the cash (grimly
accepting the £6.3m of fees
paid to bankers and advisers
to arrange the deal). They
were soon rewarded. After a
blip on the day, its shares
have since rebounded. They
John Laing
280p
240
200
160
2015
2016
2017
Source: Thomson Reuters
trains. Bear with me . . .
Last week, John Laing sold its
remaining 15% stake in the
first phase of a private finance
initiative deal to build and
maintain a new fleet of
Hitachi IEP trains — which are
running on the Great Western
Railway. It was sold for the
eye-watering price of £227.5m
to insurer Axa.
Why eye-watering? Only
five months ago, John Laing
sold a 9% stake in the same
contract for about £90m. Had
it achieved the same
valuation on the earlier sale,
that would have raised an
extra £45m or so — trimming
the amount now raised in the
cash call.
Industry sources claim
there was no competitive
auction for that stake. The
buyer, John Laing
Infrastructure Fund ( JLIF), is
a separate listed company but
with a shared heritage.
JLIF was founded in 2010
when it was spun out of its
namesake. While the two
companies are completely
independent with separate
shareholders, JLIF gets first
refusal on assets sold by its
sister company. The
relationship between the two
perhaps needs more scrutiny.
@jcollingridgeST
FTSE 100
7,164.14
19,804.90
H:7,792.6
L:7,062.1
60.37
0.84%
FTSE 250
280.17
1.39%
H:20,984.8
L:18,739.9
DOW JONES
24,946.51
NASDAQ
7,481.99
78.82
1.04%
H:7,637.3
L:5,769.4
207.31
0.97%
7,600
U 0.01
12-month high: $1.43
low: $1.22
7,400
EURO
EUR > GBP
7,200
€1.13
7,000
M A M
J
J
A
RISERS
Nex: 874p, U 29.2% on takeover
approach Hikma Pharmaceuticals:
£11.22, U 24.8% on annual results
Nostrum Oil & Gas: 319p, U 13.9% on
broker report Petra Diamonds: 72.5p, U
13.1% on sentiment Soco International:
104.4p, U 12.7% on analyst upgrade
O N
D
J
F
FALLERS
Sportech: 41.8p, V 47.3% on profit
warning Greencore: 134.4p,
V 26.8% on earnings downgrade
PZ Cussons: 233.4p, V 19.2% on profit
warning XAAR: 275p, V 14.1% on
analyst rating KCOM: 90.5p, V 14%
on sentiment
FTSE EUROFIRST
1,478.16
H:1,588.0
L:1,434.0
1.22
0.08%
H:33,484.1
L:23,723.9
SHANGHAI
3,269.88
SENSEX
33,176.00
CAC 40
5,282.75
ALL ORDS
6,054.90
8.35
0.16%
DAX
12,389.58
H:24,129.3
L:18,224.7
S
Source: Thomson Reuters
37.28
1.13%
H:2,872.9
L:2,322.3
NIKKEI
21,676.51
$1.39
7,800
505.76
1.63%
S&P 500
2,752.01
34.56
1.24%
DOLLAR
USD > GBP
HANG SENG
31,501.97
H:26,616.7
L:20,379.6
389.23
1.54%
FTSE 100
42.90
0.35%
131.14
0.39%
H:3,587.0
L:3,016.5
S&P TSX
15,711.33
133.52
0.86%
H:13,596.9
L:11,831.0
YEN
YEN > USD
¥106.00
Retail prices index
12-month high: ¥114.72
low: ¥105.23
OIL
DOLLARS/BARREL
$66.21
U 0.72
12-month high: $71.28
low: $44.35
GOLD
DOLLARS/TROY OZ
$1,314.49
£512
H:16,421.4
L:14,785.8
$7,942.74
V 1,508.93
12-month high: $19,497.4
low: $919.5
Price at 5pm Saturday
prev. month
2.7%
2.7%
current rate
prev. month
4.0%
4.1%
U
Unemployment
1.47m
Manufacturing output
0.2%
U
prev. month
4.4%
4.3%
on the year
on last month
2.7%
U
on the year
Retail sales
U
UK trade
balance (£bn)
Gross domestic
product
Budget deficit
(PSNB) in £bn
latest 3 mths
prev. 3 mths
-5.3
U
U
0.1%
latest 12 mths
-28.8
latest quarter prev. quarter
0.4%
0.1%
on last month
1.6%
-8.7
U
2.8%
current rate
U
0.5%
annual change
U
1.4%
latest month
prev. month
year to date
+10.0
8.7
37.7
10-YEAR BOND YIELDS %
variation
12-month high: $1,359.26
low: $1,210.29
BITCOIN
DOLLARS
3.0%
current rate
on prev. month on last year
Average weekly earnings
V 0.77
V 7.37
H:6,256.5
L:5,670.7
14.20
0.23%
H:5,567.0
L:4,953.6
H:36,444.0
L:29,137.5
U 0.01
12-month high: €1.20
low: €1.07
CPI including housing
prev. month
3.0%
12 months
high
low
0.72
UK
1.43
V 0.06
1.79
US
2.85
V 0.05
2.96
2.02
JAPAN
0.04
V 0.01
0.11
-0.01
GERMANY
0.57
V 0.08
0.80
0.16
TOP 200 COMPANIES
Market cap ranking
V
49 3i Group
85 Admiral
185 Aggreko
162 Alliance Trust
23 Anglo American
45 Antofagasta
200 Ascential
148 Ashmore
43 Ashtead
29 Associated British Foods
6 Astra Zeneca
124 Auto Trader
132 Aveva
27 Aviva
120 Babcock International
30 BAE Systems
183 Balfour Beatty
15 Barclays
87 Barratt Developments
123 BBA Aviation
145 Beazley
111 Bellway
93 Berkeley
18 BHP Billiton
106 B&M European
193 Bodycote
4 BP
3 British American Tobacco
70 British Land
192 Britvic
25 BT
156 BTG
67 Bunzl
61 Burberry
169 Capital & Counties Properties
44 Carnival
194 Centamin
56 Centrica
122 Cineworld
167 Close Brothers
133 Cobham
46 Coca Cola HBC
21 Compass
110 Convatec
28 CRH
82 Croda
153 CYBG
74 DCC
152 Dechra Pharmaceuticals
121 Derwent London
7
Diageo
86 Direct Line Insurance
Price Change
on week
907.2
1891.0
760.4
738.0
1769.4
967.6
421.0
389.2
1994.5
2510.0
4867.0
350.4
1951.0
517.8
684.2
585.0
287.6
209.5
527.2
326.2
541.0
3048.0
3713.0
1443.2
414.3
937.5
473.8
4183.5
632.0
691.0
227.9
682.5
2045.0
1669.0
265.0
4698.0
154.3
138.4
247.4
1496.0
129.2
2531.0
1540.0
195.5
2484.0
4548.0
305.6
6940.0
2664.0
3054.0
2436.0
388.3
–15.2
–23.0
+43.2
–1.0
+17.2
+73.2
+17.6
–5.8
–15.5
–97.0
+81.5
–41.5
–109.0
–1.6
+10.8
–16.8
+10.6
–1.2
–21.4
–12.6
–33.0
–143.0
–143.0
+7.4
–9.5
–8.5
–4.4
–90.0
–5.6
–25.5
–11.6
+2.5
+5.0
+1.5
–5.6
–40.0
+2.8
–3.5
+7.8
–83.0
–4.5
+13.0
–11.5
–12.0
+39.0
–84.0
–9.8
+105.0
+114.0
+29.0
–10.5
–2.1
52-week
Yield
high
low
969.5
2178.0
983.0
769.0
1843.6
1061.0
421.0
433.2
2152.0
3371.0
5508.0
435.9
3054.0
542.0
969.5
677.0
307.6
230.4
700.0
368.8
574.5
3792.0
4240.0
1660.0
434.8
1006.0
534.8
5643.0
691.5
820.0
334.4
779.0
2465.0
1985.0
324.8
5380.0
190.5
219.5
247.4
1715.0
148.0
2671.0
1757.6
344.0
2920.0
4655.0
340.3
7755.0
2690.0
3118.0
2725.0
411.3
700.5
1784.0
695.4
667.0
959.4
751.0
309.1
332.3
1542.0
2484.0
4325.0
319.0
1803.0
486.5
626.2
535.5
253.5
178.9
527.2
292.5
425.0
2687.0
3087.0
1117.0
299.3
739.5
439.8
4166.0
590.5
636.0
224.9
565.0
1936.0
1498.0
253.1
4475.0
131.8
124.1
97.9
1316.0
113.4
1991.0
1425.0
182.0
2380.0
3483.0
260.0
6515.0
1624.0
2580.0
2201.5
334.4
2.9
2.7
3.6
1.8
2.0
1.5
1.1
4.3
1.4
1.5
4.2
1.5
2.0
4.2
4.1
3.6
0.9
1.4
4.6
3.0
1.9
3.7
3.7
4.3
1.4
1.7
6.3
4.1
4.7
3.6
6.3
2.0
2.3
0.6
1.8
7.7
8.7
3.4
4.0
1.4
1.5
2.2
0.5
2.3
1.6
1.6
0.8
1.7
2.5
3.8
P/E
Mkt Cap
(£m)
- 8911.5
23.7 5385.2
16.1 1947.6
- 2518.0
9.8 24853.3
38.4 9539.2
45.8 1686.3
18.5 2774.0
10.1 9957.1
16.6 19871.0
27.8 61638.1
21.0 3343.5
59.1 3145.1
34.3 20780.6
10.7 3459.3
17.6 18626.3
87.2 1983.7
61.6 35748.6
8.5 5308.9
22.4 3365.6
30.0 2844.1
8.3 3742.9
6.8 5022.4
22.2 30480.4
27.1 4143.0
23.1 1794.9
32.3 94421.5
18.4 95954.4
10.9 6508.4
16.4 1821.8
14.1 22607.1
35.9 2632.7
23.8 6869.9
23.8 7316.6
91.4 2246.6
17.7 9764.6
22.1 1777.7
13.8 7599.3
15.5 3388.5
11.4 2265.3
- 3089.2
26.7 9309.1
21.6 25326.7
33.1 3815.1
13.2 20773.3
28.1 5975.7
17.8 2703.4
30.6 6190.5
58.0 2724.7
32.0 3404.4
19.1 60535.7
16.7 5339.1
Market cap ranking
V
174
68
157
79
35
37
190
115
50
108
60
5
8
186
171
144
96
119
52
195
150
160
155
104
166
136
2
137
134
24
143
141
81
191
51
138
54
38
182
149
107
83
175
146
116
77
168
91
105
59
127
62
Dixons Carphone
EasyJet
Electrocomponents
Evraz
Experian
Ferguson
Ferrexpo
Foreign & Colonial
Fresnillo
G4S
GKN
Glaxo Smith Kline
Glencore
Grafton Group Units
Great Portland Estates
GVC Holdings
Halma
Hammerson
Hargreaves Lansdown
Hastings
Hays
HICL Infrastructure
Hikma Pharmaceuticals
Hiscox
Homeserve
Howden Joinery
HSBC
IG Group
IMI
Imperial Brands
Inchcape
Indivior
Informa
Inmarsat
Intercontinental Hotels
Intermediate Capital
Intertek
International Airlines Group
International Public Partnerships
Intu Properties
Investec
ITV
IWG
Jardine Lloyd Thompson
JD Sports
Johnson Matthey
Jupiter Fund Management
Just Eat
Kaz Minerals
Kingfisher
Ladbrokes Coral
Land Securities
Price Change
on week
189.0
1658.5
593.6
420.9
1605.0
5264.0
313.0
651.0
1203.5
251.2
426.9
1323.4
385.5
818.0
669.5
955.0
1192.0
437.1
1734.5
265.4
190.4
142.7
1121.5
1456.0
733.0
476.3
707.3
814.5
1130.0
2454.5
689.5
403.0
729.6
400.6
4510.0
1029.0
4953.0
631.8
147.4
204.0
597.2
147.6
237.5
1296.0
361.2
3138.0
491.2
749.6
930.6
343.4
170.4
906.8
+0.7
+95.5
–24.6
–16.1
+24.5
–54.0
+20.0
–1.0
–35.0
–11.0
–8.2
–12.6
+15.7
+3.5
–0.5
+9.5
–20.0
–18.3
+14.0
–7.6
–1.5
+0.5
+223.1
–54.0
–10.5
–19.9
+1.5
+11.0
–11.0
–137.5
–3.5
+1.0
+21.8
–32.1
–80.0
–22.0
–99.0
+7.8
+0.8
–7.9
–47.8
–5.6
–8.6
+6.0
–24.7
–112.0
–13.6
–38.8
+37.6
–7.3
+2.7
–10.3
52-week
Yield
high
low
342.0
1696.0
709.0
455.1
1705.0
5702.0
323.2
672.0
1725.0
341.1
447.6
1722.0
415.0
841.0
739.0
982.0
1330.0
609.5
1928.0
325.0
205.0
174.6
2168.0
1525.0
867.0
501.2
796.0
824.5
1443.0
3933.5
880.5
419.5
761.0
850.5
4928.0
1178.0
5425.0
670.0
166.6
289.0
648.6
219.6
365.2
1448.0
456.0
3503.0
631.4
890.0
965.8
368.1
188.0
1208.5
149.1
985.0
471.2
173.2
1446.0
4460.0
137.2
555.5
1189.5
248.8
294.3
1242.8
276.6
652.0
587.5
708.0
959.5
434.4
1266.0
249.9
155.9
141.1
855.6
1082.0
545.0
399.5
620.8
491.9
1103.0
2454.5
674.5
267.6
629.5
386.7
3668.0
700.5
3871.0
523.5
146.0
194.7
461.4
146.9
190.9
1096.0
303.3
2727.0
420.2
556.5
430.5
288.0
111.3
906.8
3.2
2.1
5.2
1.9
2.0
0.8
1.6
1.9
3.8
2.1
6.1
1.3
1.7
1.5
1.1
5.6
1.7
3.7
1.7
5.5
2.3
2.0
2.1
2.3
5.3
4.0
3.4
6.5
3.6
2.7
10.2
1.6
2.5
1.3
3.5
4.5
6.9
3.8
4.9
2.2
2.5
0.4
2.4
3.5
3.0
1.8
4.6
P/E
Mkt Cap
(£m)
8.9 2179.7
21.6 6587.7
24.7 2621.1
11.9 6027.5
26.0 14757.1
15.0 13322.0
7.3 1842.4
- 3518.8
20.3 8868.5
13.6 3897.6
14.7 7331.6
28.0 65082.9
13.0 55607.4
15.2 1941.8
- 2187.5
- 2871.4
32.5 4519.9
8.9 3471.6
36.8 8227.1
18.7 1745.5
18.4 2762.0
- 2547.4
21.0 2699.2
161.8 4178.4
31.5 2277.5
16.0 2997.9
19.9 141430.6
15.5 2996.5
20.3 3073.3
16.7 23409.5
10.8 2875.7
47.6 2907.5
29.2 6011.9
11.4 1826.9
20.0 8568.6
13.8 2987.2
29.3 7993.7
7.7 12939.6
13.5 1989.6
12.1 2764.3
12.4 3981.1
14.6 5941.5
19.3 2162.4
24.0 2838.7
17.6 3515.3
16.0 6073.1
14.6 2248.2
60.9 5092.1
18.6 4157.2
13.1 7423.9
- 3266.1
39.3 7170.5
Market cap ranking
V
33
12
36
147
97
98
117
101
199
114
130
53
188
63
196
94
180
20
125
65
64
113
40
198
75
161
176
55
135
164
128
71
11
84
14
170
17
118
92
109
10
139
32
163
16
1
90
126
72
58
Legal & General
Lloyds Banking Group
London Stock Exchange
Man
Marks & Spencer
Mediclinic International
Meggitt
Melrose
Mercantile Investment Trust
Merlin Entertainments
Metro Bank
Micro Focus International
Millennium & Copthorne Hotels
Mondi
Monks Investment Trust
Morrison Supermarkets
National Express
National Grid
Nex Group
Next
NMC Health
Ocado
Old Mutual
Page Group
Pearson
Pennon
Pershing Square
