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The Daily Telegraph Business - May 8, 2018

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Business
**
Tuesday 8 May 2018
telegraph.co.uk
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Youth
clubbed
Pension
Ponzi
scheme
which
misled a
generation
Julia
Samuel
Port in
a storm
‘Festive
tipple’ gets
a makeover
to arrest a
decline in
sales
Page 2
Page 8
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Page 7
Fitch issues
warning on
household
debt binge
By Tim Wallace
THE UK’s households are borrowing
more money than they are saving for
the first time since the so-called “Lawson boom” in the Eighties, the credit
rating agency Fitch has warned.
British families are, on average, savers, putting money aside, usually in a
bank account, which lenders then loan
out to fund business investment. But
for the past nine months households
have been in deficit, which is storing
up problems for the UK economy, Fitch
said in a report published today.
“It is typically the household sector
that does the saving,” said Brian Coulton, Fitch’s chief economist. “That has
nearly always been the pattern in the
UK, apart from one quarter in the late
Eighties, at the peak of Lawson boom,
where it moved into a deficit, and we
know that didn’t end well.”
Consumer spending has helped to
support the economy in recent years.
But it has also left UK families with
more debt than the average household
faced three decades ago.
“Having made the effort to keep consumer spending going by drawing
down savings quite sharply, it has now
left the UK consumer in a vulnerable
position if we get any negative shocks,”
Mr Coulton warned.
The amount of debt consumers are
taking on is rising at nearly 10pc on a
year, while average earnings are up by
less than 3pc. This suggests that the
burden is increasing rapidly.
Household debt could even hit the
peaks last seen before the financial crisis, undoing much of the work to reduce the burden since the crash. The
debt to income ratio of UK households
fell from 138pc in 2008 to a low of
122pc. But the latest rise in borrowing
means debt is piling back up again.
“I don’t see in the near-term that this
ratio is going to stabilise, it will continue to rise,” said Mr Coulton. “If it
carries on at these rates it would take
around four years to get all the way
back up to the peak.”
The boom that occurred when Nigel
Lawson was the Chancellor of the Exchequer in the Eighties ended in bust
in part because of sharp interest rate
rises, as well as the turmoil following
Britain’s exit from the Exchange Rate
Mechanism, which led to Black Friday.
This time round, however, the Bank
of England is being cautious on interest
rate rises. Mr Coulton believes that
borrowers should be able to manage
reasonably comfortably with any small
increase in the base rate, but warned
there were other risks that could
plunge households into trouble.
One is the possibility of banks making their lending terms more onerous,
thus reducing access to credit. Lenders
are already moving in this direction because they are under pressure from the
Bank of England to reduce risks in the
financial system.
Mr Coulton believes this trend is already feeding through to the real economy: “That has been pretty well
correlated with a very sharp slowdown
in spending on consumer durables.”
Alternatively, a slowdown in the
economy, potentially as part of a global
slump, could push unemployment up
from its current low levels, putting
some households in financial danger.
Another risk is that foreign investment dries up. Household debt is
largely financed by foreign investment
from the eurozone, which is saving
more than it needs. Such fund flow has
been referred to by Mark Carney as
“the kindness of strangers”. If this dries
up, it could squeeze households hard.
By Julia Bradshaw
SWISS food giant Nestlé is paying Starbucks $7.15bn (£5.28bn) in cash for the
rights to sell its coffee beans directly to
consumers through supermarkets and
other food shops around the world.
Nestlé is already big in coffee – it
owns Nescafe and Nespresso – and the
company said this would boost its market position in North America, while
giving it opportunities to sell premium
range coffee to consumers overseas.
For Starbucks, the deal will increase its global presence as the company’s coffee beans and grounded
blends will be sold through Nestlé’s
substantial channels in food retail, such
as supermarkets and corner shops.
“This global coffee alliance will
bring the Starbucks experience to the
homes of millions more around the
world,” said Kevin Johnson, chief executive of Starbucks.
‘This will bring the
Starbucks experience to
the homes of millions more
around the world’
GETTY
Credit ratings agency
warns of repeat of Eighties
boom and bust as more
people borrow than save
Nestlé pays
$7bn to sell
Starbucks
coffee beans
Foam home Margot Robbie hits the surf in Malibu, California. The I, Tonya actress utilised
her love of the sport to promote a cleaner, quieter, more sustainable way of moving and
living as part of her role as Nissan’s electric vehicle and sustainability ambassador.
New VW boss granted ‘safe passage’ deal
by the US to allay Dieselgate arrest fears
By Tom Rees
HERBERT DIESS, Volkswagen’s new
boss, has been granted a rare “safe passage” deal by US authorities, allowing
him to travel freely without fear of being arrested in connection to the “Dieselgate” scandal.
The deal with the US Justice Department will allow the chief executive,
who was appointed just last month, to
travel around the world to manage the
German car maker’s vast empire.
Mr Diess has been given assurances
that he will also receive forewarning
from US prosecutors if they plan on
charging him in the emissions cheating
investigation, according to Bloomberg.
In 2015 it was revealed that VW
rigged software on 11 million diesel cars
to help them pass emission tests. The
scandal has cost VW €25.8bn (£22.6bn)
and the company is facing a €10bn lawsuit from shareholders.
Mr Diess joined the company from
rival BMW just months before the
scandal rattled the world’s largest car
maker and the deal with the US Justice
Department could signal that he will
not be targeted by its probe. However,
Mr Diess, who was the company’s
brand chief at the time, was present at a
meeting in July 2015 in which US prosecutors claim VW executives were
made aware of the emissions problem.
Last week US prosecutors filed
charges against Martin Winterkorn,
VW’s former boss, who was at the helm
of the company when the “Dieselgate”
scandal emerged in September 2015.
Mr Winterkorn, who insists that he was
completely unaware of the emissions
test cheating, could face 25 years in jail
if he is found guilty of the US charges.
It was also revealed on Sunday that
Volkswagen could still take legal action
against Mr Winterkorn for his part in
the highly damaging scandal.
Microsoft ‘enshrines’ privacy right
By James Titcomb in Seattle
MICROSOFT’S chief executive has defended people’s
privacy, distancing the tech
giant from the recent data
scandals to hit other technology companies.
“Privacy is a human right,”
Satya Nadella told an audience at the company’s annual conference in Seattle.
“We have enshrined a set
of principles that ensure we
protect this human right.”
He called for tech companies
to take greater responsibility
for their actions and warned
them they should not develop new technology such
as AI without considering its
consequences.
“We have a responsibility
as the tech industry to build
trust in technology. We need
to ask ourselves not only
what computers can do, but
what computers should do.”
The comments come after
Facebook’s recent Cam-
bridge Analytica scandal,
which has led to greater
scrutiny over how large tech
companies collect and process data about their users.
Mr Nadella said companies must ensure they introduce “ethical AI” and that
Microsoft had created an
ethics board to govern how
new products are created.
“We have to talk about AI
being in the hands of a few
companies to AI being everywhere,” he said.