Persimmon
Phoenix Group Holdings
Playtech
Polymetal International
Paddy Power Betfair
Prudential
Randgold Resources
Reckitt Benckiser
Redrow
Relx
Renishaw
Rentokil Initial
Rightmove
Rio Tinto
RIT Capital Partners
Rolls-Royce
Rotork
Royal Bank Of Scotland
Royal Dutch Shell A
Royal Dutch Shell B
Royal Mail
RPC
RSA Insurance
Sage
Price Change
on week
262.4
67.5
3996.0
173.9
275.9
601.8
452.0
224.2
2125.0
358.3
4018.0
1884.5
575.0
1949.0
810.0
211.0
392.8
780.7
874.0
4759.0
3448.0
585.8
249.0
526.5
775.8
605.6
920.0
2527.0
781.0
758.0
754.0
7635.0
1913.5
5964.0
5675.0
592.0
1485.5
4782.0
276.5
4193.0
3735.0
1918.0
901.6
278.9
260.6
2213.5
2248.5
516.0
811.6
628.6
687.0
–0.1
+0.2
+60.0
+1.5
–1.8
–15.6
–11.0
–0.5
–15.0
–14.8
nc
–138.5
+27.0
–35.5
+3.0
–16.9
+4.6
–3.0
+197.5
–13.0
–66.0
–8.2
–7.5
–0.5
+24.4
–33.6
–9.0
–70.0
–16.5
–34.0
–31.0
–250.0
+67.0
–70.0
–135.0
–16.5
–27.0
–128.0
+4.1
–107.0
+8.5
–12.0
–24.2
–4.2
–1.2
–48.0
–39.0
–50.6
–20.2
–6.6
–8.8
52-week
Yield
high
low
276.8
73.1
4085.0
217.7
395.5
887.0
526.0
261.2
2210.0
537.0
4040.0
2739.0
625.5
2130.0
825.0
252.9
395.2
1157.5
874.0
5320.0
3524.0
597.6
257.8
560.0
775.8
944.0
1250.0
2890.0
815.0
1016.0
1095.0
8900.0
1981.0
8190.0
8108.0
664.5
1782.0
5775.0
335.8
4573.0
4172.5
2005.0
981.0
304.2
302.4
2573.5
2609.0
570.0
993.0
666.5
821.4
245.0
62.2
3014.0
142.3
275.9
507.5
437.1
198.8
1796.0
318.4
3242.0
1884.5
431.9
1693.0
617.5
207.0
340.9
736.8
558.0
3617.0
1744.0
238.5
188.0
421.3
566.5
605.6
912.0
2083.0
724.0
749.2
740.6
6665.0
1613.0
5766.0
5624.0
493.3
1455.0
3050.0
239.2
3889.0
2910.0
1815.0
743.0
223.5
224.7
1992.5
2052.5
369.9
720.5
570.5
615.5
P/E
Mkt Cap
(£m)
5.6 8.6 15635.5
4.0 14.1 48647.4
1.1 47.1 13857.5
4.1 15.4 2823.4
6.8 24.2 4482.7
1.3 64.7 4435.3
3.3 12.1 3506.4
1.0
- 4352.2
2.4
- 1712.7
2.0 17.3 3639.6
- 318.9 3230.2
3.8 36.6 8199.0
1.4 16.8 1867.3
2.6 17.2 7157.5
0.2
- 1738.0
2.6 14.0 4928.3
3.1 17.1 2010.1
5.8 15.7 26247.2
4.4 47.5 3318.9
3.3 11.1 6998.4
0.3 56.1 7043.8
- 3661.2 3698.9
2.8 31.5 12282.6
2.3 20.7 1719.5
6.7
- 6079.2
5.9 13.9 2522.0
- 2158.8
5.3 11.3 7805.8
6.0
- 3068.2
3.8 12.2 2405.5
2.7 11.9 3243.1
2.0 47.0 6430.6
2.3 17.9 49507.7
1.2 27.0 5605.9
2.7 19.0 39892.1
2.9 7.5 2189.2
2.5 18.2 30707.9
1.1 25.3 3480.8
1.2 7.5 5080.2
1.2 29.0 3815.2
4.6 10.4 50094.5
- 2967.2
0.5
- 16590.7
1.8 32.1 2426.9
- 31183.4
6.4 22.8 185974.9
6.2 23.2
4.5 14.4 5160.0
3.0 15.9 3310.6
2.5 56.1 6428.0
2.1 28.9 7425.6
Market cap ranking
V
89
48
69
76
103
140
19
26
88
41
73
172
57
165
131
99
181
39
142
22
78
42
159
80
179
31
189
154
129
47
158
112
177
13
197
95
173
178
9
102
66
151
187
184
100
34
Sainsbury, J
Schroders
Scottish Mortgage
Segro
Severn Trent
Shaftesbury
Shire
Sky
Smith (DS)
Smith & Nephew
Smiths
Smith WH
Smurfit Kappa
Sophos
Spectris
Spirax-Sarco
Sports Direct International
SSE
SSP
Standard Chartered
St James’s Place Capital
Standard Life Aberdeen
Tate & Lyle
Taylor Wimpey
Templeton Emerging Markets
Tesco
Thomas Cook
TP Icap
Travis Perkins
Tui
Tullow Oil
UBM
UDG Healthcare
Unilever
Unite Group
United Utilities
Vedanta Resources
Victrex
Vodafone
Weir
Whitbread
William Hill
Witan Investment Trust
Wizz Air Holdings
Wood
WPP
Price Change
on week
236.1
3410.0
470.0
608.4
1775.0
960.0
3205.5
1309.5
495.5
1329.0
1591.0
1984.0
3158.0
497.4
2701.0
5990.0
371.3
1239.0
609.5
767.4
1141.5
375.1
549.6
184.1
773.0
209.8
120.0
487.2
1283.0
1545.5
186.9
949.5
857.0
3787.0
768.5
694.4
787.2
2480.0
201.5
1962.0
3811.0
320.5
1054.0
3437.0
647.0
1169.0
–6.9
+6.0
–3.6
+9.4
–51.0
–23.5
+13.0
–28.5
–14.7
–2.0
–19.0
–54.0
–62.0
–32.6
+68.0
+210.0
+4.3
–18.0
–17.0
–11.5
–11.5
+4.7
–13.4
–4.0
–8.0
–2.9
–2.1
–59.4
–36.5
+13.5
–4.2
+19.5
–32.0
–107.5
–26.5
–8.2
+35.2
–96.0
–5.5
–40.0
–121.0
–11.2
nc
–7.0
–9.6
–35.5
52-week
Yield
high
low
281.7
3773.0
477.8
609.4
2553.0
1055.0
4852.0
1373.5
558.5
1431.0
1685.0
2347.0
3220.0
669.5
2834.0
6090.0
419.5
1551.0
687.5
849.2
1270.5
446.3
795.0
211.2
825.0
214.4
129.5
553.6
1696.0
1640.5
238.9
949.5
959.0
4548.5
813.0
1056.0
954.0
2730.0
238.0
2305.0
4307.0
338.0
1108.0
3716.0
828.5
1754.0
224.8
3030.0
352.2
452.5
1703.0
900.0
2992.0
900.0
418.8
1215.0
1444.0
1664.0
1962.0
271.0
2229.0
4703.0
284.5
1182.0
404.0
685.9
1030.0
360.0
542.8
174.9
643.0
166.5
84.1
444.8
1273.0
1068.0
145.6
645.0
694.0
3710.5
622.0
659.0
575.0
1832.0
198.8
1727.0
3512.0
240.0
944.0
1615.0
560.0
1155.5
P/E
Mkt Cap
(£m)
4.3 24.6
2.7 17.9
0.6
2.7 6.2
4.6 14.4
1.6 8.9
0.7 9.3
- 27.7
3.1 24.4
1.7 20.5
2.7 11.2
2.3 19.1
2.2 21.4
0.7
1.9 290.4
1.3 33.9
- 13.3
7.4 9.2
1.0 31.7
- 44.5
2.9 48.2
5.4 12.7
5.1 10.3
1.5 11.2
1.1
- 37.5
0.4 150.0
3.5 30.8
3.5 427.7
3.6 12.6
2.3 27.3
1.1 39.9
3.3 19.8
2.3 8.9
5.6 11.1
5.2
1.9 21.3
6.5
2.2 65.8
2.5 14.8
4.0
2.1
- 21.0
4.0
4.8 8.6
5169.8
9048.0
6558.2
6074.3
4190.0
2946.1
29097.6
22510.5
5288.0
11625.0
6292.0
2185.6
7478.8
2292.4
3220.0
4405.1
2006.2
12576.6
2896.5
25299.5
6033.9
11168.1
2559.5
6025.3
2110.4
17177.8
1843.0
2699.7
3234.3
9072.7
2594.9
3741.9
2128.2
46647.0
1724.8
4735.1
2181.3
2128.0
53747.7
4282.1
6989.2
2752.7
1871.8
1975.5
4384.6
14836.2
Price/earnings ratios are based on historic data, with yield and p/e values
calculated from the most recent reported dividends and earnings per share,
using trailing 12-month figures. 52-week highs and lows are end of day.
nc = no change Data provided by Morningstar.Any enquiries please contact:
dataquestions.uk@morningstar.com
MONEY
13
The Sunday Times March 18, 2018
MONEY
TAKING ALL THE
RIGHT STEPS
FAME &
FORTUNE,
PAGE 20
TIGGER HAMMOND
TACKLES THE ONLINE
TAX DODGERS
PAGE 15
IT’S MY ROUND —
AND I’M BUYING
BRITISH
IAN COWIE, PAGE 15
12
14
PUZZLES
CROSSWORDS,
SUDOKU & MORE
PAGES 18-19
Follow us on Twitter @ST_Money
Hello, operator, you’re ripping me off
ADRIAN SHERRATT
Many of us only
have a landline
so we can get
broadband, so why
are we paying so
much for a phone
we never use, asks
Ali Hussain
Others, such as Virgin and Sky, provided
the breakdown as well as the overall cost.
Andrew Ferguson, of the broadband
analyst Thinkbroadband, said the advertising changes have “not stopped landline price rises. We just no longer know
which component of a broadband deal
has gone up in price.”
S
ara Robinson pays £18.99 a
month for a phone line but
has not had a phone attached
to it for a decade. A public
relations consultant from
Cardiff, she is one of a growing number of people in Britain who no longer use — or
have — a traditional handset
connected to a socket on the
wall. She must, however, still pay for the
line to receive broadband.
“I got rid of the home phone when I
redecorated about 10 years ago,” she
said. “The only people who contacted me
on it were cold-callers offering PPI
refunds.”
Robinson, 36, who works partly from
home, has a fibre-optic broadband service from Sky that costs £11.01 a month on
top of the £18.99 for the phone line. Sky
says the landline is required as it still uses
the old copper wire network to deliver its
internet services.
The number of calls made in Britain
on landlines fell by 55% between 2010
and 2016, according to the telecoms regulator Ofcom. However, the number of
people with a landline has been rising as
more people get online (up 300,000 in
2016). So, too, has the amount they pay:
the cost of “wired telephone services”
has increased at five times the official rate
of inflation since the start of 2015, according to the Office for National Statistics.
Such increases have fuelled concerns
that providers are ramping up landline
fees in order to boost margins or to subsidise cheap broadband deals — a practice
that disproportionately hits elderly people, given that more than 40% of those
who only have landlines are aged over 75.
From December 2009 to June 2017, the
cost of line rental rose by up to 47% after
taking account of inflation, according to
Ofcom. Over the same period, the cost to
companies of providing landline services
fell by about 27%.
Last year the regulator ordered BT to
cut charges for about 1m of its landlineonly customers. From next month, the
amount they pay will fall from £18.99 to
£11.99 a month. There will be no cut for
BT’s 9m or so broadband customers, who
are also required to have a landline as
part of their package.
Ofcom targeted BT because it accounts
for almost 80% of the landline-only
market. It said it hoped other companies
would follow suit voluntarily.
Money can reveal that the Post Office
— which describes itself as the secondlargest landline-only provider in the UK —
will become the first to cut charges voluntarily for its landline-only customers.
Last week the organisation said it had
begun writing to customers to say they
would be able to pay £11.50 a month,
Hang ups: Sara Robinson says she ‘got rid of the home phone’ 10 years ago, but still has to pay £18.99 a month for the line
The cost of
landline services
has increased by
five times the
official rate of
inflation since the
start of 2015
rather than the £16.99 they spend now.
The option will benefit about 200,000
people and be available from May — but
only to those customers who sign up for a
12-month contract. There is an additional
£1.50 monthly charge to receive paper
bills, which is useful to people without
broadband. (BT does not charge landlineonly customers extra for paper bills.)
Post Office customers who do not
respond will continue to pay the higher
rate. New landline-only customers will be
on the lower charge.
Charges for those who receive both
landline and broadband services from
the Post Office are rising, however. This
month it announced a 33% increase in the
cost of some call plans, while call charges
will rise by up to 14.2%.
Other providers, such as TalkTalk,
Sky and Virgin Media, are yet to say if
they will reduce charges for non-internet
customers.
How do I know how much I am
paying for my landline?
Since October 2016, broadband providers have been obliged to advertise the
overall cost of their service. Until then,
they had been able to claim their broadband costs were just a few pounds —
detailing in the small print that this
excluded the line rental fee, which often
added almost £20 to the monthly bill. The
Advertising Standards Authority ruled
that such practices were misleading.
However, some companies, such as
BT and TalkTalk, responded by presenting broadband customers with a single
overall figure that did not show how
much they were paying for their landline.
NO LANDLINE, NO INTERNET
YOU DON’T KNOW WHAT YOU’VE GOT TILL IT’S GONE
TANETH
EVANS
If I had been asked a month
ago if I needed a landline,
my response would have
been an unequivocal no.
I have not used a
conventional phone since
I got my first mobile, circa
2001. However, when the
Beast from the East raged
across London, it took away
my phone line — and with it
my internet service.
The weeks since then
(two and still counting)
have starkly exposed our
reliance on the fixed-line
broadband.
Our smart alarm system
lost any concept of time,
so we overslept the morning
after the line went down.
I work in journalism but
without my voice assistant
to read the news aloud as
I dressed, I arrived at the
office wildly underprepared
each day for the first week.
Now I am getting up an
hour earlier to read the
news instead.
We still can’t use catch-up
television, Netflix or Spotify.
The house has fallen silent.
I also work a lot from
home, which cannot be
avoided, but to get any work
done I am having to use my
smartphone to access my
mobile data. We are halfway
through the month and
my phone bill, usually less
than £50, is well into the
hundreds of pounds.
I can no longer add extra
data to my plan for this
month (I have hit the
maximum), so I am being
charged per megabyte;
each tweet sent or email
received is eating into my
savings and causing me
sleepless nights.
In the meantime, TalkTalk,
our provider, has taken no
steps to find a solution. In
fact, we are still paying for
our non-existent
connection.
Asked for a comment last
week, the company said it
was investigating the case
and would “continue to
liaise” with my partner,
in whose name the account
is set up.
We already resented the
idea of paying for a landline
we would never want to use,
but now that the only useful
thing it facilitates has fallen
over, it is completely
redundant.
All the while, we spend
longer hours in the office,
spend ever more money
on mobile data for simple
tasks such as reading the
news and wonder — every
evening — if we will ever get
to see what happens in the
next episode of The Crown.
So do I like fixed-line
broadband services? No.
Do I want to pay for
them? No.
Could I live without them?
Never again.
How easy is it to ditch your landline?
Most broadband providers use BT’s
copper-wire phone network to deliver an
internet connection to homes, so line
rental is almost always included when
people take out a broadband package.
“Your landline charges go towards the
maintenance of these lines, even if you
no longer use them to make a voice call,”
said Vix Leyton at the comparison service Broadbandchoices.
Even fibre-optic broadband services,
which are faster, still use the old copper
landline network for the final stretch of
the line leading into a home.
About 1m properties in the UK — 3.7%
of the total — have a 100% fibre-optic service at present, according to Ferguson,
but this proportion is rising rapidly.
Virgin Media is the only large provider
to offer a broadband-only service without
the need for a landline. Its cheapest deal
costs £33 a month for a standalone 50Mb
service, after its introductory discount of
£26 for 12 months. Its equivalent broadband and landline service, which
includes free weekend calls on the fixed
phone line, costs £40 a month after being
discounted to £29 for the first 12 months.
Other broadband-only providers
include Hyperoptic and Gigaclear, but
they are not available nationwide.
Another possible solution is to use
mobile broadband: connecting to the
internet using the 3G or 4G networks
used by mobile operators. Most smartphones allow you to turn your handset
into a wi-fi hotspot so you can share your
internet connection with other devices
such as your PC.
Make sure you have a high enough data
allowance on your mobile plan as going
over it can be expensive — as Taneth
Evans has found out (see below).
Mobile broadband tends to be unreliable and can often cut out, however. You
must also live in an area with a good 3G
or 4G signal, preferably the latter. To
find out about coverage in your area,
use Ofcom’s broadband and mobile
checker app.
It is possible to make calls over the
internet using voice over internet protocol (Voip) services such as Skype or Viber.
Voip converts your voice to digital signals
and sends the data down your broadband
line or over the mobile network. The
main advantage is that calls to anywhere
in the world can be cheap or even free.
You will need to download software
and attach a microphone to your PC — or
use your mobile. You can also use Voip
through apps such as WhatsApp or Facebook Messenger.
@alihussainST
My phone’s an antique — maybe
that’s why it’s so expensive,
Peter Conradi, page 20
YOUR STORY
Could you live without your
landline?
Email money@sundaytimes.co.uk
14
The Sunday Times March 18, 2018
MONEY
BRIEFING
CHILDCARE VOUCHER SHOPPERS STRUGGLE INFLATION BASKET:
DEADLINE EXTENDED TO COUNT PENNIES
QUICHE IN, EDAM OUT
If you would like to receive the
free weekly Money email bulletin,
visit thesundaytimes.co.uk/
moneybulletin. The bulletin is
exclusive to digital subscribers.
The deadline to join the
childcare voucher scheme
has been extended by six
months. Parents now have
until October to apply for the
employer-backed vouchers.
The scheme was originally
supposed to close to new
entrants next month, as part
of a government shake-up
in childcare subsidies. The
vouchers are being replaced
by tax-free childcare
accounts at gov.uk. The
accounts are available only
to households in which both
parents work and neither
earns more than £100,000.
Contact us Money,
The Sunday Times,
1 London Bridge Street
London SE1 9GF
Email money@sundaytimes.co.uk
Advertising If you would like to
buy an advertisement in Money,
email Paul Douglass at
paul.douglass@news.co.uk
or call him on 07917 598 422
A third of adults in England
are unable to calculate their
change correctly when they
go shopping, according to
University College London
and Cambridge University.
NS&I RAISES RATE
FOR JUNIOR ISA
National Savings &
Investments has increased
the interest rate on its junior
Isa from 2% to 2.5%. For
more on Isas, don’t miss our
Isa Special inside.
What do women’s leggings,
quiche, an action camera
like a GoPro and moisturising
lotion have in common?
They have all been added to
the basket of goods and
services used by the Office
for National Statistics to
calculate inflation. The
basket is updated each year
to reflect modern spending
habits. Raspberries, high
chairs and ready-made
mashed potato have also
been added. Pork pies, Edam
cheese, “a bottle of lager in
a nightclub” and peaches
have been removed.
People are
being asked
to try out for
jobs that
don’t exist
Stewart
McDonald, a
Scottish National
Party MP, says unpaid trial
shifts should be illegal
£236M LOST IN BANK
TRANSFER SCAMS
HOW THE FOOTSIE
HAS PERFORMED
A total of £236m was paid
to fraudsters using bank
transfers last year, but only a
quarter was reimbursed to
victims, according to the
trade body UK Finance. This
is the first time data on
so-called authorised push
payment scams has been
released. The fraud involves
people being tricked into
transferring their cash to a
con artist masquerading
as, say, a solicitor during a
property transaction. There
were 43,875 reported cases
of the scams, with victims
losing an average of £2,784.
The FTSE 100 fell 61 points to end the week at 7,164, as rising
tensions between Russia and western countries spooked
investors around the world.
-3.4%
over a year
(up 0.1% with dividends)
+5.3%
over three years
(up 18% with dividends)
five years
+10.4% over
(up 32.9% with dividends)
10 years
+27.2% over
(up 84.8% with dividends)
Inflation: in January CPI was 3% and RPI was 4%
When it comes to
parental leave, dads
are the poor relations
Just 2% of fathers
have taken shared
leave. Ruth Emery
asks how more men
could be persuaded
to follow their lead
You will have heard about the challenges
faced by working mothers — but what
about the dads?
This Tuesday the parliamentary
women and equalities committee will
publish a report highlighting the difficulties that fathers have in balancing their
careers with childcare duties. It will warn
that fathers need to be better supported
in their jobs and will make a series of recommendations to the government.
According to the committee, chaired
by Conservative MP Maria Miller, sharing
caring responsibilities between parents
is the key to reducing the gender pay gap.
Companies with 250 or more staff are
reporting the difference between how
much their male and female employees
earn — a comparison that is made across
the board rather than between men and
women doing the same job. More than
2,400 businesses have uploaded their
data to a government website — ahead of
the April 4 deadline — revealing a national
mean average gap of 12.4% so far.
The committee’s report will coincide
with the three-year anniversary of the
launch of shared parental leave. The
scheme aims to encourage fathers to take
more responsibility for caring for their
babies, by allowing couples to split
almost a year of leave following the birth
or adoption of a child.
Take-up has been woeful, however.
Last month the Department for Business,
Energy & Industrial Strategy said it could
be as low as 2% of the 285,000 eligible
couples every year. As a result, the government has launched a £1.5m publicity
drive for the programme, with “share
the joy” advertisements popping up on
social media and billboards.
So, what are the stumbling blocks for
fathers who want to play an active role in
their child’s life?
First, many employers pay more than
the statutory amount for maternity leave
(see panel) but only the same statutory
sum for shared parental leave, so it does
not make financial sense for families to
swap maternity pay for a lower income.
Second, as the Liberal Democrat deputy leader Jo Swinson points out, fathers
face more of a stigma for taking time off
and there is less chance their requests for
flexible working will be approved.
“The cultural assumption of who does
what is very deep-rooted,” Swinson told
Money. “Post World War II we had a revolution, with lots of women entering the
workplace. But we never had a revolution
at home, so women have still been going
to work and doing childcare duties — or
outsourcing it. This has led to stereotypes
of mothers being better and fathers being
hapless and a bit rubbish.”
While the take-up has been low, those
men who have used shared parental
leave — often because their boss is paying
them more than the statutory rate — sing
its praises.
“I didn’t want my children to assume
Mummy stays at home and Daddy goes to
work,” said Andy Piggott, head of credit
cards at TSB, whose daughter Clara was
one of the first babies whose parents
were eligible for the scheme.
Piggott and his wife Rebecca Walton,
both 38, decided they would split their
leave so Walton, a marketing director,
would take 10 months off work after the
birth of Clara in May 2015 and Piggott
would take the following two months.
Jim Bloomfield used shared parental leave to spend six months with his family and go to Texas with his son Seb
“Having this time with my daughter —
and my son Henry, who was 4 at the time
— was great. The message it sends to them
about gender roles was really powerful
too,” he said.
Piggott, from Bray in Berkshire, said he
had been worried about taking the leave
as it was not seen as “normal” and he was
concerned about the impact on his
career. “The perceptions were really just
in my head, though. Everyone’s been
great. And longer term it’s made me a
better manager as I’m more understanding of parents’ needs.”
Jim Bloomfield, a 39-year-old chartered accountant from Leeds, took nine
months off to be with his son Seb last
year. He and his wife, Louise, 38, spent
six months together on leave. Then
Bloomfield used accrued holiday from
STATUTORY PAY RATES
l Statutory maternity pay is 90%
of average weekly earnings for the
first six weeks, then the lower of
£140.98 a week or 90% of earnings
for the following 33 weeks
l Statutory paternity pay is £140.98 a
week or 90% of earnings, whichever
is lower, for one or two weeks
l Shared parental leave is the same
rate as paternity pay, but for 39 weeks
his employer Deloitte to spend three
more months with Seb while his wife
returned to work as a partner at a law
firm.
Bloomfield said it was a once-in-alifetime opportunity to have the time
together. The family travelled to Texas
when Seb was eight weeks old and spent
almost a month driving round national
parks and watching live sports.
“We were lucky our employers gave us
a financial reward for taking shared
leave,” he said. Deloitte pays the same for
maternity and shared parental leave:
16 weeks at full pay then 10 at half pay.
“I wanted to help Louise achieve her balance with work. Plus I wanted to spend as
much time with Seb as possible.”
A survey by Money has found that 70%
of people believe the government and
employers should do more to help working fathers, while 60% said the focus was
too much on working mothers and dads
have been overlooked.
Research by the charity Working Families revealed that 53% of millennial
fathers want to downshift to a less stressful job because they are struggling to juggle the demands of work and family life.
“Fathers often find it difficult to get the
balance they want,” said Jonathan Swan,
head of research at Working Families.
“Some of this is cultural — for example,
the way men are treated by colleagues
when they do things like leave early to do
a pick-up. Although this is often dismissed
as unserious ‘banter’, the underlying discourse is one that reflects traditional gender values and expectations: ‘It’s not a
man’s job to take on a mother’s role.’ ”
The Fatherhood Institute think tank
reports that working dads in Britain are
dissatisfied; many say they spend insufficient time with their young children.
Jeremy Davies at the Fatherhood Institute said: “Until we grasp the nettle of
supporting working fathers to play a significant role in bringing up their children, they will stay on the sidelines in the
domestic arena — and working mothers
will remain at a disadvantage in the workplace, suffering from pregnancy discrimination and the gender pay gap.”
Swinson said both employers and government should celebrate working mothers and fathers — rather than treat them
as a burden — by allowing flexible working and paying higher rates for paternity,
maternity and shared parental leave.
Working Families is campaigning for
paternity leave to rise from two to 12
weeks, with the first four at 90% of earnings, followed by eight weeks on statutory pay. Swan said: “We think this means
more fathers will use it — and continue to
be involved with their children’s care
later on.”
YOUR STORY
Have you taken shared parental leave?
Email money@sundaytimes.co.uk
Victory for Money: bitcoin exchange
promises to pay out profits faster
Coinbase is
revamping its
clunky withdrawals
system to help
UK customers
Ruth Emery
One of the world’s biggest
cryptocurrency platforms is
overhauling its payments
system to make it easier for
UK customers, after Money
warned that users faced long
delays in getting their hands
on their cash.
Last week we reported
that Coinbase customers
were struggling to withdraw
their money because of the
platform’s complicated
verification system.
Some were waiting months
to get their profits after
investing in currencies such
as bitcoin, ethereum and
litecoin.
Sanjiv Ingle, of Brentwood,
Essex, said he had invested
£400 in cryptocurrency
through Coinbase last
summer. He made a profit
of almost £4,500, but hit
trouble when he decided to
withdraw his cash in January.
“It is easy for them to debit
your money and allow you to
purchase more transactions,
but withdrawing money is a
problem,” said Ingle, 50,
who is head of client
management at a bank. “This
is a source of frustration for
many investors.”
Following our article, the
San Francisco-based
platform, which says it has
more than 10m users,
announced it was installing
the British faster payments
scheme so “UK customers
will benefit from faster, safer
and seamless bank transfers”.
Coinbase said it was the first
digital currency exchange to
use the scheme.
The faster payments
system allows banks and
institutions to send money
to each other 24 hours a day,
every day. Payments are
almost immediate, but can
take up to two hours.
Coinbase is already
offering the service to large
investors and will roll it out
to all UK customers in the
coming weeks.
The scheme will replace
the EU electronic payments
system Sepa, which was
clunky for British investors to
use as it required a payment
in euros to be made before a
withdrawal could be
processed.
Coinbase also revealed
that it has been granted an
e-money licence by the
Financial Conduct Authority.