Nestlé reported sales of £66bn last
year, with coffee one of its fastestgrowing categories. The food giant,
whose brands include Purina, KitKat
and Häagen-Dazs, is focusing on coffee
as a main growth area and has already
made some acquisitions in the sector,
including buying a stake in California’s
Blue Bottle Coffee last September.
The Starbucks business covered by
the deal currently generates around
$2bn (£1.48bn) in annual sales and includes coffee beans and ground coffee
that Nestlé will be selling outside of
Starbucks’ coffee shops.
Nestlé expects this business to contribute to its profit in 2019. Starbucks,
meanwhile, will use the cash to accelerate share buy-backs.
The Seattle-based company said it
now expected to return some $20bn
(£14.7bn) to shareholders through buybacks and dividends by 2020. Around
500 Starbucks staff will join Nestlé, but
operations will continue to be located
in Seattle.
The deal, which needs approval
from regulators, is expected to complete by the end of the year.
Virgin Money considers £1.6bn takeover
by Clydesdale and Yorkshire bank group
By Jillian Ambrose
VIRGIN MONEY is mulling a proposed
takeover bid from the owner of Clydesdale and Yorkshire Bank (CYBG),
which would value the challenger bank
at £1.6bn.
The
Newcastle-upon-Tyne-based
lender, backed by Sir Richard Branson,
said CYBG has suggested handing investors 1.13 of its shares for each Virgin
Money share they own to give them a
36.5pc of the combined group.
The potential takeover has emerged
after Virgin Money defied its doubters
who feared the challenger bank’s mar-
gins would come under pressure due to
cut-throat competition in the mortgage
market.
Instead, Virgin Money’s share price
bounded over 6pc higher last week after it revealed resilient margins and
better than expected growth in deposits of 7.4pc to £31.1bn.
CYBG’s preliminary approach offers
Virgin Money shareholders a 15pc premium compared to its close on Friday,
and a stake in the creation of “the UK’s
leading challenger bank”.
CYBG said it believes that the combined group could offer both personal
and SME customers a “genuine alterna-
tive to the large incumbent banks”,
adding: “The combination would provide a powerful, full-service banking
offer, including leading digital and mobile banking services for six million
personal and business customers,
bringing together the complementary
strengths of CYBG and Virgin Money.”
Virgin Money urged shareholders to
take no action in the wake of the CYBG
play because there can be no certainty
that a formal offer will emerge.
The bank added that its board is in
the process of reviewing the proposal.
A further announcement will be
made in due course, it added.
2
Tuesday 8 May 2018 The Daily Telegraph
***
Business comment
With interest rates at 40pc the
country’s economy is looking
fragile but worryingly it is not the
only emerging market in difficulty
I
f you thought your mortgage repayments
were a bit on the high side, at least you
aren’t Argentinian. The central bank has
just pushed interest rates all the way up to
40pc in an effort to support the peso and
prevent capital from fleeing the country.
Meanwhile the Turkish lira has fallen to a record
low, and the Russian rouble is at its weakest level
in three years. The emerging markets are
suddenly looking very fragile, with one country
after another tumbling into a crisis.
Of course, that might just be a blip. After all,
developing nations are always volatile. It could,
however, be the start of something a lot more
serious. Why? Because US interest rates are
going up, which is always bad for the developing
world, any intensification of the looming trade
wars is going to hit those countries worst of all,
and, finally, because technology dominates many
emerging market indexes. It’s a combustible mix.
No one ever expected stability from the
Argentinian economy. But even by its standards,
the country’s had a tough fortnight. Over the
course of just a few days, interest rates were
hiked from 27.5pc to 40pc as the peso plunged in
value on the foreign exchange markets. As it
happens, its president, Mauricio Macri, a rare
Latin American Thatcherite, may well be doing a
good job, scrapping subsidies and price controls,
and taking down the tariff barriers that have
made the country a semi-socialist backwater for
years. But there is a lot of pain in the process.
It is not just Argentina, however. The Turkish
lira has plunged to a record low against the
dollar. Inflation has climbed to 11pc, the country
is heading into turbulent elections in late June,
and the central bank has just pushed interest
rates up to 13pc.
Elsewhere, the Russian rouble is wobbling
again. In April it dropped by 10pc against the
dollar in a single week, taking it down to its
lowest level in three years, and it was under
heavy selling pressure again last week.
Investors are heading for the exit. Global funds
pulled $1.3bn (£0.95bn) from emerging market
debt last week, the equity index dropped sharply,
and currencies, which are
usually where the trouble
really starts, fell across the
board for the fifth
consecutive week.
A classic emerging
markets crisis runs much
like a game of dominoes.
One country falls after
another. That was what
happened in the last big
storm, slightly over two
decades ago. The Asian
financial crisis started in Thailand in 1997, and
spread right across that continent, before
erupting all over again in Russia the following
year. Could a similar script unfold this summer?
There are three reasons to fear it might.
First, the Fed has started tightening monetary
policy. The US economy is doing fine, with
growth projected at 2.3pc and President Trump’s
tax cuts stimulating demand. The trouble is,
while higher rates are fine for the US, they always
hit the emerging markets – which have a lot of
their debt denominated in dollars – hard.
Next, trade wars will hit the emerging markets
harder than anyone else. Some of Trump’s
reforms are helping the US economy, but his
brainless imposition of tariffs and quotas are
going to hurt everyone else.
Even worse, both China and the European
Union seem intent on retaliating, which is only
going to make matters worse. If that escalates, it
is going to be bad for the whole world. But it will
hit the developing economies most of all. Why?
Because they typically rely on exports to fuel
their growth, and especially exports of
manufactured goods to the US, which is the
sector most likely to be hit by tariffs.
Finally, take a look at the companies in the
main emerging markets indices. Most investors
in those funds might think they are buying into a
broad range of industrialising countries selling
goods to Western Europe and the US. In fact,
they are increasingly dominated by technology.
In the benchmark MSCI Emerging Markets
Index, IT now accounts for 27pc of the
weighting. Sectors such as industrials and
consumer staples, which you might think were
more important, only account for around 5pc
each. It is giant companies such as the Chinese
internet firm Tencent (which is worth almost
$30bn), Alibaba, Samsung and Taiwan
Semiconductors that lead the index.
They are all hitting the same kind of
stratospheric valuations as the US tech giants
such as Amazon and Netflix. Sure, many of them
are excellent businesses, and over the long-term
they will almost certainly do brilliantly well. But
there could well be some huge falls along the
way.
Tech is volatile, and emerging markets are
volatile. Put the two together, and you can
guarantee it is going to be a bumpy ride.
It has been a rough few years for the emerging
and frontier markets. With young and
increasingly educated workforces, they may
have the best long-term growth potential.
But, with the exception of 2017, when they
gained 37pc, they have missed out on the global
bull market. It doesn’t look like that is about to
end any time soon. One or two running into
trouble might not make much difference.
Argentina is not crucial to the global financial
system, and neither is Turkey or even Russia.
But if they start to unravel one by one, they
could be the biggest threat to the global markets
over the summer – and there are already
worrying signs that is precisely what is
happening.