Zeeshan Feroz,
chief executive of Coinbase
UK, said this was an
important step in “making
cryptocurrency accessible to
everyone”. He added: “We
Our report on the cryptocurrency site Coinbase last week
are committed to making sure
customer funds are always
secure and our e-money
operations now have
safeguards and operational
standards [on a] par with
other regulated financial
institutions.”
As part of this, customers’
balances were separated
from Coinbase’s own funds
and kept in separate bank
accounts, he said.
Jonathan Rogers, head of
the financial services
regulatory group at the law
firm Taylor Wessing, said in
order to become mainstream,
cryptocurrency firms must
work with other banks and
payment systems.
“Demonstrable
compliance forms part of
this process,” he said.
While Coinbase is making
efforts to improve its
reputation and put in
place certain consumer
protections, it is important
to note digital currencies
are notorious for scams.
Investing in them is not
for the faint-hearted. The
Financial Conduct Authority
does not regulate
cryptocurrencies or any of
the platforms that sell them.
Last week Google said it
would ban cryptocurrency
advertising from its search
results and YouTube in June.
The move followed a warning
about the currencies from
Christine Lagarde, head of
the International Monetary
Fund. She said the rapid
growth of crypto-assets was
“dangerous” and a
“challenge” that would need
international co-operation.
15
The Sunday Times March 18, 2018
MONEY
I’m drinking for Britain, barman –
give me two of those foaming flagons
UK companies are being shunned as we near Brexit Day. But these two brewers could be worth a punt whatever happens next March
TOM MERTON
laws were blamed by many publicans in
the countryside for putting them out of
business. Against that, substantial corporate debt remains a worry for Greene
King, while competition from in-home
entertainment is a big problem for the
pub trade as a whole.
While looking at this sector, I noticed
that my favourite brewer, Fuller Smith &
Turner, was trading towards the bottom
of its 52-week range, despite delivering
double the profit margin and return on
investment achieved by JD Wetherspoon.
The latter’s valuation looked frothy to me
f this column had a mission state- before a “cautious” trading statement —
ment, it would be: “I can’t always warning of higher pay, tax and utility
be right but I can always be differ- costs — knocked 6% off its price on Friday.
ent.” Being out of step with the
So I also pulled some Fullers at 942p a
crowd can prove profitable for share. Although this west London brewer
investors, helping us to adhere to is much smaller than Greene King, with a
the fundamental aim of buying low stock market capitalisation of about
and selling high, or vice versa. Eight £300m, it is seen as less risky and its
years into a bull market — a period shares are priced at 15 times corporate
of rising prices — there aren’t many earnings. The dividend yield is 2%.
opportunities left to go against the herd
I raised the money by taking profits
and invest in sectors that others snub.
from InterContinental Hotels Group, in
However, I think I may have found one which I sold some shares at £45.88, and
and, better still, it’s an opportunity to the Finnish lift and escalator engineer
“back Britain” in a business where I have Kone, in which I sold shares at €41.49
been a happy customer for decades.
(£36.32). I also liquidated a longstanding
As regular readers will know, inter- holding in BlackRock Emerging Europe
national diversification — buying foreign at 376p because about half this investshares such as Boeing, McDonald’s and ment fund’s assets are allocated to Russia
Adidas — has been one of my most suc- and I no longer wish to invest there.
cessful strategies since 2014. Now, after a
None of the stocks sold offers the same
series of surveys showing the UK is the income as the average yield of 4.4%
least-loved and most-shunned big stock across my two new stakes in these British
market in the world, perhaps the pen- brewers. Greene King looked extremely
dulum has swung too far.
cheap, with a price/earnings ratio of 6.9 —
As discussed here before, Brexit and or much the same as its dividend yield.
the prospect of a government led by
This would be a good point to emphaJeremy Corbyn remain big areas
sise that low prices and high yields
of
uncertainty.
However,
can be warnings of trouble to
“remoaners” including me
come. Share prices can fall
may prove to have been
without warning and diviexcessively
pessimistic
dends may be cut or canabout the long-term effect
celled. So, while Fullers
A
wise
person
should
on some British shares if
looks a relatively safe bet,
have
money
in
their
we leave the EU as schedGreene King could prove
head, but not in
uled next March.
a “value trap” — a share
their heart
So I have invested in a
that looks tempting but
Jonathan Swift
£1.5bn Suffolk-based comturns out to be cheap for a
pany — one due to celebrate
reason. Just because its price
its 220th anniversary next year —
has plunged doesn’t mean it can’t
at the same share price at which it
fall further. No wonder City cynics say it
traded six years ago. Its dividends also is dangerous to try to catch a falling knife.
offer an intoxicating yield of 6.8%.
On a brighter note, I cannot resist
Yes, you’ve guessed it: I bought into reporting that Dignity — the funeral serthe brewer Greene King. Although it has vices provider in which I invested last
been quenching thirsts for centuries, the month after its shares had fallen by 73%
shares had become so unloved that I paid from their 52-week peak — seems to be
490p — or 20% less than they cost a dec- showing signs of life.
ade ago. Everyone knows pubs are closJust before the February 5 “flash
ing up and down the country, but I sus- crash”, or global stock markets plunge, I
pect that trend may be nearing its end as paid 753p per share. After Dignity issued
the duds have been shaken out and good trading figures last week, its share
demand rises for those that remain.
price was 991p at close on Friday. I expect
Certainly, the Greene King houses I see this recovery to continue, despite a price
in London are doing good trade. Even war in the funeral industry. Whatever
when excitable headlines predict doom other woes may afflict the British econand gloom for the economy, these places omy, people are unlikely to stop dying.
are packed with millennials paying £5 or
Returning to Fullers and Greene King,
more for a pint — prompting the thought these two stakes amount to about 2.5% of
that pubs could prove an unexpected my portfolio. So, even if my booze bender
beneficiary of the fact that fewer young proves to be an embarrassing example of
adults now have mortgages to pay.
premature speculation, it shouldn’t leave
If fully autonomous cars ever do take me with too much of a headache.
over our streets, that might change the ian.cowie@sunday-times.co.uk
outlook for rural pubs; the drink-driving or @iancowie
PERSONAL
ACCOUNT
IAN COWIE
I
Pulling power: mortgage-free millennials are splashing their spare cash in pubs. The industry could also ultimately benefit from the advent of driverless cars
490p
73%
Price of Greene King shares on
March 9, 20% down on a decade ago
People letting properties
through Airbnb or selling
products on eBay need to get
their tax affairs in order,
because the chancellor has
announced a crackdown on
those making money from
the digital gig economy.
Philip Hammond, who
used last Tuesday’s spring
statement to declare he was
“positively Tigger-like”
about Britain’s economic
prospects, said he would
call for evidence “on how
online platforms can help
their users to pay the right
amount of tax”.
Millions of people use such
internet platforms to earn
extra income. However, only
half believe they know
enough about the tax system
to pay any money due,
government research shows.
The call for evidence will
close in June. It will cover
sites such as the property
letting platforms Airbnb and
SpareRoom; the ride-hailing
apps Uber and GoCarShare;
the marketplaces Etsy and
eBay; and sites on which
people can sell their time or
skills, such as TaskRabbit.
HM Revenue & Customs
(HMRC) said: “Many of those
earning money through a
platform may never have
made money without an
employer as an intermediary
between them and HMRC.
“They may have no
experience of reporting
income directly to HMRC,
and it is right we explore how
best to support them.”
Other countries, including
France and Belgium, have
already introduced measures
to make it easier for online
traders to pay the correct
amount of tax, HMRC said.
What could the
crackdown mean?
“Platform users often believe
generating a bit of extra
money from the casual selling
of goods or services is not a
taxable activity. This is not
the case and HMRC is clearly
looking to combat this
misconception,” said Paul
Falvey, tax partner at the
accountancy firm BDO.
The government already
has powers to force UK-based
platforms to provide details
of its customers, but this
could be extended to non-UK
websites, said Falvey.
“HMRC also suggests that
perhaps intermediaries
should notify users of their
tax obligations every time
they carry out a transaction.
“There is a difficult balance
between putting further
We hear a lot about minority
groups these days — and
quite right, too — but one
is rarely mentioned:
income-tax payers.
According to HM
Revenue & Customs,
only 29.9m of the United
Kingdom’s 65.6m people
now pay income tax — down
from 32.5m a decade ago.
True, 37% of the
population is aged either
under 15 or over 65 — and
everyone pays VAT or
other duties on the goods
and services we buy.
But it is still remarkable
that most of the population
no longer pay a penny
into what remains the
government’s biggest
source of revenue.
So the chancellor Philip
Hammond could be
forgiven for boasting in his
spring statement last week
that the Conservatives have
freed millions of people
Share price drop at the funeral firm
Dignity before Ian Cowie invested
from having to pay any
income tax by raising
the personal allowance
since 2010.
The present system is
certainly simpler than the
circular paper chase created
by Gordon Brown when he
was chancellor, in which
people with low incomes
were taxed and then had
to fill in forms to claim some
of it back.
Hammond should be
careful, however, about
the unintended political
consequences of Tory
reforms. Nearly doubling the
starting point for income tax
from £6,475 in 2009-10 to
£11,500 now (and £11,850
from April 6) means fewer
people have any personal
experience of this state
expropriation of earnings.
So these voters might
not care how high rates
could be raised by the
shadow chancellor John
McDonnell, who remains
enthusiastic about tax-andspend policies. If that proves
true, a key beneficiary of the
Tories’ fiscal reforms might
be the Chairman Mao fan
McDonnell.
PROMOTED CONTENT
60 SECOND
INVESTMENT BRIEFING
ST DIGITAL
Read a breakdown of Ian Cowie’s
‘forever’ fund
thesundaytimes.co.uk/cowieholdings
Are you an Airbnb host or an eBay
seller? Tigger Hammond is on your tail
The chancellor is
threatening a tax
clampdown on
the gig economy,
writes Ruth Emery
CAREFUL, PHIL
TORY TAX POLICY
COULD HAND
LABOUR A VICTORY
Philip Hammond, who has
been likened to Eeyore,
says he is now ‘Tigger-like’
obligations on international
businesses — which impairs
the UK’s tax competitiveness
— and ensuring the Treasury
gets its fair share of tax.”
What tax should I pay?
Website traders and those
letting a spare room or an
entire property should in
theory complete a selfassessment tax return and
pay income tax on profits.
However, two allowances
introduced in the current tax
year could reduce any
liability to zero.
Individuals can receive up
to £1,000 a year tax free in
property-related income,
such as letting a room or
car parking space.
There is also a separate
£1,000 allowance for trading
activities, such as buying and
selling items online. The
government estimates up to
700,000 people could benefit
from these allowances.
HMRC says individuals
must keep a record of such
activities, but as long as
income in each category is
below £1,000, there is no
need to declare it on
tax forms — or to register for
self-assessment if they are not
otherwise required to do so.
The property allowance
cannot be used if you already
use the rent-a-room relief
scheme, under which the first
£7,500 earned each year from
letting a furnished room to a
lodger or through a site such
as Airbnb is tax free.
You could use all three
perks for different things: say,
earning £1,000 tax free from
selling handcrafted wooden
penguins on Etsy; £1,000 tax
free for letting your garden
for weddings; and £7,500
from letting a spare room.
What else was in the
spring statement?
The government launched a
consultation looking at coins
and banknotes in circulation.
However, any plans to scrap
1p and 2p coins were
scrapped a day later after a
media backlash.
The Treasury is also
considering whether to tax
single-use plastics such as
takeaway boxes and coffee
cups to reduce waste.
Ups and downs are
the new normal
Investors, hold your nerve: markets may be volatile but the
global outlook is good and you’re in it for the long term
Stay focused: ignore short-term volatility and keep an eye on the view in the distance
D
oing nothing is sometimes the
best policy. Investors who have
grown used to stock markets’
positive returns – world markets rose
each month in 2017 – may be feeling
queasy after the rollercoaster ride we
have experienced so far this year.
That does not mean you should
rush for the exit, however. “Markets
do not rise in straight lines,” says
Nancy Curtin, chief investment
officer of Close Brothers Asset
Management. “Our view is that 2018
will be a year in which world markets
deliver more modest returns and we
also expect the volatility to continue
– but it’s important to recognise that
ups and downs are absolutely
normal, even in a rising market.”
There are two main reasons why
investors should hold tight.
The first is that the global economic
outlook remains remarkably benign.
While markets have been spooked
in recent weeks by the fear that
US inflation will prompt a more
aggressive rise in interest rates than
expected, economists at groups such
as the International Monetary Fund
still predict that the global economy
will grow at its fastest pace since 2010.
Moreover, while political risk is
also a concern – Brexit in Europe
and President Donald Trump’s
protectionist policies in the US, for
example – volatility can create
opportunities for investment
managers, says Robert Alster,
Close Brothers’ head of research.
“When investors are nervous even
good companies get marked down,
which means they may offer
more value,” he says.
The second reason to hold your
nerve is that investment should
always be viewed as a long-term
pursuit. If you cannot accept the
possibility that the value of
investments may fall as well as rise,
especially in the short term, you
should have avoided assets.
Rather than worrying about
short-term volatility, focus on
long-term goals. If you are investing
over 20 years to build a pension, say,
a few months of ups and downs
is largely irrelevant.
This is not to suggest that you
should ignore risk altogether.
Instead, you should aim for a
diversified portfolio, with savings
spread over shares, bonds and an
alternative investment such as
property. This will protect you from
volatility in any one area.
Also consider regular savings
schemes through which you invest
a fixed sum each month. These can
help smooth out market ups and
downs, as your cash investment
buys more shares in months when
prices have fallen, which helps
you recover more quickly when
the upside returns.
With further turbulence likely,
investors need to keep their eyes
on the long-term prize. The cost
of trying to second-guess the market
is likely to be much higher than
staying in the market.
To start planning your future,
visit closebrothersam.com
(the value of your investment may
go down as well as up)
16
The Sunday Times March 18, 2018
MONEY
Signed,
sealed,
delivered?
Not exactly
QUESTION
ON
OF MONEY
EY
LEY
JILL INSLEY
Fighting your financial
and consumer battles
P
lease could you try to knock
some sense into my neighbour’s
bankers? She is 86 and partially
sighted. Her bank, HSBC, closed
her local branch in Ventnor, on
the Isle of Wight, some years ago and,
because of her failing eyesight, she is
unable to type her Pin into a cash
machine. For a couple of years she
made a 20-mile round trip by bus once
a fortnight to the nearest branch in
Newport to withdraw cash.
For a further two years, I drove her
to Newport. Eventually, we decided it
would be better if she could withdraw
cash at the local post office. We met two
bank tellers in Newport on two different
occasions who were very helpful and did
their best, but it took four months and a
formal complaint for this facility to be
set up. The bank paid her £100 to
apologise for the difficulties we had.
She can now withdraw £100 a day at the
post office using her chequebook.
My neighbour has just gone into a care
home that charges £91 a day. We tried to
set up a standing order to pay her fees
and I posted the request to HSBC in
Newport. But the bank refuses to accept
her signature on the standing order and
wants her to go to her nearest branch to
do another specimen signature.
BUY PRINTS OR SIGNED COPIES OF ROB MURRAY’S CARTOONS FROM OUR PRINT GALLERY AT TIMESCARTOONS.CO.UK
Since I am now without a car we
could go to Newport by taxi. But there
shouldn’t have been a problem with the
signature. I have seen the one the bank
has on record. I was also present when
she signed the standing order request
and it was a good approximation of her
usual signature. There might have been
a discrepancy in size and orientation —
it’s difficult to maintain a consistent
signature when you can’t see.
If the bank is not going to accept her
signature, it seems we will have to go to
the post office every day that it is open
to withdraw cash to pay her care home
fees. We are arranging a power of
attorney, but this should not have been
needed for such a simple transaction.
Jill replies
It is good that your neighbour is setting
up power of attorney — this should make
it easier for you to help her. This case
involved a misunderstanding that could
have been resolved easily through a
phone call, but HSBC refused to speak
to you because you did not have the
correct authority to represent your
neighbour.
You had sent the bank a copy of the
weekly care home fees that your
neighbour and the matron of the
home had both signed, along with a
compliments slip for the care home.
You said: “I hoped that this would serve
to alert the bank to do what was
necessary to set up a standing order.”
HSBC replied, telling you your
neighbour’s signature did not match
the one the bank had on file and asking
her to go into the nearest branch to
redo her signature, bringing photo ID.
It also said it needed the details of the
beneficiary of the standing order — the
care home.
I asked HSBC to reconsider your
neighbour’s signature, pointing out that
if it did turn out to be forged, it must
surely be the first recorded case of
someone trying to forge a standing
order for care home fees.
HSBC apologised for the
miscommunication in its previous letter,
offered £150 for the inconvenience
caused and set up the standing order.
Overpaying my pension
In January my husband and I realised we
had overpaid our pension contributions
for the current and previous tax years.
I wrote to my pension provider Aviva
on January 13 and asked for a refund. It
avoided answering this request, but
HAVE
YOUR SAY
EDITED BY
RUTH EMERY
Silver linings
I am 67 and so pleased to
see that my attitude towards
work now has a demographic
title — I’m a silver striver
(“The march of the silver
strivers”, last week).
As a chartered engineer,
I made an attempt at
retirement in 2005. It lasted
four years. Serendipitously,
I got a call from a local
company asking for some
technical consultancy. I
jumped at the chance and,
eight years later, am still
working. I have clients in
China, the Middle East,
Europe and the UK, putting
32 years’ experience in my
specialist subject to good use.
My partner and I have just
inquired about another
mortgage — we hope to buy
our dream house and keep on
working. My first grandchild
is due in July and I’m feeling
chipper about work.
GM, Hamsterley Mill,
Co Durham
I am 76 and work as a
consultant surgeon. Since I
resigned from the NHS in
2005, I have continued to
help NHS patients in the local
private hospital and to treat
some private patients. I will
retire from surgery shortly,
to pursue a new career in a
start-up business with two
young graduates, supplying
directed me to the HM Revenue &
Customs website and said the next step
would be to calculate what charges
needed to be taken from my plan.
I am left feeling that Aviva does not
understand what I am asking for, but I
am nervous about phoning as I feel the
staff will be embarrassed when they
realise that they have not understood.
It will perhaps be only a short step from
there to refusing my request.
My husband’s pension provider
Scottish Widows has agreed to refund
his overpayments. I am not impressed
with Aviva.
Jill replies
Embarrassing Aviva staff is the last thing
you should worry about. Initially I
thought you were being hard on the
company but, given the number of
mistakes it made, I now think you
were justified.
Aviva told me it had written to you last
September to say you had exceeded the
allowance for the 2016-17 tax year. You
had contributed £69,062 gross, when
the annual maximum is the lower of
£40,000 or an amount equal to your
gross earnings during the tax year —
£38,577 in your case.
You did not qualify for a process
known as “carry forward”, which allows
people to mop up unused contribution
allowances from the three previous
years, so you asked for the overpayment
to be refunded instead. You also told
Aviva you had contributed a further
£1,796 gross to another pension, which
meant you were even further over the
contribution limit.
At the end of January you realised
you could find yourself in the same
predicament for 2017-18, so you asked
for a pension contribution worth
£10,000 to be cancelled.
Aviva failed to acknowledge your
request for a refund. Instead it told you
unnecessarily that if you did not respond
within four weeks, an annual allowance
charge would be calculated and taken
from your pension plan.
After reading the correspondence
between you, it seems clear that at least
one member of staff at Aviva did not read
your letters properly. I asked the
company to refund your overpayment
and five days later it called you to say it
would give you £24,388 after tax. You
again pointed out that you had paid
£1,796 into another scheme and Aviva
decided to increase your net refund to
incorporate this amount, although it
says it could have insisted you apply for
that from the other pension provider.
This meant your total net refund was
£25,825.
It also returned the cancelled £10,000
contribution and has paid you £150
compensation.
Aviva has made several mistakes,
but none of this would have happened
if you had not overfunded your pension.
You have done well to sort this out, but
I suggest you take advice from an
independent financial adviser to prevent
this kind of thing happening again.
CAN WE HELP YOU?
Please email questions to Jill Insley at
questionofmoney@sunday-times.co.uk
or write to Question of Money,
The Sunday Times, 1 London
Bridge Street, London SE1 9GF.
Please send only copies of original
documents. Letters should be
exclusive to The Sunday Times. Advice
is offered without legal responsibility.
We regret Jill cannot reply to everyone
who contacts her.
high-quality floor materials
— something of a change.
While I respect those who
wish to retire in their sixties,
I have a belief that it is better
to wear away than rust away,
provided you enjoy it.
BH, Ickham, Kent
I am 73 and have been an
IT developer since 1967. I
have been with my present
company since 2004. Even
now, I am expanding my
repertoire by moving into a
new area of technology.
My boss says I have a job
for as long as I want it. I earn
a good salary, get the state
pension on top and pay no
national insurance. Life
doesn’t get much better.
FY, Walton-on-Thames, Surrey
One could be forgiven for
believing that, following
retirement, those wishing to
continue working should do
so only for financial reward.
Let us not forget the
voluntary sector, which
has assumed even more
importance at a time of
national and local cutbacks.
In my home town, we
have developed a “good
neighbours” scheme that
arranges for volunteer drivers
to take people to hospital and
GP and dental appointments.
Voluntary work is highly
rewarding — not financially
but in the feeling you have of
helping others to improve the
quality of their lives
DC, Knutsford, Cheshire
It’s all very well wanting to
work into your seventies, but
are you able to? I tried to go
part-time at a large company
last year but wasn’t allowed
to, so I resigned.
If a large employer would
not accommodate it, what
hope is there for someone
who works for a much
smaller firm?
LC, Dursley, Gloucestershire
Peter Stanway is 72 and
still happily at work
Ruth Emery says: Thank you
for all your stories about
working into retirement. A few
readers have written to ask
how accessing a private
pension affects the £40,000
annual allowance.
We are happy to clarify that
if you take your 25% tax-free
lump sum — but do not enter
income drawdown — you can
still contribute the full
£40,000 (provided your
income is at least equal to
that figure).
However, if you do start
drawdown, the annual limit
drops to £4,000.
We love to receive your
feedback on stories and
your views on any issues
you would like us to
investigate. Always
include your name and
address when contacting
us. Letters may be edited.
WRITE TO
Money, The Sunday Times
1 London Bridge Street
London SE1 9GF
EMAIL
money@sundaytimes.co.uk
TWITTER
@ST_Money
17
The Sunday Times March 18, 2018
MONEY
Best Buys
CURRENT ACCOUNTS
FOREIGN
CURRENCY
CREDIT INTEREST
Provider
Account name
Account fee
Interest rate 1
Balance
Contact
TSB
Classic Plus
None
3% + £10 a month 2 £1-£1,500
0345 975 8758
Halifax
Reward
None
£3 a month
£1+
0345 720 3040
Nationwide
FlexDirect
None
5% 3
£1-£2,500
0800 302 010
Provider
Account name
Account fee
Interest rate 4
0% overdraft limit Contact
First Direct
1st Account
£10 a month 5 15.9%
M&S Bank
M&S Current Account None
These are the interbank
rates at 5pm on Friday,
which show where the
market is trading.
They are not indicative
of the rate you will be
able to get.
OVERDRAFTS *
Post Office Money Standard Account
None
£250
0800 242 424
15.9%
£100
0345 900 0900
14.9%
£0
0345 266 8977
EURO
GBP>EUR
1.13
1.39
1.33
1.80
1 Based on funding of £1,000 a month. 2 To receive £10 you must have two direct debits and make 20 card payments a month. 3 Introductory rate for one year, then 1%.
4 Equivalent annual rate. 5 Fee waived if minimum funding of £1,000 is met. * Based on overdraft of £500 for 15 days a month.
Some accounts require minimum funding/direct debits to open or receive rates shown.
Source: Moneyfacts.co.uk
AMERICA
GBP>USD
CREDIT CARDS
INTRODUCTORY RATES
Provider
Card type
Sainsbury’s Bank Purchase Mastercard
Halifax
30-Month Purchase Mastercard
Sainsbury’s Bank Dual Offer Mastercard
Introductory purchase
APR 1
Reward
Contact
0% for 31 months
18.9%
Yes
0808 540 5060
0% for 30 months
18.9%
No
0345 944 4555
0% for 30 months
18.9%
Yes
0808 540 5060
SWITZERLAND
GBP>CHF
BALANCE TRANSFERS
Provider
Card type
Introductory purchase Transfer fee 2
APR
Contact
MBNA
Platinum 36 Month Visa
0% for 36 months
2.49%
19.9%
0345 606 2062
Nuba
Transfer Mastercard
0% for 36 months
2.5%
19.9%
0345 606 2062
Tesco Bank
Clubcard Mastercard
0% for 36 months
2.69%
18.9%
0345 300 4278
AUSTRALIA
GBP>AUD
CASHBACK CARDS
Provider
Card type
APR 1
Cashback
Contact
28.2%
1%-1.25%. Intro 5% for 3 months
0800 917 8047
American Express Platinum Cashback Everyday 22.9%
0.5%-1%. Intro 5% for 3 months
0800 917 8047
0.5%
0800 389 9905
American Express Platinum Cashback
All in One Mastercard
Santander
21.7%
1 APR = annual percentage rate, dependent on credit rating. 2 Fee charged on the amount of each balance transfer during the introductory period.
Source: Moneyfacts.co.uk
Source: timescurrencyservices.co.uk
020 7294 7970
MORTGAGES
MONEY
MADE EASY
PROBE INTO
MOTOR FINANCE
2-YEAR FIXED RATES
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Sainsbury’s
1.24%
Fixed to 30.6.20
40%
£995
LV
0345 111 8010
HSBC
1.39%
Fixed to 31.5.20
20%
£999
LV
0800 494 999
Nationwide
1.89%
Fixed for 2 years
10%
£999
GLV
0800 302 010
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
HSBC
1.54%
Fixed to 31.5.21
40%
£999
LV
0800 494 999
Skipton
1.64%
Fixed to 31.5.21
25%
£995
LV
0845 850 1755
Barclays
2.19%
Fixed to 30.4.21
10%
£999
LV
0333 202 7580
Car finance companies
are being investigated
over whether they give
enough information to
buyers about the risks
involved. The Financial
Conduct Authority (FCA)
will also examine whether
consumers may be
harmed by the
commission paid to car
dealers by finance firms.
3-YEAR FIXED RATES
LONG-TERM FIXED RATES
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Sainsbury’s
1.79%
Fixed to 30.6.23
40%
£995
LV
0345 111 8010
HSBC
1.94%
Fixed to 31.5.23
20%
£999
LV
0800 494 999
Barclays
2.44%
Fixed to 30.4.23
10%
£999
LV
0333 202 7580
First Direct
2.69%
Fixed for 10 years
25%
£0
LV
0800 482 448
Deposit
Contact
What is car finance?
Personal contract
purchase is one of the
most popular ways to buy
a car. Buyers pay a deposit
and make repayments
over a fixed term, usually
12 to 36 months. They
can then return the car
or keep it by making a
final payment based on a
“guaranteed future value”,
which is set at the start of
the finance agreement.
Hire purchase is
another alternative to a
bank loan. The buyer puts
down a deposit and
makes a set number of
payments, after which
they own the car. There is
no final lump sum to pay.
TRACKERS */ DISCOUNTS
Lender
Rate
Scheme
Fee
Notes
HSBC
1.24%
Tracker +0.74% for 2 years 40%
£999
ELV
0800 494 999
Hinckley & Rugby
1.99%
SVR -3.9% for 2 years
£0
ER
0800 774 499
Nationwide
1.94%
Tracker +1.44% for 5 years 25%
£999
EGLV
0800 302 010
Hanley Economic
1.75%
SVR -3.44% for term
25%
£950
EL
01782 255 000
Contact
10%
FIRST-TIME BUYER / LOW DEPOSIT
Lender
Rate
Scheme
Deposit
Fee
Notes
Yorkshire BS
3.29%
Fixed to 30.6.20
5%
£995
DP
0345 166 9510
Hanley Economic
3.1%
SVR -2.09% for 2 years
5%
£250
PV
01782 255 000
Barclays
2.69%
Fixed to 30.4.21
0%
£0
FP
0333 202 7580
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Virgin Money
1.79%
Tracker +1.29% to 1.6.20
40%
£995
D
0345 605 0500
Post Office
1.91%
Fixed to 30.4.20
25%
£995
DV
0800 077 8033
Barclays
2.18%
Fixed to 30.4.23
40%
£1,950
R
0333 202 7580
BUY TO LET
Early repayment charge applies unless otherwise stated. * Most deals track Bank of England base rate. Notes: SVR = Standard variable rate;
D = £500 cashback; E = No early repayment charge; F = Family Springboard, 10% deposit must be in a Barclays Helpful Start account;
G = £500 cashback for first-time buyers; L = Free legal work for remortgages; P = Purchases only; R = Free valuation and legal work for
remortgages; V = Free valuation.
Source: landc.co.uk — 0800 373 300
Why is the regulator
concerned?
The FCA is worried about
the jump in car finance
deals, from 1.2m in 2008
to 2.3m last year. It has
raised concerns about the
way they are marketed,
particularly to people with
poor credit ratings who
may struggle to cover the
monthly costs.