‘Trump’s
brainless
imposition of
tariffs and
quotas are
going to hurt
everyone else’
JULIET SAMUEL
MUEL
H
ere is a figure to note for
anyone wondering why
today’s young people are
so left-wing. If you
compare a typical
millennial of 30 to a
typical baby boomer at the same age,
the baby boomer was twice as likely to
own a home. By the time millennials
are 40, they will be commuting for 64
hours a year more than baby boomers
did at the same age. This is despite
spending, on average, a quarter of
their income on housing, whereas
those who lived three generations
before them spent just 8pc of income
on keeping a roof over their head.
Of course, back in the day, no one
had iPhones or avocados or cheap
flights to Prague. But these aren’t the
things that make a life. The factors that
really matter financially are wages,
home ownership, pension wealth and
old-age care provision. On all factors,
Britain is experiencing a stagnation or
dramatic decline. New generations
aren’t getting richer any more. Wages
have been flatlining while essential
assets like houses and pension
guarantees become totally
inaccessible.
These are the conclusions of a
report on intergenerational wealth by
the Resolution Foundation, a think
tank chaired for the former Tory
universities minister, Lord Willetts.
The aim of the research is to trigger an
honest conversation about how we’re
going to cope. Fiscal pressures in
health and social care are shooting up
as the population ages. This has
prompted talk of tax rises, like an
“NHS surcharge”. But Willetts is
worried we’re drifting towards an
approach that simply doesn’t reflect
the modern distribution of wealth
between generations.
The old norm was that you taxed
workers to support pensioners. But
now, on average, workers are
Business
Insight
Compass
C
ompass will seek to
reassure investors
that it has its costs
under control when it
reports its half year
results tomorrow, writes
Rhiannon Curry.
The company, which is
the world’s largest
contract catering
business, is facing
increasing costs for its
ingredients and higher
wages which affect its
margins. However, as
long as it navigates any
cost pressures better
than its rivals, it could
gain a larger share of the
market.
Much of the catering
world has yet to
outsource, and Compass
already provides food to
high profile sporting
GETTY IMAGES; ALAMY STOCK PHOTO
Argentina’s
crisis could be
the sign of
trouble ahead
Pension Ponzi scheme that misled
a generation and crippled the next
struggling financially more than the
pensioners, and the cost of supporting
the latter is rising. “Don’t just assume
the working age population alone can
bear this,” says Willetts. They can’t
earn enough to save or buy a house
and company pensions offering
guaranteed income have disappeared.
In other words, he says: “They don’t
have a safety net.” Faced with
ballooning public service pressures,
older people will have to chip in. This
is true whether you do it through
general taxes or by making people pay
for more of their own old-age care. The
money has to come from somewhere.
If the last General Election taught us
anything, it’s that millions of older
people think this demand is deeply
unfair. Theresa May’s botched launch
of a social care policy that tried to push
up the amount people pay towards oldage care was so toxic that it risks
putting the Tories off reform for a
decade. The unfairness is deeply felt,
because the vast majority of baby
boomers and older people have
worked steadily, paid national
insurance contributions, bought
houses when they were cheap,
obtained defined benefit pensions
when they were the norm and were
promised free, cradle-to-grave
medical and elderly care. Most weren’t
extravagant and don’t live in
“mansions”, as we now insist on calling
any house with more than three
bedrooms.
The unfair truth, however, is that
the care people were promised simply
isn’t as affordable as we thought.
Voters were sold a Ponzi scheme. As
long as there were enough new
suckers buying in, we could keep it all
going and those who were getting
payouts, in the form of free medical
treatment and end-of-life care,
wouldn’t notice. But now, it’s all
starting to come apart. The cash isn’t
there. The fresh blood can’t afford to
pay in enough and, relative to them,
the ranks of those expecting their
payout are swelling. This is often
taken, wrongly, as an insulting
criticism of older generations. But it
isn’t. It’s simply a statement of the
events including
Wimbledon and the Six
Nations rugby
tournament, as well as for
schools, retailers and
hospitals.
In the last decade, it has
won a number of support
services contracts,
particularly in remote and
offshore locations.
However, it has stressed
that food remains its core
‘Don’t just
assume the
working age
population
alone can
bear this.
They don’t
have a
safety net’
situation in which we find ourselves.
In the short-term, there is no obvious
fix – no “fair” options.
The idea most discussed at the
moment is an NHS surcharge on
national insurance. But most models of
this type of tax load the burden onto
working people who, as an age group,
are those least able to pay. Of course, it
is not realistic to force pensioners and
baby boomers to pay for all of their
own care. They weren’t expecting to
shoulder such burdens and haven’t
saved enough. But, given the shortfall,
it is reasonable to ask relatively
wealthy pensioners to contribute more
in some form or another. That could
mean revising council tax to take
account of massive house price rises
or requiring housing wealth to count
towards a calculation of care costs, as
May tried to do. For income-poor
home owners, the payment wouldn’t
have to be made immediately, but
could be rolled up and made from a
person’s estate. In the meantime,
councils could then borrow against
these assets to plug the gap.
Longer term, there are two lessons.
Firstly, our country needs to generate
high-paying jobs along with young
people equipped to do them and we
should embrace policies that bring
down the cost of the assets needed for
a decent life. That means funding
high-quality vocational training,
cracking down on failing universities,
encouraging companies to invest,
building enough houses, improving
pension fund rules and revising our
immigration policy with all of these
aims in mind. Secondly, everyone
needs to save more. Pension autoenrolment is a good start. But it’s still
too low. Rough estimates of pension
and care costs suggest saving about a
fifth of annual income, in addition to
paying rent or mortgages. Saving on
this scale will only be possible if we
learn lesson one and manage to get
more people into higher paying jobs.
The biggest lesson, of course, is not
to wait until the situation gets this bad.
The sooner reform comes, the better.
It’s not about “taxing dementia” or
hating the elderly. It’s about
dismantling a massive and
irresponsible Ponzi scheme.
Share price
£15.60
High Jul 2017
£17.57
Low Feb 2018
£14.25
Dominic
Blakemore
Chief executive
business, and restructured
some of its support
services contracts to
mitigate against wage
inflation earlier this year.
New boss Dominic
Blakemore, who took over
after the death of Richard
Cousins in January, will be
hoping to improve on
February’s solid first
quarter update.
Millennials may
have avocado,
iPhones and cheap
flights, but the real
things that matter
– decent wages,
pension wealth and
home ownership –
are becoming
increasingly
inaccessible
Today
GETTY IMAGES
Matthew
Lynn
Compass supplies strawberries to the Wimbledon championships
18
£
17
16
15
14
2017
2018
Strengths
Threats
 Food business has a
solid base of established
contracts
 Scale of the company
allows it to limit costs
 Buoyant US economy is
pushing sales
 Food and labour cost
inflation
 A £100m hit this year
from currency
movements
 Competition from
other businesses
Weaknesses
Opportunities
 Low margin business
affected by costs
 Much of its work is
abroad meaning a stronger
pound is a drag on profits
 New management needs
time to establish itself
 Taking market share
from rivals
 Driving efficiencies in
sourcing, operations and
management
 Acquisitions of other
smaller companies
Companies should use profits for the good of society
PHILLIP
ULLMANN
I
am a business leader. My job is to
run my company and make a profit.
I am also a citizen, so I know that
my business does not exist in vacuum.
I am part of society and so is my
business. Unless that society grants us
licence to operate, there will be no
profit and no business.
That licence is now in question,
society’s patience with business
stretched thin. Profit is and must
remain one of the key driving forces of
business, but who receives that profit?
If it is only a remote few, the cost in
public trust will become unsustainably
high and our licence will be withdrawn.
We must start to share the profits of
our industry more fairly, or there will
be no profit for anyone.
Change is overdue. Tomorrow at the
Social Market Foundation (SMF), a
think-tank founded on the idea of fair
markets and sustainable business, I’m
publishing a paper setting out how
making our firms into genuinely social
businesses can make us and our
society richer. Some of the changes
that are needed can be made by
businesses themselves.
Mine has already started. At Cordant
we turn over £850m a year serving
5,000 clients and placing 125,000
people in jobs each year. We’ve capped
the dividends that shareholders – who
include me and my family – receive
from the business. We’ve capped the
pay that executives – who include me
– can receive at 20 times the wages of
our lowest-paid staff. Soon, we’ll put a
share of the company’s profits in a pool
that all our workers can share in.
But many changes will need
politicians to show real leadership and
work with us to strike a new covenant
between business, the state and the
society we both serve. Section 172 of
the Companies Act should be revisited,
made broader to ensure that the
interests of company’s stakeholders
should rank alongside shareholder
value in executives’ decisions.
The days of companies driven by
“shareholder value” and nothing else
are over. Companies should use their
profits for the good of society as well
as investors. Independent statutory
auditors should assess how well a firm
is set up to deliver social impact and
meet the aims each business would set
out in a Social Mission Statement.
Politicians should also take a lead in
helping determine how those investors
can judge genuinely social businesses.
The people and institutions whose
capital underpins our businesses are
demanding better of us, how are they
to judge us? Larry Fink of Black Rock is
quite right to say he wants to invest his
clients’ money in firms with a plan to
maintain their social licence to operate.
But how do investors know which
businesses deliver real social impact?
The patchwork of sustainability
indexes is too inconsistent and
arbitrary to command real confidence.
If legislators help create a shared
framework of understanding about
how to measure a firm’s social impact,
business leaders can deliver real
improvements – and be compensated
on their performance.
The aspect of business life in
modern Britain that has done most to
erode public trust in business arises
when the state becomes the customer.
Flawed public procurement deals that
leave taxpayers bearing all the risk are
the best way anyone has yet devised to
persuade voters that the modern
economy really is a rigged game. New
rules are overdue, starting with reform
of the Public Services (Social Value) Act
to ensure that contracts are awarded
on the basis on social value, not simply
price: putting public services in the
hands of the lowest bidder is bad for
taxpayers and that is ultimately bad for
business. We are all paying for
Carillion’s collapse, a cost measured in
public money and public trust.
It’s vital that we restore trust in
business to deliver public services,
and not just because today’s public
sector depends on business. Updating
the state and its services to support the
population of the 21st century will
mean making the overdue leap to
disaggregate the demand side of this
market, putting control in the hands of
citizens who will increasingly
commission their own services from
accountable social business that
employ locally, share profits, and cap
pay and dividends.
I’m publishing my paper in
Westminster because it’s our political
conversation about business and
economics that’s in greatest need of
change. Too often debate about the
model for a modern economy pits a
public sector, statist, option against a
‘We must
show them
that good
business is
ultimately
based not on
money but
on people
and their
well-being’
private sector, profit-maximising,
vision. In other words, it’s either the
government that controls resources on
behalf of voters or a corporation on
behalf of shareholders. Social business
can offer a middle way that uses the
drive of a profit-seeking company to
benefit both investors and the wider
public.
Other countries are getting ahead of
this curve. France and its corporate
sector are embracing social business,
shaping the agenda instead of being
driven by events. In the UK, we have
seen some promising starts. In 2016
Nigel Wilson of L&G led an excellent
Mission-Led Business Review for the
Government, but where’s the followthrough from Whitehall?
Politicians who want to save
Britain’s open market economy from
public anger need to get a firm grip on
this agenda. I’m pleased that Guy
Opperman, the pensions minister, is
engaging with this agenda and will be
speaking at the SMF.
For business, change is inevitable. A
generation of young people is growing
up with the idea that business is
something that offers them unfulfilling
jobs that do nothing for the world
except deliver profits for other people.
We must show them that good
business is ultimately based not on
money but on people and their
well-being. Because if we do not
answer the questions that people are
asking about business, answers will be
forced upon us.
Phillip Ullmann runs Cordant Group.
His paper will be published at www.
smf.co.uk
The Daily Telegraph Tuesday 8 May 2018
***
3
Business
UK productivity
grows strongly
but it still lags
behind Europe
BRITISH businesses need to up their
game and be more productive or risk
losing out as the country leaves the European Union, industry bosses have
warned. Productivity in the UK grew by
0.9pc and 0.7pc in the final two quarters
of 2017, the strongest growth since 2011.
But, the UK’s output per hour is still
around a quarter behind competitors
like France and Germany, meaning it
takes British workers five days to produce what others achieve in four.
“The UK has a long way to go in order
to catch up with our European neighbours,” said Tony Danker, chief executive of Be the Business, an industry-led
organisation created to help close the
UK’s productivity gap.
“With less than a year to go before we
leave the EU, bosses must start now to
make the most of the opportunities it
presents and make Britain’s economy
the most competitive in Europe.”
His comments came on the back of a
survey suggesting UK companies con-
‘Confidence among
businesses reached its
highest level for two years in
the second quarter of 2018’
sistently overestimate their performance relative to their peers. More than
three-quarters rated themselves as
more productive or equally productive
as their peers, yet nearly a third
had never looked at how they could improve their business practices, the survey of 1,000 small and medium-sized
business owners found. “Evidence shows that business leaders consistently overestimate the per-
formance of their businesses, and Brexit
will only increase the demand for our
firms to be more competitive,” Mr
Danker added. Businesses in the Midlands were the most confident of their
performance, with 83pc of those surveyed rating their productivity as equal
or better than others, while those in
Wales were the least, at 75pc.
Confidence among businesses, particularly those that export, reached its
highest level for two years in the second
quarter of 2018, according to the latest
Business Confidence Monitor from
the Institute of Chartered Accountants
in England and Wales.
The survey, which began in 2003,
suggested UK firms are enjoying improved sales and profit growth, which is
leading to more capital investment and
spending on R&D. Profits have risen by
4pc on average over the past 12 months,
with a similar growth rate expected in
the year ahead, across all types of companies, in most sectors and regions.