SAVINGS ACCOUNTS
INSTANT ACCESS
Provider
Account name
Min deposit
Interest rate
Contact
RCI Bank
Freedom Savings
£100
1.3%
rcibank.co.uk
Virgin Money
Double Take E-Saver Issue 4
£1
1.3%
uk.virginmoney.com
Ford Money
Flexible Saver
£1
1.22%
fordmoney.co.uk
NOTICE ACCOUNTS
Provider
Account name
Notice period
Min deposit
Interest rate
Contact
Secure Trust Bank 1
180-day notice
180 days
£1,000
1.65%
securetrustbank.com
Paragon Bank
120-day notice (Issue 8)
120 days
£500
1.55%
paragonbank.co.uk
120-day notice
120 days
£1,000
1.55%
securetrustbank.com
Secure Trust Bank
1
1 Maximum three capital withdrawals a year subject to required notice.
CASH ISAS
INSTANT ACCESS
Provider
Account name
Min deposit
Interest Transfers in Contact
Nationwide
Single Access Isa
£1
1.3%
Yes
nationwide.co.uk
Virgin Money
Easy Access Cash E-Isa Issue 22
£1
1.21%
Yes
uk.virginmoney.com
What happens next?
The FCA will conduct a
mystery shopping
exercise to check whether
customers receive
enough information when
taking out motor finance.
It expects to finish its
review in September.
FIXED RATE
Provider
Account name
OakNorth Bank
12 Months Fixed Rate cash Isa 1 year
Term
Paragon Bank
Fixed Rate cash Isa
Min deposit Rate
£1,000
2 years £500
Transfers in Contact
1.52% Yes
oaknorth.com
1.67% Yes
paragonbank.co.uk
Source: Savingschampion.co.uk — 0808 178 5354
FIXED-RATE BONDS
Provider
Account name
Term
Min deposit
Interest rate
Contact
Ikano Bank
Fixed Saver
1 year
£1,000
1.85%
ikano.co.uk
Ikano Bank
Fixed Saver
2 years
£1,000
2.1%
ikano.co.uk
Vanquis Bank Savings
Fixed Rate Bond
3 years
£1,000
2.3%
vanquissavings.co.uk
DEALS ARE LISTED ONLY IF THEY ARE COVERED BY THE UK FINANCIAL SERVICES COMPENSATION SCHEME (FSCS) OR A EUROPEAN EQUIVALENT
Source: Savingschampion.co.uk — 0808 178 5354
CHILDREN’S ACCOUNTS
Provider
Account name
Account type
Min deposit
Interest rate
Contact
Halifax
Kids’ Regular Saver
Regular saver
£10-£100
4.5%
halifax.co.uk
Santander 1
123 Mini Current Account
Current account
£300
1%-2.96%
santander.co.uk
Cambridge
3-year Fixed Rate Bond (Issue 1) Fixed rate bond
£1,000
2%
cambridgebs.co.uk
1 Interest rates are tiered: 1% on balances of £100-£199; 1.98% on £200-£299; 2.96% on £300-£2,000.
ENERGY DEALS
JUNIOR ISAS
HOW TO
INVEST
Average annual bill
Rate
Contact
Tonik
£839
F
0333 344 2686
People’s Energy
£864
V
0131 285 5510
Economy Energy
£877
F
0333 103 9053
Source: TheEnergyShop.com — 01259 220 270
£10,000
Expert advice
for investors just
starting to build
a portfolio
Kelly Kirby
of Chase
de Vere
Each week we ask an expert
for tips on how to invest
£10,000. Here Kelly Kirby, a
chartered financial planner
for the wealth manager
Chase de Vere, offers her
advice for first-time
investors.
Kirby says beginners
should focus on developed
market equities. Only those
with more experience — or
more to invest — should add
exposure to other sectors,
such as Asia, emerging
markets, bonds and
commercial property.
Kirby, 42 — who lives in
Leeds with her husband,
Daniel, and their two
children, Reiss, 11 and
Theo, 6 — also assumes the
investor is saving for the
long term, at least five years
but ideally more, and is
willing to take some risks.
These are her three fund
selections.
Liontrust Special
Situations (up 6.7% over
a year)
I would invest £4,000 in this
fund, which has a good
blend of large, mediumsized and smaller UK
companies. It has been
managed by Anthony Cross
since its inception in 2005.
He was joined by Julian Fosh
in 2008.
The managers look for
companies that have a
strong brand image and
dominate their markets.
One of the top holdings is
Unilever, which owns
household names such as
PG Tips and Hellmann’s.
The fund also invests in
Diageo, which owns
Smirnoff and Guinness.
The fund tends to
perform well during
stock market volatility,
highlighting the managers’
ability to take defensive
positions when needed. This
could be helpful as there is
real uncertainty about
where markets are heading
over the next few months
and years.
The largest holdings
overall are in Glaxo Smith
Kline, Royal Dutch Shell
and BP, although it also has
19% in smaller companies.
The fund costs an average
of 1.11% a year. (As with all
three here, this is paid on
top of the charge levied by
your broker or platform to
make the investment.)
Old Mutual North
American Equity
(up 4.6%)
There is a strong argument
for using passive
investments to gain
exposure to the US. This is
where a fund follows a stock
market index rather than
using an investment
professional to make
decisions.
Passive investments can
be a good idea because
actively managed funds
struggle to beat the stock
market index in wellresearched, developed
markets such as America.
However, this actively
managed fund has a strong
track record of adding
value for investors, which
makes it better than cheaper
passive funds.
It holds about 200 stocks,
so is very diversified. The
largest holdings are
Alphabet (the owner of
Google), Exxon Mobil and
Apple. I would invest £3,000
here.
The average annual fee
is 1.09%.
JPM Europe Dynamic
(up 6.9%)
I would invest £3,000 in this
fund, which focuses on
European listed firms. It
tries to find undervalued
companies that others may
have missed and this has
been a successful approach.
Its biggest regional
exposure is to French
companies, accounting for
about 28% of the fund. It is
followed by investment in
firms in Germany,
Switzerland and Holland.
The fund benefits from
the insights of more than
40 European equity
investment specialists. Its
top holdings are in Novartis,
Allianz and BASF.
The average annual fee is
about 2.58%.
ST DIGITAL
Read our latest advice
for new investors
thesundaytimes.co.uk/
howtoinvest10k
Provider
Account name
Min deposit
Interest rate
Rate
Coventry
Junior Cash Isa
£1
3.5%
V
coventrybuildingsociety.co.uk
Nationwide
Smart Junior Isa
£1
3.25%
V
nationwide.co.uk
Tesco Bank
Junior Cash Isa
£1
3.15%
V
tescobank.com
V = variable rate. Source: Savingschampion.co.uk — 0808 178 5354
Contact
ICONS BY JAMIE JONES
Table shows the cheapest tariff from the 3 cheapest
suppliers.Excludes
suppliers.
Excludesfixed
fixedtariffs
tariffsof
ofless
lessthan
than12
12
months’ duration. Excludes tariffs that do not have
national coverage. Excludes tariffs where payments
are taken in advance of the customer coming on
supply. F=Fixed rate
ratesV=Variable
V=Variablerate
rates
Supplier
Top tip
Check your finance
agreement to see whether
payment protection
insurance has been
added. This is designed
to help you meet the
repayments if you are ill,
injured or lose your job.
However, many buyers
were mis-sold the cover or
did not realise a finance
company added it to their
agreement.
Ali Hussain
18
The Sunday Times March 18, 2018
MONEY
Puzzles
FEEDBACK
Comments about our puzzles
can be sent to puzzle.feedback@
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Editor, The Sunday Times,
1 London Bridge Street,
London SE1 9GF
GENERAL KNOWLEDGE JUMBO CROSSWORD 101
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1 A Buddhist shrine in Sri Lanka (6)
4 Freundel Stuart is the prime minister of this island (8)
9 Historical musical instrument, often played in an ensemble
with cornetts (7)
13 Founder of an American fashion house which celebrates its
50th anniversary this year (6,5)
15 Stages in the manufacture and distribution of a product (6,5)
16 A file used to speed up the production of digital documents
with consistent formatting (8)
17 To be of the same mind, or to happen simultaneously (6)
18 African member of the mongoose family (7)
20 German musical equivalent of lento (7)
22 Comic actor whose roles included Lord Flashheart in
Blackadder (3,6) (pictured)
23 Japanese port at the mouth of the Yodo River (5)
25 The team defeated by 38A (3,7,8)
28 Jewish calendar month in which the shofar is blown every
morning except on Shabbat (4)
30 Substances such as agar gel, as used in Petri dishes (7,5)
31 German art historian (1866-1929), whose library became a
research institute, now located in London (3,7)
34 Popular Christmas plant named after a US diplomat and
amateur botanist (10)
35 “Jumping bow”, as an instruction for string players (4,8)
37 Deer ticks are the vector for ____ disease (4)
38 Winners of the 2018 Super Bowl (12,6)
42 Rome’s ____ fountain is at the junction of three roads (5)
43 Naval battle at which Nelson was mortally wounded (9)
45 Washington’s state capital (7)
47 Latin for “tortoise”, also a formation of shields used as
protection by Roman soldiers (7)
48 Lower part of a ridge, between two peaks (6)
49 Instrument used for examining the ear (8)
52 Ibsen play, Et dukkehjem in (Bokmal) Norwegian (1,5,5)
53 Greek muse of dance, often
portrayed with a lyre (11)
54 A substance producing
colour, especially a powder
mixed with liquid (7)
55 A name for the period
approximately
AD500-1000 (4,4)
56 A fixed or unnatural grin
or grimace (6)
1 Global sporting goods retailer founded in France in 1976 (9)
2 Emma ____, anarchist deported by the USA to the Soviet
Union in 1919 (7)
3 White-spotted fish similar to turbot (5)
5 The maple and sycamore genus (4)
6 Flat round bread of Scottish origin (7)
7 Substances which remove moisture (10)
8 Luigi was a character in this 1985 Nintendo video game
(spoken form) (5,5,8)
9 Stephen King novel which followed his debut Carrie (6,3)
10 Decorative container for a flowerpot (8)
11 East London Thames crossing, opened in 1897 (9,6)
12 A religious or philosophical doctrine (5)
14 American feminist author of Sexual Politics (4,7)
19 Stretch of water in which the Exxon Valdez ran aground in
1989 (6,7,5)
21 A guitar body finish, an orange-yellow centre fading to a
black edge (8) (pictured)
24 1970s Austin car, noted for its “Quartic” steering wheel (7)
26 Former editor of The Times, 1967-81, later chairman of the
Arts Council (7,4-4)
27 In ballet, a bending of the knees while upright (4)
29 Region of France noted for crêpes and galettes (8)
30 House to which Juliet belongs in Romeo and Juliet (7)
32 Lead single from Pink’s 2017 album Beautiful Trauma (4,5,2)
33 Fleshy envelope surrounding a seed (4)
36 Ogden Nash completed this author’s unfinished work The
Scroobious Pip (6,4)
39 1982 single by Arrow, used in the film Blame It On Rio (3,3,3)
40 Comedy drama series set on the Chatsworth council estate (9)
41 The ____ du Midi is a mountain near Mont Blanc, with a
cable car service to the summit (8)
44 The lover of Acis, originally in Ovid’s Metamorphoses (7)
46 Scottish equivalent of mayor (7)
47 Walt Disney character who
said “When the baby moves
in, the dog moves out” (5)
50 Host city of the 2014 Winter
Olympic Games (5)
51 The original route of New
York State’s ____ Canal was
from Albany to Buffalo (4)
NEWS QUIZ
5
A UN survey found which
nation was the happiest?
6
Whose payroll
appropriately includes
four Heathers, three
Berrys and a woman
called Fuchsia?
1
Who had a spitting spat?
Solution to 100
To mark the puzzle number, TON was included somewhere in each across answer
Across: 1 Ton-up, 4 Arlington, 9 Tonga, 12 Edgbaston, 13 Eton College, 14 Aston Villa, 15 Baton Rouge, 17 Tonnage, 19 Stonemason, 23 Mrs Beeton, 24 Isaac Newton,
26 Breton, 28 Buttons, 29 At once, 32 Leg of mutton, 33 Ironstone, 35 Folkestone, 37 Tonlets, 41 Automatons, 43 China stone, 47 Quarter tone, 48 Long Eaton, 49 Elton,
50 Detonator, 51 Toner
Down: 1 The East, 2 Night, 3 Plain Jane, 4 Antoinette, 5 Lendl, 6 Nyet, 7 Too late, 8 Necromancy, 9 Tyler, 10 Naevus, 11 Alexei, 16 Soviet Union, 18 Nest eggs, 19 Sunsuit,
20 Ovett, 21 Stanmore, 22 Sneeze, 23 Mobile, 25 Arnside, 27 Orfeo, 30 Huckstered, 31 Forty-niner, 34 Senescent, 36 Send out, 38 Steiner, 39 Basque, 40 Strait, 42 Matin,
44 Helot, 45 Orton, 46 Venn
2
What is Operation Lime?
3
Who is offering discounts
to customers with an
avocado until Tuesday?
CONCISE CROSSWORD 1565
MARK MY
WORDS 99
1
2
3
4
Across
5
6
7
8
9
10
11
12
14
13
15
17
3
6
7
9
10
12
14
16
17
20
21
22
Down
Question (5)
Preacher (7)
Sewn border (3)
Craven (13)
A ballroom dance (5)
Operations room (7)
Published correction (7)
Brush (5)
Quarrelsome (13)
Yank (3)
Fatty (7)
Acclaim (5)
1
2
3
4
5
6
8
11
13
15
18
19
Fling (4)
Committed (8)
Leave (6)
Hybrid fruit (4)
Choke (8)
Germane (11)
Great work (11)
Property loan (8)
Over the moon (8)
Cognitive (6)
Fine spray (4)
Press (4)
16
18
4
7
Who says the penny
won’t drop?
Where have quiche and
chilled mashed potato
replaced Edam and a
pork pie?
Readers are invited to guess
what was said as these
primary pupils tried out some
virtual reality headsets last
week at their school in Hunan
province, China.
See below for how to enter.
Send your entries to: puzzle.entries@
sunday-times.co.uk by no later than
Tuesday. Entries should include a postal
address and ‘Mark My Words 99’ in the
subject line of the email. The best entry as
judged by The Sunday Times will win The
Chambers Dictionary of Great Quotations.
Terms and conditions: Competition closes at midnight on Tuesday.
Over-18 residents of the UK and ROI only. One entry per person. The
winner will be the best entry as judged by The Sunday Times. No cash
alternative to prize in whole or in part. Prize is non-transferable. Your
information will only be used for the purposes of this competition.
Promoter is Times Newspapers Ltd. Not open to staff of the Promoter
and promotional partner or their families.
8
What percentage of
British girls are
overweight or obese?
9
What is Great Ayton
Conservative Club doing
for the first time in its
108-year history?
10 Under what name did Ken
Dodd, pictured, who died
last week, make his
professional debut?
Last week’s winning entry, for
this picture of a topless
protester confronting the
former Italian prime minister
Silvio Berlusconi, was: “That
is not what I meant when I
said I needed a two-point
swing to the right.” It was by
Keith Ratcliffe, of Drayton
Parslow, Buckinghamshire.