“There is definitely a sense of ‘the joy
of spring’ in this quarter’s figures,” said
Michael Izza, chief executive of the
ICAEW. “Export and domestic sales
growth are both improving and businesses are controlling price inflation
and labour costs.” Firms that export reported stronger sales growth of 5.2pc,
boosted by the weak pound, which has
made their goods more competitive. Mr
Izza warned, however, that bosses were
struggling with a tide of rules and new
legislation, including the gender pay
gap and data protection regulations.
Staff turnover was another area of
concern, cited as a major problem by
the construction and business services
sectors. “Confidence is very fragile and
the upward trend could be derailed by
any setback in the economic outlook,”
Mr Izza said.
AFP/GETTY
By Julia Bradshaw
Unhappy
medium
The Phnom
Penh Post
– Cambodia’s
last Englishlanguage
independent
daily paper
– has been
sold to a
Malaysian
investor with
reported
links to
Prime
Minister
Hun Sen.
Several
senior
journalists
have already
quit after
the editorin-chief
was sacked
for refusing
to remove
a story.
Confidence in the eurozone slumps to a 15-month low
By Tom Rees
CONFIDENCE in the eurozone
economy has tumbled to a fresh
15-month low as investors begin to fret
about a sharp slowdown in growth and
the recent spike in trade tensions with
the United States.
Economists had expected investor
confidence in the eurozone to make a
modest rebound in May but it dropped
for a fourth consecutive month to a
reading of 19.2.
The eurozone recovery hit top gear
in 2017 but growth in the first quarter
of the year lost its momentum,
declining from 0.7pc to 0.4pc. Amid
concerns that eurozone growth has
already peaked, a sub-index measuring
investor expectations for the region
slipped further into negative territory,
dropping to its lowest level since 2014.
The strengthening euro is making
the bloc’s exports less competitive and
fears that a tit-for-tat tariff exchange
between the US and major trading
partners could lead to a resurgence in
protectionist policies also knocked
sentiment, Sentix said.
Last week the EU was handed a 30day reprieve from steel and aluminium
tariffs announced by the White House
earlier this year.
However, the US government
warned that this was the final
opportunity to negotiate a deal to
swerve the import taxes. The European
Commission said that the temporary
exemption
“prolongs
market
uncertainty, which is already affecting
business decisions”.
Hopes that the trade spat could be
calmed by talks in Beijing last week
were undermined by Donald Trump’s
trade team asking China to slash its
trade deficit with the US by $200bn
(£147bn) by 2020.
Fears of a deteriorating economic
picture in the eurozone were
compounded yesterday by the region’s
retail sales growth contracting for the
first time in over a year in IHS Markit’s
closely-watched PMI survey.
IHS Markit economist Alex Gill
warned that the sales slump in April
was a sign of “restricted consumer
demand and increased uncertainty” in
the bloc.
Retail sales in the eurozone’s three
largest economies – Germany, France
and Italy – suffered their sharpest
decline in 17 months.
The global economy tapped on the
brakes in the first quarter of 2018 with
US growth cooling slightly to an annualised rate of 2.3pc and UK growth
slowing to a near standstill at 0.1pc.
Despite fears of a global deceleration, economists expect growth to pick
up in the second quarter, climbing to
0.6pc in the eurozone and 0.4pc in the
United Kingdom.
Introduction of new data rules sparks 23pc year-on-year growth in demand for lawyers
By Rhiannon Curry
THE number of jobs available for
lawyers in the UK jumped by nearly a
quarter in the first three months of this
year as the introduction of new data
rules led to a flurry of hiring.
Growth in legal sector jobs – up 23pc
compared to the same period last year
– was higher than in any other industry
in the first quarter, according to professional recruitment firm Robert Walters.
This was driven by the impending
implementation date for the new
General Data Protection Regulation,
which is intended to give people more
control over their personal data.
The changes to the law, which come
‘This demand has applied
to both in-house roles and
positions within private
practice’
into force on May 25, mean that
companies are increasingly seeking
Outsource giants call for more
‘reward’ in wake of Carillion fall
By Rhiannon Curry
THE relationship between the Government and private sector companies
which supply services needs to be urgently reviewed in the wake of Carillion’s collapse, some of the company’s
rivals will tell MPs this week.
The bosses of Mitie and Serco will
appear in front of Parliament’s Public
Administration and Constitutional Affairs committee today as the Government gathers evidence in an attempt to
avoid another high profile collapse of a
business providing core services to
institutions such as schools and hospitals.
Rupert Soames, the chief executive
of Serco, said in his submission to the
committee ahead of the session that
there is “an urgent need to re-think the
relationship between the UK Government and its suppliers”.
He said that a “fundamental tenet of
commercial life” is that “risk must be
balanced by reward”, but that this was
not always in proper balance in Government procurement. This had pro-
duced an “increasingly enfeebled
supply base,” he said. Mr Soames,
alongside Phil Bentley, the chief executive of Mitie, is expected to speak about
how companies go about bidding for
work from the public sector, addressing concerns that profit margins have
been pushed dangerously low by
increasingly competitive pricing of
‘The provision of sensitive
public services should not be
completely exposed to the
harshest rough-and-tumble
of a totally free market’
contracts. Carillion had been found to
be bidding at low rates in order to win
more work.
Mr Soames said: “The provision of
sensitive public services should not be
completely exposed to the harshest
rough-and-tumble, boom and bust cycle, of a totally free market where the
relative power of either a buyer or a
seller may become disproportionate.”
The committee has been gathering evidence about the wider process of procuring public services in the wake of
Carillion’s insolvency in January, amid
concerns that another major failure
could put public services at risk.
The Government claims that its contingency plans meant that jobs previously done by Carillion, such as
providing cleaning and school dinners,
continued despite the disruption.
However, construction projects
which the group had been working on,
including a major hospital in the Midlands, have been badly delayed.
A separate committee has been holding an inquiry into the company’s collapse, the findings of which are
expected to be published in the coming
weeks.
Also appearing before the committee are Karl Wilding from the National
Council For Voluntary Organisations;
David Walker, the former director of
public reporting at the Audit Commission who now writes for The Guardian;
and Matt Dykes from the TUC.
Four in 10 UK firms
not ready for new
data protection law
UPI/BARCROFT
By Rhiannon Curry
Young gun A youthful attendee inspects a small sample
of the merchandise available to buy at the 147th annual
National Rifle Association convention in Dallas, Texas.
ALMOST half of companies risk not
complying with new data protection
laws when they come in later this
month.
Only six in 10 company directors are
confident that they will be fully compliant with the new law, according to a survey by the Institute of Directors (IoD).
The European Union’s new General
Data Protection Regulation comes into
effect on May 25, and companies will
face stricter rules about how they store
and use their customers’ data.
Under GDPR, individuals must optin whenever data is collected on them
– at the moment many firms only give
people the option to opt-out.
If businesses fail to comply they
would face extra audits and be forced
to delete data. Ultimately they could be
issued with fines of a maximum of
€20m (£17.6m) or 4pc of their annual
turnover, whichever is greater.
Jamie Kerr, IoD head of external affairs, warned that some small companies may lack the resources to make
sweeping changes.
legal advice over what they can and
can’t do with customers’ information,
and need help checking whether they
risk being in breach of the new rules.
Chris Hickey, chief executive of Robert Walters’ UK, Middle East and Africa
division, said: “GDPR is a high priority
for firms across the UK, and legal
professionals have subsequently been
highly sought after to support firms in
adapting to the new guidelines.
“This demand has applied to both
in-house roles and positions within
private practice, as smaller businesses
engage law firms to support changes to
their processes to ensure compliance.”
As well as GDPR, demand for legal
professionals has also been boosted by
increased regulation in the financial
services sector, especially for lawyers
with anti-money laundering and financial crime specialisms.
Few legal professionals work in this
area, meaning big companies compete
for talent. Overall, the number of
advertised jobs in the UK rose by 6pc in
the first quarter of 2018.
4
Tuesday 8 May 2018 The Daily Telegraph
***
Business
ICELAND has been at the forefront of
driving sustainability initiatives in the
retail industry. This includes the frozen
food chain’s commitment to eliminate
plastic packaging for all own-brand
products within five years, and most
recently, a pledge to remove palm oil
from the ingredients in all its products
by the end of the year.
The man responsible for these
changes is Richard Walker, the 37-yearold eco-friendly son of Malcolm
Walker, Iceland’s multi-millionaire
founder and chief executive.
Richard has been managing director
of Iceland’s sister brand The Food
Warehouse – large superstores offering
bulk items at low cost – for three years.
He’s also Iceland’s director for sustainability, and it is in this role that he has
made the biggest splash.
Under his management, Iceland became the first major retailer globally to
go “plastic-free” on its own label products, and the first British supermarket
to pledge a crackdown on palm oil.
“I’ve always been passionate about
the natural world and the environment,” he says.
“I’ve climbed mountains, including
the North Col of Everest, and spend a
lot of time outdoors. It’s important for
us as a supermarket to look at our
environmental footprint.”
Walker says British shoppers are
“crying out for change” and, as someone who has always been told that it
makes good business sense to listen to
your customer, he believes it is essential to adapt and make positive changes.
“We’re not perfect and we have
things we want to improve on, like
food waste, but we just want to do
better every day at basic stuff.”
Walker made the decision to scrap
palm oil in Iceland’s products after vis-
iting Indonesia and “seeing the
environmental devastation caused by
expanding palm oil production first
hand”.
UK supermarkets such as Morrisons,
Asda, Lidl and Aldi say they only use
“sustainable” palm oil in their ownbrand food products, but Walker
claims there’s no such thing available
in the mass market.
While most people praised the
supermarket for its hard-line stance on
the environmentally-devastating
vegetable oil, one palm oil lobby group
took aim at Richard on social media,
with videos calling him a Bentleydriving trust-funder who inherited
Iceland from “Daddy”.
One industry insider said that
Iceland hadn’t engaged with other
supermarkets about its plan for palm
oil, but Walker is adamant that this
isn’t about one-upmanship.
“The decision to remove palm oil
from our products was a personal one,
as I saw the effects of deforestation.
Each retailer needs to make that
decision for themselves.”
The crackdown on plastics, however,
will
require
industry-wide
collaboration, Walker says.
“Supermarkets are so used to
competing against each other, but we
need to work together as an industry if
we want to drive change more quickly
when it comes to plastics.
“It can be solved with investment in
new technology, so everyone must be
involved, which is why I’ve already
written to the big supermarket bosses
to try and agree on best practices.”
Walker concedes that it is easier for
Iceland to make radical business
decisions than other supermarkets.
“We’re fortunate that we are a
private, British, family business, who
don’t have to chase quarterly profits. So
it’s easier for us to make positive
changes for the long term.”
Iceland isn’t an entirely familyowned business, however. Brait, the
investment vehicle of Christo Wiese,
the South African billionaire, is
reported to hold a 57pc stake in the
supermarket, with the Walker family
owning the remainder.
The Durham University graduate is
intensely passionate about the busi-
‘We’re not
perfect and
have things
we want to
improve on
… but we just
want to do
better at
basic stuff’
ness, which he is set to inherit from his
72-year-old retail tycoon father, who
founded Iceland in 1970 with a small
shop in Oswestry.
Yorkshire-born Malcolm made Iceland hugely successful for 30 years
before he was ousted as executive
chairman in 2001 when the company
released a profit warning just days after
he sold £13.5m worth of shares.
A Serious Fraud Office investigation
cleared him of any wrongdoing, but he
harboured deep resentment about his
treatment. He later bought back the
business for £1.45bn, and in a 2014 interview with The Daily Telegraph, Malcolm confessed that he had passed on
most of his fortune, reported to be in the
region of £259m, to his three children.
Nevertheless, Richard has been
working ever since he left university.
He even joined Iceland in 2012 as a fulltime shelf stacker and cashier, before
progressing to store manager at its
Swiss Cottage branch and then moving
to head office. His time on the shop
floor was a “great experience” and
“incredibly humbling”, he says.
Despite the difficulties faced by the
retail industry over the past year, with
a number of high street stalwarts struggling under cost pressures brought
about by the weakened pound, soaring
business rates and the hike in the minimum wage, Walker isn’t concerned
Richard Walker,
Iceland’s director
for sustainability,
with an example of
the non-plastic
packaging, right, he
plans to introduce
within five years to
help end the
scourge of plastic
pollution, below
about the business. “There are headwinds at the moment, but the best
thing we can do is focus on who we are,
our food and our price points,” he said.
Business rates make up the “majority” of the £1.3bn in tax Iceland has
paid over the past 12 years, Walker
notes. “The entire system is outdated
and needs a total overhaul. Online businesses like Amazon pay a tiny percentile of what we pay in tax because of
business rates, so it’s a challenge that
all bricks and mortar stores face.”
Walker says that Iceland’s 25,000
store colleagues, “many of whom have
been with us for decades”, help
maintain a good morale in the face of
an ever-changing retail landscape. After two years of continuous
growth, Iceland, which has more than
900 stores nationwide, suffered a
0.8pc fall in sales in the 12 weeks to
March 25. Its share of the UK grocery
market dropped to 2.1pc, behind lowcost rivals Lidl (5.3pc) and Aldi (7.3pc).
Walker refutes the idea that the business may suffer because of the surge
in health-conscious millennial shoppers, saying there is a “misunderstanding of frozen food being unhealthy”.
He adds: “We’re delighted about the
increasing mindfulness of health foods,
because frozen food is more healthy,
there’s less food waste and it saves you
money. We were the first supermarket
to launch a plant-based burger this year
and my father was the first to remove all
artificial flavours, colours and preservatives from Iceland food in 1986.
“Iceland is for everyone and we have
a broad church of customers who are
savvy with their money and still want
quality, including younger, healthier
shoppers. We even sell asparagus
spears and quinoa.”
Call for offshore wind turbines
to have at least 60pc UK content
the bigger prize, a genuinely competitive UK industry that can help build the
wind farms now being envisaged in the
Indian Ocean, the Sea of Japan and off
the north eastern US seaboard.”