19
20
Solution to 1564
Across: 1 Clodhopper, 8 Whimsical, 9 Run, 10 Rhyme, 11 Perfume, 13 Hubris,
15 Adults, 17 Handful, 18 Cobra, 20 Log, 21 Catchword, 22 To the point
Down: 2 Laity, 3 Disbelief, 4 Occupy, 5 Pal, 6 Rorqual, 7 Understand, 8 Worthwhile,
12 Radicchio, 14 Benight, 16 Blithe, 19 Brown, 21 Cut
21
22
CELL BLOCKS
8 x3
TRIPLE
IT
÷8
MEDIUM
130 x 2
DOUBLE
IT
- 1/3 – 6
+ 14 OF
IT
HARDER
343 ÷ 7 – 19
+ 9 + 10
SQUARE + 20%
OF IT
IT
+ 1/2
OF IT
–4
DOUBLE
IT
DOUBLE
IT
x2
DOUBLE
IT
+ 20 + 30 ÷ 3
÷5
–2
x 8 – 76
ANSWER ANSWER ANSWER
BRAIN TRAINER
EASY
Down
Just follow the instructions from left to right, starting with the
number given to reach an answer at the end
3
3
3
3
2 2 2
2
4
8
4
7
3
3
Divide the grid into blocks.
Each block must be square or
rectangular and must contain
the number of cells indicated
by the number inside it.
TETONOR
HARD
Each number in the main grid
can be formed by adding or
multiplying a pair of numbers
in the strip below the grid.
Each pair of numbers should
be used twice: once as part of
an addition and once as part
of a multiplication. For
example, a 10 and 24 in the
main grid may be solved by
the sums, 4 + 6 and 4 x 6,
respectively. Enter each sum
in the boxes below its answer.
Any blanks in the strip must
be deduced, bearing in mind
the numbers are listed in
ascending order.
126
33
26
13
23
182
27
81
32
27
176
42
36
15
30
18
2
6
9
13
21
POLYGON
From these letters, make
words of four or more letters,
always including the central
letter. Answers must be in the
Concise Oxford Dictionary,
excluding capitalised words,
plurals, conjugated verbs
(past tense etc), adverbs
ending in LY, comparatives
and superlatives.
How you rate
17 words, average; 23, good;
32, very good; 42, excellent.
19
The Sunday Times March 18, 2018
MONEY
MEPHISTO 3003
1
2
3
4
Across
Paul McKenna
5
6
7
8
9
1 Hong Kong is backing
chap with conviction from
one authority (4)
4 Here a cherub is
transfixed by grabbing
stick, perhaps (7)
10 Buy the farm in Australia
— bye-bye to Marianne et
les autres (5)
11 Common place to go for
indemnity (5)
12 Equestrienne’s clobber is
free, in good faith finally,
with tick (11, two words)
13 One of the little folk
beside deserted ditch (4)
14 Does tit flitter about in this
most rotten of woods? (7)
16 Nod as young blood
scoffed (6)
17 Voilà, near hustler is an
African giant (6)
19 This’ll raise the roof — eg,
Trigger in replays (11)
23 Issue standard delivery
for exercising inside of
moat? (6)
26 Dragon, say, close to
George for a start — way
out (6)
28 Condition in wage slave
wanting expected
deliveries to be fulfilled (7)
29 Turkish man abandoned
oil (4)
30 Everything good in
limiting telephonist’s
technique? (11, two words)
31 Note supplier with an
inner soul (5)
32 Church in large town
leaving Catholic sore (5)
33 Giggled due to notice
behind dagoba’s top (7)
34 Dry old nipper (4)
11
10
12
13
14
15
16
17
18
19
20
21
22
23
24
26
25
27
28
29
30
31
32
33
NAME
34
...................................................................................
ADDRESS ...................................................................................
...................................................................................
Post your solution to The Sunday Times Mephisto 3003, PO Box
29, Colchester, Essex CO2 8GZ, or email puzzle.entries@sundaytimes.co.uk. The first correct solution picked at random after
next Saturday wins Whitaker’s Concise, worth £25. Four
runners-up will each receive £20. The Chambers Dictionary 13th
edition is the primary reference. Readers may email comments
or queries to Paul McKenna at paul.auctor@gmail.com
Solution to 3002
Across: 1 Spat, 4 Alcopops, 9 Cotillon, 11 Absente reo,
12 Atheists, 15 Cited, 16 Taipei, 17 Adeems, 18 Piston, 20 Laid on,
23 Otary, 25 Tailskid, 26 Ordeal bean, 27 Peter Pan, 28 Firetrap,
29 Sole Down: 1 Sceatt, 2 Portraiture, 3 Tiber, 4 Alsike,
5 Contralti, 6 Premie, 7 Oersteds, 8 Snoods, 10 Hegemonical,
13 Spinhaler, 14 Risaldar, 18 Pop off, 19 Triene, 21 Asleep,
22 Na-Dene, 24 Tsars
SUDOKU
WARM-UP
1 Ruffled rascals keeping
back little fish (6)
2 Tease (cod) special young
’uns (8)
3 Successor stamped with
iron? (6)
4 Take readies, save
following lists from
Lossiemouth (5)
5 Urge reassessing a scene
of foolish condition (13,
four words)
6 A child with pluck outside
new cave in Germany (7)
7 Monkey about around old
feature of river (6)
8 ____’s replies starting
with those opening such
things (9)
9 Mean moonshine coming
up clear (6)
15 Prevailing price to enter
peeve (9, two words)
18 Routine pretence in
outlay (8)
20 International ensign
unfurled — a rare sign (7)
21 Beatnik's trouble having
embraced what’s
right? (6)
22 Peasant is keen on
expression of complaint,
say (6)
24 Votes in boxes? About
time (6)
25 Mug up on the early
flute (6)
27 Papa stuck into council —
flipping cool (5)
CROSSWORD 4790
David Howell
One of my favourite games
from the first half of the
Candidates tournament was
played by Vladimir Kramnik
in Round 3. With a series of
surprising yet instructive
moves, he created an
attacking masterpiece. I
recommend playing through
the following moves on a
board — if only to enjoy some
beautiful checkmating ideas.
White: Levon Aronian
Black: Vladimir Kramnik
Candidates Tournament,
Berlin 2018
Berlin Defence
1 e4 The first shock. Aronian
rarely starts this way, and his
decision soon backfires.
1…e5 2 Nf3 Nc6 3 Bb5 Nf6
The Berlin Defence… played
in Berlin! Kramnik brought
this opening into fashion and
indeed, it has become a fixture
in my repertoire since playing
against the man himself in
2002. 4 d3 Bc5 5 Bxc6 dxc6
6 0-0 Qe7 7 h3? This creates
an almost imperceptible
weakness — which Kramnik
spots. 7…Rg8! An astonishing
concept, although not quite a
novelty. White has committed
his king early, so Black will
simply push his g-pawn and
try to deliver checkmate. 8
Kh1 Nh5 Putting a knight on
the edge is frowned upon, but
such liberties can be taken
while the centre is closed. 9
c3 g5 10 Nxe5 g4 11 d4 11
hxg4 Qh4+ 12 Kg1 Ng3 is fatal.
11…Bd6 12 g3 Bxe5 13 dxe5
Qxe5 14 Qd4 Qe7! Keeping
momentum by avoiding
exchanges. 15 h4 c5 16 Qc4
Bad, but it is difficult to
suggest improvements. 16…
Be6 17 Qb5+ c6 18 Qa4 f5!
Accelerating play while White’s
queenside pieces sleep on their
starting squares. 19 Bg5 19
exf5 runs into 19…Nxg3+! For
example: 20 fxg3 Bd5+ 21 Kg1
Qe2 with a forced checkmate.
19…Rxg5 20 hxg5 f4 21 Qd1
Rd8 22 Qc1 fxg3 23 Na3 Rd3
24 Rd1 Bd5! Ever the
maximalist, Kramnik now
finds the most spectacular
finish. 25 f3 gxf3 26 exd5 26
Rxd3 leads to a stunning end:
26…Qxe4! 27 Re3 f2+ 28 Rxe4+
Bxe4 mate. 26…Qe2 27 Re1
g2+ White resigns 28 Kh2
g1Q+ 29 Kxg1 f2+ 30 Kg2 f1Q
mate is picturesque.
Spot the Move 1106:
White to play.
W________W
1
4
5
6
7
8
11
12
13
14
15
16
17
18
19
20
21
22
23
25
24
26
27
28
29
NAME
...................................................................................
ADDRESS ...................................................................................
árDWHWDWi]
àDWDW!W0p]
ßpDW0W4Wg]
ÞDqhP0WDW]
ÝpDWDBDWD]
ÜDWDWDPDW]
ÛW)PDWDWD]
ÚDKDRDW$W]
ÁÂÃÄÅÆÇÈ
...................................................................................
Across
Down
1 Build up a ship’s company
in speech (6)
4 Nick Queen’s supporter
going round in this city (8)
10 Cider seen splashed about
seat (9)
11 Performing in extremely
lively Southern city (5)
12 Well fed soldiers given
permission to enter gym (7)
14 Players getting boo ruined
first symphony’s intro (7)
15 Where chess players may
be sweeping (6-3-5)
18 Book with strange
predictions on what’s to
be done (3,11)
22 Value politeness (7)
24 Some angst or mental
agony (7)
25 Host runs out in skimpy
underwear (5)
26 Being complicated add
details (9)
28 Gentle exercise with a
climber (5,3)
29 What’s behind the
humour about a girl (6)
Variation from CaruanaMamedyarov, Berlin 2018.
Can you see why Black
avoided this position?
VERY HARD — PRIZE 1219
3
3 6 4
1
5
3
2
1 9 7
4
7
4
2
3 9 8
1
8 2
2
4
Hard
3
10
7
6 2
2
Jeff Pearce
9
Send your solution (first move only), to Sunday Times Spot the Move 1106,
The Sunday Times, PO Box 29, Colchester, Essex CO2 8GZ, or email to
puzzle.entries@sunday-times.co.uk. The first correct answer drawn after next
Saturday wins £20.
HARD — PRIZE 1218
6
Each row, column and 3x3
box must contain the digits 1
to 9. Winners will receive a
Collins English Dictionary &
Thesaurus.
CHESS
Down
1 Cultivated Indian
metropolis one managed
to tour (8)
2 An island, not an
iceberg (3)
3 Sends rude letters about
shed kit (9)
5 A doctor owes me?
Excellent! (7)
6 Iberian port fells a
hobbit (5)
7 Return to berth and help
delivery for guest? (4,7)
8 Help part of rhythm section
gives if failing to start (6)
9 Heartless vet’s a
loathsome creature (6)
13 Normal boy’s way to search
for a bit of chicken (7,4)
16 Deliberately show leg and
most of chaste model (2,7)
17 Curse a powerful piece of
music primarily about
America (8)
19 Triumphant expression
from drunk in this
place? (2,5)
20 Insulting term directed
against bishop in paper (6)
21 Free a traitor imprisoned
by soldiers (6)
23 Friar leaves cargo for
cardinal (5)
27 Boxer making comeback
in Manila (3)
Solution to 4789
CODEWORD
In the grid, each number
represents a letter of the
alphabet — all 26 letters are
used. Use the initial clues in
the code table to work out the
rest of the code.
STUCK? To get four random
extra letter clues, call 0901
322 5309 (ROI 1514 415128) or
text STCLUE to 84901 (UK
only). Calls cost 75p (ROI 75c)
plus your telephone
company’s network access
charge. Texts cost £1 plus
your standard network
charge. SP: Spoke, 0333 202
3390 (Mon-Fri 9am-5.30pm).
5
20
22
1
2
12
2
15
17
7
22
21
3
11
24
14
19
19
12
7
11
16
3
25
7
7
14
15
8
24
19
5
10
3
11
25
14
12
14
20
6
Send your solution to: The Sunday
Times Teaser 2895, PO Box 29,
Colchester, Essex CO2 8GZ or email
puzzle.entries@sunday-times.co.uk.
The first two correct solutions opened
after next Saturday win £20.
BRIDGE
14
22
22
7
26
3
22
13
23
21
19
25
4
7
18
19
13
16
7
15
7
23
15
7
7
12
22
3
8
3
22
14
7
19
15
16
11
14
20
22
15
/
.
v
,
25
2
3
4
5
6
7
8
7
N
W
15
16
17
18
19
20
21
20
16
/
.
v
,
22
12
12
19
20
A96
K53
AK96
Q54
25
19
22
18
9
10
11
12
13
22
23
24
25
26
S
KENKEN
E
S
P
14
Q5
J76
Q32
KJ932
Y
The bidding was
straightforward: 1NT — 3NT.
West leads the four of hearts.
What do you play?
It doesn’t seem to matter a
great deal. The declarer in
question argued that if West
held both the ace and queen
along with the ace of clubs it
would be better to play
dummy’s jack at trick one
(dropping the five from your
hand). And so he did.
/
.
v
,
Q5
J76
Q32
KJ932
N
W
E
S
/
.
v
,
10 7 3 2
A92
J 10 7 4
10 7
After the bidding 1NT — 3NT,
West leads the four of hearts.
Declarer plays the jack from
dummy (and the five from his
hand). Over to you.
Surely partner’s heart
holding is now marked: if
declarer had the ten he would
play low from dummy; if he
had only a doubleton heart he
would play low from dummy.
Partner must have Q-10-x-4.
It seems unlikely that you
will beat the contract by
continuing hearts; with that
source of club tricks in the
dummy declarer will surely
have nine. Maybe there is
some hope if you switch, and
your best shot is surely to
switch to a spade. This was
the full deal:
/
.
v
,
/
.
v
,
KJ84
Q 10 8 4
85
A86
N
CODEWORD
7
19
23
9
10
15
13
16
8
14
17
8
7
22
11
8
22
12
21
7
20
O
T
E
M
WA
S
D
CK J
U
E
R I C
V
T
Y P I
V
QU E
U
A L L
K
E
E S I
X Y
O
AW
L
H
S
S T
A
S T
U
O T
E
S
SPOT THE MOVE 1105
1 Nb6+! wins: 1…Kb8 2 Nd7+ and 3 Nxf8
or 1…cxb6 2 Qd7+ Kb8 3 Qxb7 mate
Each row, column and 3x3 box must contain the digits 1 to 9.
The digits within each group of cells joined by dotted lines
must add up to the figure in the top-left-hand corner of each
group. Within each dotted-line group, a digit cannot be
repeated.