He now wants the Government to
come up with a “sector deal” that sets
out priorities and support for companies building wind turbines and their
components. This would be similar to
the plans that the Government has
already come up with for the pharmaceutical, automotive and creative industries. In a report titled “Winning
By Alan Tovey
SIR MICHAEL FALLON is calling on
the Department for Business, Energy
and Industrial Strategy to set a target of
all offshore wind turbines containing
at least 60pc British content, a rise of
10 percentage points on current levels.
The former energy minister believes
that the growing importance of green
energy should be reflected in the UK’s
industrial strategy.
Writing to Greg Clark, the Business
Secretary, Mr Fallon said the UK is facing a “pivotal moment for offshore
wind” – adding that strengthening domestic manufacturers could make Britain a leading player in a fast-growing
global industry.
The current target of 50pc UK content is close to being met by some wind
farm developers, and Sir Michael now
wants the target to be hiked to ensure
that more of the £550m earmarked to
be spent on turbines by 2025 goes to
British companies.
“The huge investment to date has repaid the confidence shown by the Government in its future over the last six
years,” Sir Michael said. “But some of
that investment has gone to European
companies with no consequent impact
on UK skills and productivity.
“The priority now must be to ensure
that more of this investment leads to
Locally, Going Global” commissioned
by Tees Valley-based offshore energy
business Wilton Engineering Group,
which consulted with the specialist UK
offshore wind supply chain, Sir Michael
made a series of recommendations
aimed at strengthening the industry.
These include: more transparent
reporting of UK content, showing
added value in both jobs and skills;
fixed auction dates to allow better
planning by companies; and financial
support from UK Export Finance and
the UK Business Bank.
SIMON BELCHER / ALAMY
Iceland director
Richard Walker
tells Sophie Christie
of his vision for the
family chain’s future
ICELAND/PA; STEVEN SCOTT TAYLOR / ALAMY
Frozen assets
will go towards
helping the
environment
Sir Michael Fallon wants more domestic manufacturing in offshore wind turbines
The Daily Telegraph Tuesday 8 May 2018
***
5
Business
Battle to bring Interserve back from the brink
WHEN Interserve released its annual
results last week, the market was
braced for the worst. Months of profit
warnings, tense conversations with
lenders and inevitable comparisons
with collapsed rival Carillion meant
that few would have been surprised
with another shocking set of figures.
And to some extent that is what the
City got: during 2017, Interserve’s
losses widened to £244m and its net
debt almost doubled on the previous
year to £502.6m. Extra money needed
to be put aside for various parts of the
business, including a further £35m for
a delayed energy-from-waste project
that had already cost the business
around £160m.
But are these the last of Interserve’s
dark days? Debbie White, the chief executive parachuted in to turn the company around last September has, in her
own words, been “extremely busy” trying to get the business back on track.
Its management, along with the
Government, is keen to avoid another
Carillion-like situation. The rival company slid into receivership in January,
dogged by a yawning pensions deficit
and the apparent mismanagement of
‘The DNA
of these
companies
– even if
they’re going
after work
that they are
skilled in
doing – is to
go very low
on price’
GETTY IMAGES
New chief executive
Debbie White has a
very tough challenge
ahead, reports
Rhiannon Curry
hundreds of its contracts. There are
some who say that Interserve could
well face the same fate. Like Carillion,
its operations are spread across a dizzying number of subsidiary companies
and oversight of the business seems to
have slipped in recent years.
In the UK alone, the company
operates under 13 different brands.
But alongside the results, White
suggested that her plans to bring
Interserve back from the brink are
beginning to work. She says that from
day one in the post she was determined
to make changes. She implemented
some basic structures in the business
that had previously been lacking,
setting up stronger management
through a contract review committee.
This committee reviews each contract as it comes in. “That sort of thing
just wasn’t in place before,” she says,
incredulously. She has also overhauled
the top team, bringing in Mark
Whiteling, a new finance director,
from Premierr Farnell and appointing
Sally Cabrini in
n a new role as directorr
of transformation,
tion, IT and people.
White admits
mits she breathed a
sigh of relief when the company
finally signed a refinancing deal
with its bankss last month, giving
g
it total borrowing
owing facilities off
£834m. The talks had initially
y
floundered after
fter banks became
nervous about
ut lending to the
sector in the wake of Carillion’s failure. As a result, the
terms of the refinancing
are tight, and
d the extra
due diligence needed to
push the deal over the
line will not have come cheap, with
PwC, EY and law firm Ashurst
understood to have spent hours
brokering the deal.
Nevertheless, her three-year selfhelp plan is expected to deliver £40m
to £50m of benefit to the group operating profit by 2020, with a £15m benefit
expected in 2018. However, the cost of
implementing the programme was
£16.5m in 2017 and will be around
£15m this year, adding to Interserve’s
bills, at least in the short term.
Of the three main areas where
Interserve operates, its construction
business is performing the worst. This
again raises parallels with Carillion.
Losses in Interserve’s construction
division rose from £3.1m to £19.4m last
year, as the company struggled to make
money in an industry that continues to
drive thinner margins.
White has said previously that the
construction business could reduce in
size as she seeks to concentrate her
efforts on winning support
where
services contracts,
contrac
her expertise as tthe former
boss of Sodexo lies.
l
But market observers
ssuggested
uggested that she could
sseek
eek to sell tthe entire
construction
business –
c
con
struction b
before
too late. If
b
bef
ore it’s to
Interserve sold
sol the division
si
sio
n now,
now it could
around
raise
£250m on its
£250
own, wiping
ow
own
out a large
proportion
of
prop
the compa-
ny’s debt. However, if it waits, the value
of its contracts book will decrease as its
takes on fewer projects, and it would
be worth far less to a potential buyer.
White insists that even here,
Interserve has strengths.
“Both in construction and support
services, Interserve has a reputation
for doing things really well, especially
in health and education,” she insists.
Interserve’s troubles and the collapse
of Carillion have caused observers to
suggest that the whole outsourcing
industry, particularly in construction,
needs to change.
Brendan Sharkey, head of construction and real estate at professional
services firm MHA MacIntyre Hudson,
says: “The DNA of these companies,
even if they’re going after work that
they are skilled in doing, is to go very
low on price.”
He says the Government needs to
help outsourcing firms by awarding
contracts to the best business for the
job, rather than the one that offers the
lowest price.
“Ministers could make a difference
in the marketplace,” he says, adding
that the recent problems have resulted
in a change of attitudes from
companies, which have now decided
just to take on work they know they
can do.
This is what White says Interserve is
trying to ensure. “What’s really
important is that we focus on things
that we’re really good at and we only
bid for work that we know we can
knock out of the park,” she explains.
There are bright spots in Interserve’s
activities: revenue and profit at the
‘What’s
really
important
is that…
we only bid
for work
that we
know we
can knock
out of the
park’
Debbie White, left,
and King’s Cross
station in London,
above, one of
Interserve’s many
customers
equipment services business, which
provides equipment for large infrastructure and building projects in 40
countries, has grown consistently for
the last five years.