TEASER 2894
09:41am
Winners Crossword 4787 P Byrne, Salford, Greater Manchester, L Martin, Sheffield,
S O’Neill, Glenageary, Co Dublin, E Samways, Seaton, Devon Mephisto 3000 M
Bowen, Budleigh Salterton, Devon, B Douglas, Londonderry, M Irvine, Chorlton-cumHardy, Greater Manchester, D Russell, Finchampstead, Berkshire, M Waddell,
Swalwell, Tyne and Wear Teaser 2892 G Cuttle, Woking, Surrey, B Gudgeon,
Calverton, Nottinghamshire Chess 1103 J Owen, Aberdeen Sudoku February 25
A Orrock, Cairneyhill, Fife
TODAY’S SOLUTIONS
NEWS QUIZ
BRAIN TRAINER
POLYGON
TETONOR
Y
12
KENKEN
200
33
CELL BLOCKS
27
4 8 8 x 25 8 25 11 16
32
18
34
4
252
4 x 8 6 12 10 24 14 x 18
176
36
13
6
240
11 x 16 4 x 9 4 9 10 x 24
225
30
72
32
2
15 x 15 15 15 6 x 12 14 18
4 4 6 8 8 9 10 11 12 14 15 15 16 18 24 25
SUDOKU
WARM-UP
12
27
Winner 1697: Lynne Davis, London NW7
Predentate: Harassed parent starts to dream every evening about time before
having nippers
For a full report, visit thesundaytimes.co.uk/cluewriting
A96
K53
AK96
Q54
Z X T G L V UH S A F BD
Y O MW J N I P Q E R K C
7
11
3
WA L KWA
F
D
H
L
AROMA
L
T
K
E
U P SW I NG
O C
E
UNHO L Y
S
N
A
F
F OUR
R
A
Z
I
I
BU Z Z ARD
U
L
T
G
T I E R
N E
10 7 3 2
A92
J 10 7 4
10 7
Times Travel is organising a
bridge holiday to Madeira,
October 18–25. I will be
there for the last few days. If
you are interested, visit
thetimes.co.uk/bridge-tour
or ring 0330 160 8701,
quoting RA501.
8
14
/
.
v
,
On a spade switch, what can
declarer do? If he plays low
partner switches back to
hearts; if he rises with the ace,
he will lose three spade tricks
to go with the aces of clubs
and hearts. Note that this
defence is only possible
because declarer played that
jack of hearts at trick one!
LAST WEEK’S SOLUTIONS
23
E
S
/
.
v
,
Readers are invited to compose a clue for the word above.
Clues must be original, cryptic, and similar to those in the
Sunday Times crossword. Send your entry by email to
puzzle.entries@sunday-times.co.uk. The best entry selected
after next Saturday wins £20.
Q5
J76
Q32
KJ932
W
KILLER SUDOKU MODERATE
11
All the digits 1 to 6 must appear in every row and column. In
each thick-line “block”, the target number in the top left-hand
corner is calculated from the digits in all the cells in the block,
using the operation indicated by the symbol.
CLUE WRITING CONTEST 1700: RUBIK’S CUBE
Now look at it as a defensive
problem from the East seat:
Neither vul, Dealer South
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
1
Sally Brock
Declarer made a very subtle
error on today’s deal.
4
23
20
20
23
17
19
What is the corresponding
order for the Latin
numbers?
P Y
12
14
21
20
9
21
7
20
12
3
S
23
there are two letters in
common. If I told you on
how many cards the two
numbers were consecutive,
you should be able to work
out all ten pairings. The
Spanish numbers are
written alphabetically.
S I ON I S T I C
L C N
I
O
E ENCHA I N
E A A R F
P I NTHEA I R
E
I
O
E
R C H OW D E R
T O E
E ASSENT S
D U
A
I DGE S T AB
B U F E A
L S T AR L E T
E T
I
L O
S H A I R D OW N
epilog, girl, girly, glop, glory, glyph, help, herl, hieroglyph, hirple, hole, holey, holy,
liger, loge, logy, lope, lore, lory, lyre, ogle, ogler, oiler, oily, oriel, orle, peril, pile, plié,
ploy, pole, poly, prole, proleg, rely, reply, riel, rile, roil, roily, role, yelp
I have ten cards. For each
card there is a number in
Spanish on one side and a
number in Latin on the other.
The Spanish numbers are
CINCO, CUATRO, DIEZ, DOS,
NUEVE, OCHO, SEIS, SIETE,
TRES and UNO. The Latin
numbers are DECEM, DUO,
NOVEM, OCTO, QUATTUOR,
QUINQUE, SEPTEM, SEX,
TRES and UNUS. For each of
the ten pairs of numbers,
I MPRES
N L M
ERUD I T
P S T
T I F F U
O
BOU L DE
R R R
OBSCUR
A
G
D R AWB R
T D A
ADM I R A
I
I
O
L E TONE
Easy 216; Medium 250; Harder 2,500
Graham Smithers
Spanish and Latin
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KILLER SUDOKU
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PRIZE 1216
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3
2
6
9
1
4
7
5
9
8
3
1
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PRIZE 1217
2
20
The Sunday Times March 18, 2018
MONEY
FAME AND FORTUNE
LAUREN CUTHBERTSON
I want to be
comfy, so I
have to stay
on my toes
TRISTRAM KENTON / WANG WEI
People think it is a
very short career.
But retirement is
not at, say, 25. At
the Royal Ballet
one of our guest
artists is 54
means: if you want to go on holiday, you
can; if you want to treat a friend or
family member, you can. I have felt like
that for a while.
What has been your best investment?
Travel. It inspires everything about me
and has been my best education. I prefer
experiences over things. Meeting
different people and experiencing
different cultures has made me more
curious as a person, which feeds into
being a curious artist.
The ballerina tells Anna Mikhailova she has
begun to pay close attention to her finances
— and is searching for professional advice
L
auren Cuthbertson has found
her prince on stage in Giselle
and Swan Lake. Now the
ballerina is looking for
someone a little less glamorous
— a financial adviser.
Cuthbertson, 33, a principal
at the Royal Ballet, sees the
next decade as a crucial
period for her finances.
While she is at the peak of her career,
she wants to focus on investing for
the future. The dancer has already
become an unlikely beneficiary of
Brexit: she negotiated a 15% discount
on the price of her first home amid the
property-market uncertainty that
followed the 2016 referendum.
Born in Devon to a working-class
family — her father is a butcher —
Cuthbertson studied at the Royal Ballet
School and joined the company’s
corps de ballet when she was 17. She
became a soloist 1½ years later and,
in 2008, was promoted to the highest
rank of principal.
She has inspired work by the
choreographers Wayne McGregor and
Christopher Wheeldon; the latter
designed the title role in Alice’s
Adventures in Wonderland for her in
2011. It was the first full-length ballet
created at the company for 16 years.
Her upcoming performances include
the leads in Manon and Swan Lake. She
lives in west London.
What is the most extravagant thing
you have ever bought?
With my first £1,200 payment, I bought a
Miu Miu dress — I had been told we were
going to a function and that I had to wear
a cocktail dress. It was extravagant in its
time, to think I could go and buy one in
Harvey Nichols aged 17.
How much money do you have
in your wallet?
I’m not using one at the moment. I love
Apple Pay and I hate loyalty cards — they
are too much stuff to carry. I would love
to have an app for them.
I travel quite a lot and take a bit of
foreign currency with me, along with
my cards. If I have a break, even for a
few days, I go abroad. I am going to
New York for the weekend.
What credit cards do you use?
I bank with HSBC, but I fly so much that
I am now trying to decide between
getting the platinum American Express
or the British Airways one — depending
on which has better perks.
Wake-up call: Lauren Cuthbertson — seen in The Sleeping Beauty — says her attitude to money changed when she hit 30
you do, and the more successful and
experienced you are, the more you can
climb up in terms of your salary.
I also have separate earnings from
freelance work. Galas and guesting [at
other dance companies] are quite
lucrative.
But you need to be careful with your
body. You can’t put too much emphasis
on the earnings side of things because
sometimes your body needs rest. It’s as
valuable as doing the work.
Are you a saver or a spender?
Day to day, I’m not much of a spender.
I don’t get to the weekend and think,
“I’m going to go shopping.” I have Isas
and an online savings account.
As I have got older, I have fewer
qualms over paying for what makes
my life more comfortable and saves
time. If I want to take an Uber, I do. If I
perform away, I fly business class — [as a
dancer] you cannot be squashed when
you’re flying for more than four hours.
How much did you earn last year?
I don’t think I can say. When you
become a principal dancer, you
negotiate your salary. The more work
She joined the Royal Ballet at 17
Do you welcome the new reporting
rules on the gender pay gap?
There isn’t that problem here, because
[dancers are] paid per rank. You
wouldn’t get a male soloist paid more
than a female soloist. It is very
transparent, very even. At the principal
level, you just don’t know what people
earn. But I wouldn’t want anyone else to
know [mine] and I don’t want to know
what they are on.
Have you ever been really hard up?
I used to be on a very low salary here
when I first joined. We [the corps de
ballet] got a pay packet every month
and we would say, “It’s a one, two” —
meaning it was £1,200. The company
salary has been raised since then.
A year and a half later, I was a soloist.
I was fortunate but felt I had to be more
generous with my friends; I was always
picking up the bill. Everyone knew I
was on a higher wage because I had
jumped a rank sooner than them.
Do you own a property?
I do, a one-bedroom flat in west London.
I bought it straight after the EU
referendum. They accepted my lowest
offer — I got a 15% discount. It was a small
silver lining [to the Brexit vote]. I kept it
to myself because I didn’t want to be
celebrating openly.
What was your first job?
When I was 15, I worked Saturdays
during school holidays in a stationery
shop in Devon. I got a 50% discount and
spent all my wages on stationery,
acrylics and paint. I love oil pastels.
What has been your most
lucrative work?
The galas can be quite lucrative, because
you are dancing for a short amount
of time for a good fee. Usually it is
something already in your repertoire
— or something you would really like to
dance, which is another incentive. Last
season I danced in Rome, Mexico, Japan,
Los Angeles and Denmark, and guested
for Opera Australia in Melbourne.
Are you better off than your parents?
Yes. My dad’s a butcher in Devon. My
mum did ice skating when she was
young, but she was a hairdresser at one
point and worked in the family business.
Do you invest in shares?
No. Only in the past few years have I
become aware I need to be more
financially responsible. I reached 30
and said: “Right, I need to buy a flat
now.” I had been renting an expensive
flat in Covent Garden for years and
hadn’t wanted to lose that lifestyle. I
wish that switch had come a bit sooner.
I have been saving to have some
money to invest and I am on the cusp of
doing so. I have been calling around
trying to find a financial adviser —
otherwise it’s all going into bitcoin!
What is better for retirement —
property or pension?
Both. I have had a pension since I was 18.
When did you first feel wealthy?
Because I come from a working-class
background, to me, being wealthy
What are you worried about?
Making good steps with the money I
earn, so my lifestyle can continue like
this for ever. That said, people have this
view that ballet is a very short career.
While you cannot retire at the normal
age, retirement is not at 25 — like it can
be for, say, gymnasts. Alessandra Ferri is
guesting with us now — she is 54 and a
huge inspiration.
What is your money weakness?
Comfort. If I have had a long rehearsal
day, I will be like a zombie. Unless I have
an evening event, I will happily Uber,
Deliveroo, run a bath, Netflix and go to
bed really early. When I am performing,
I usually get to sleep at 2.30am.
What aspect of the tax system
would you change?
The stamp duty on additional homes
is annoying.
What is your financial priority?
To remain self-sufficient and to make
some good investments within the next
10 years, so I can feel calm. It is a crucial
time for me financially.
Do you support any charities?
I have done since my first pay packet
— I have a direct debit with [the
homelessness charity] Shelter.
I am also a patron of the London
Children’s Ballet and the National
Youth Ballet. I give masterclasses and
workshops and auction things for them.
Because I earn money doing something
I love — and something that can give joy
to other people — I feel it is a good way
of doing charity work.
What would you do if you won
the lottery jackpot?
I wouldn’t tell anyone. I would just be
really generous and everyone would
wonder where I got the money from.
What is the most important lesson
you have learnt about money?
Always put something away, even if it’s
only £20.
Our prince has come: the Royal Ballet’s
Matthew Ball, Culture, pages 10-11
My phone’s an antique – maybe
that’s why it’s so expensive
PETER CONRADI
ADI
When my children were young, I
bought a turntable to play some of
my old LPs that I had come across in
the attic. The look on their faces was
priceless as I explained that the
unfamiliar sounds coming out of the
speakers (the Stranglers, I think, or was
it the Damned?) were generated by
dragging a needle round and round
a groove carved into the vinyl.
Will landlines — or wired telephone
services, as they are known in the
jargon — soon be seen in the same way?
If my home is anything to go by, the
answer is yes. I can’t remember the
last time I used the landline to make a
call and on the rare occasions it does
ring, it is someone I don’t want to talk
to. It is difficult not to resent the fact
that I am forking out close to £20 a
month for this.
So why does my home — alongside
more than 26m others across the UK —
still have one of these relics of the
analogue age?
The reason is simple: according to
my broadband supplier, to continue to
surf the internet I need to stay hooked
up to BT’s copper-wire network.
Virgin Media is the only one of the
large suppliers to offer a service that
does not require a landline. If you don’t
fancy Virgin, you will have to try one of
the smaller suppliers or go for mobile
broadband — which may not be ideal,
especially if you do a lot of streaming
and downloading or live in an area
with patchy coverage.
Indeed, in one of the absurdities of
modern financial life, getting rid of the
phone might actually cost you money,
according to the comparison site
Broadbandchoices.
Sign up for Virgin Media, for
example, and opt not to have a landline
and you will save just £5 a month, the
website estimates. But Virgin is one of
the pricier providers, so you could do
better by shifting to TalkTalk or Plusnet,
which will probably charge you less
even though they throw in a phone line.
Start to bundle in the various television
packages and the sums become even
more complicated.
According to the telecoms regulator
Ofcom, the proportion of adults who
live in a mobile-only home had surged
to 18% by the first quarter of last year,
up from 14% in 2016.
I’m not sure I want to join them yet.
And who knows: just as turntables
and vinyl have acquired a retro chic,
maybe the traditional phone is due
a revival.
Ready, steady, Isa
Used up your Isa allowance yet? In fact,
have you put in any money at all? If not,
and you want to take advantage of a
tax-avoidance scheme that is both
generous and perfectly legal, get your
skates on.
You have only until midnight on
April 5, the end of the tax year, to invest
up to £20,000. Any unused allowance
will be lost.
Quite why so many people wait until
the last moment to take the plunge is
something of a mystery. But if you’re
among them and have been holding
back because you can’t decide where to
put your money, salvation is close at
hand: included with Money this week is
an eight-page Isa special that outlines
the options on offer — from traditional
cash Isas to the more innovative
peer-to-peer products.
There’s no excuse not to act. And,
once you’ve worked how much you can
afford to put away now, why not start
thinking about the next tax year?
@peter_ conradi
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