But the facts remain: Interserve is
battling half a billion pounds of debt.
This year alone, interest on its debt will
cost the company £67m according to
Sam Dindol at Stifel.
“The group’s refinancing has come
at a considerable cost,” he says.
If White does not take action to
reduce leverage quickly, it could end
up becoming a zombie business, one
source close to the company warns.
That would leave White seeking a
Government bail-out or watching
Interserve collapse completely.
There are rumblings that a rights issue could be Interserve’s best option if
it wants to raise cash quickly. Otherwise, there are “30 or 40” smaller businesses that could be sold within the
next 12 months which would raise several hundreds of millions of pounds,
one investor says. Interserve currently
has operations in Spain and the Middle
East which could be first for the chop.
While White is full of optimism, Interserve’s share price indicates the City
is not convinced by the plan. Despite
her best efforts so far, it has failed to
fully recover from a dire profit warning
in September when its shares lost half
of their value in the space of a few
hours, hitting 73.75p. Since then, they
have slipped even lower to around 55p.
At the end of last week, the price was
87.5p – a long way from the £2.42 it was
trading at this time last year. There is
still an awfully long way to go.
Formula E drives 67pc jump in sales but escalating costs hit home
FORMULA E, the company which
manages the auto racing championship
that only uses electric-powered cars,
made a £18.6m loss in the year to the
end of July, despite a 67pc jump in sales
to £84.5m, as costs continued to spiral.
The UK-based motorsport operator,
which has never made a profit since it
was founded in 2014, reported a 27pc
rise in costs to £102.9m, which offset
the higher sales. The company expects
a smoother road ahead, however, as
Formula E begins to attract more
interest from the general public.
“This should reflect in increased
sponsorship revenue streams as well as
broadcasting
and
advertising
revenues,” the company said.
In January, Formula E announced
Swiss engineering group ABB as its
new title sponsor. ABB is reportedly
paying £11m in sponsorship fees. The
results come just days after Formula E’s
chief executive, Alejandro Agag, tabled
a £536.5m (€600m) bid to wrest control
of the company from its majority
owners, which include Liberty Global,
Swiss bank Julius Baer and New-Wave,
the parent company of Weibo, China’s
answer to Twitter.
In a letter sent to Formula E’s board
last week, the Spanish entrepreneur
said: “I strongly believe in the future of
Formula E and this offer is an expres-
150mph
The top speed of cars in Formula E,
which is based in the UK. Only electricpowered vehicles are used
sion of that confidence.” According to
Formula E’s latest accounts, the company raised £9.4m in equity in Decem-
UNIVERSAL NEWS AND SPORT
By Christian Sylt and Caroline Reid
Calm seas The 139,000-tonne Royal Princess – complete with
4,610 passengers – gets set to dock at Greenock on the River Clyde.
ber. New investors include former
Formula One champion Nico Rosberg.
It followed a £29.5m fundraising
earlier in the year.
Formula E cars are powered by a
200kW motor, giving them a top speed
of 150mph. As they produce little noise
and emissions, the races can be held in
city centres. There are 12 locations on
the calendar, including New York,
Paris and Rome. Its green credentials
have attracted manufacturers like
Audi, Jaguar and Nissan. Later this year
they will be joined by PSA PeugeotCitroën’s premium DS brand, while
Mercedes and Porsche will be entering
in 2019. Sponsorship from Visa, DHL
and Hugo Boss is the single biggest
source of revenue for Formula E.
Last year sponsorship money accounted for 49.7pc of sales, with 30.3pc
generated from race hosting fees, while
broadcasters, including Channel 5,
provided the bulk of the remainder.
6
Tuesday 8 May 2018 The Daily Telegraph
***
Business
Few assets are more unloved
than UK utilities, so now’s
the time to buy National Grid
Questor
Stock Picks
The shares have
recovered to a fourmonth high – but
there could be
more to come, says
Russ Mould
THE Bank of America Merrill Lynch
Grid. Utilities are unloved owing
survey of fund managers continues
to perceived political risk, tighter
to suggest that British stocks are
regulation by the current regime and a
among the least popular assets with
wider preference among investors for
professional investors at the
growth stocks.
moment – if not the least.
Meanwhile, 40pc of Grid’s
National
But an asset that is
assets are in the US (so
Grid
unloved can also be
their value rises as the
undervalued.
pound falls), it offers
Buy
One of the UK market’s
a fat yield, and comes
key attractions is its fat
with a price tag that
Good price for
Cadent disposal;
4pc-plus dividend yield
appeals relative to both its
positive signs from
for 2018. As a bonus,
American peers and the
America
economists continue to
“regulatory” value of its
suggest that the pound is
assets in Britain, while the
undervalued on a “purchasing
downside seems limited even
power parity” basis, especially
in the worst case of nationalisation
after the Bank of England’s latest
some time in the next decade.
vacillations on interest rate policy.
The shares stand at a four-month
Some shrewd contrarians are
high and there could be more to come,
already paying attention, it
which would support this column’s
seems: the FTSE 100 has just
“buy” stance on the stock in October
reached a three-month high,
2016, a view that has ( just about) paid
despite the welter of bearish
for itself with the help of last year’s
commentary on the UK market.
special dividend.
One stock that ticks a lot
Recent news from Grid has
of the right (contrarian)
been positive, despite last week’s
boxes is National
resignation of Andrew Bonfield, the
National Grid
 Market value:
£28.6bn
 Turnover
(March 2018 est):
£15.7bn
 Pre-tax profits
(March 2018 est):
£2.6bn
 Yield (March
2018 est): 5.4pc
 Most recent
year’s div: 47.47p
 Net debt (Sept
2017): £25.6bn
 Return on
capital (March
2017): 5.9pc
 Cash conv
ratio (March
2016): 46pc
 p/e ratio
(March 2018 est):
14.6
12
11
10
9
8
7
2013
2014
2015
2016
2017
well-respected chief financial officer.
First, the company has reached
an agreement to sell its remaining
25pc stake in Cadent, the British gas
distributor, for £1.2bn. The price was
higher than some analysts had been
expecting, while the disposal brought
National Grid’s plans to refocus its
portfolio on higher-growth assets back
to investors’ attention.
Second, National Grid, in
recognition of its substantial
infrastructure investment, has
received regulatory approval in
upstate New York to increase
residents’ electricity and gas bills by
2pc to 4pc over the next three years.
a nice hedge against any political or
regulatory upset in the UK.
Results due on Thursday next week
could be the next step in revealing
the potential of the US assets and the
group’s lowly valuation on an asset
basis, so now looks like a good time to
top up.
Questor says: buy
Ticker: NG.
Share price at close: 851p
Key
numbers
Close: 851p
13
£
2018
Update: Morrisons
This could pave the way for clearance
across other parts of its US network.
The latter news may be particularly
telling, as it suggests that the American
assets could start to show previously
unexpected levels of growth, to the
benefit of group profits, cash flow and
dividends.
As an energy transmission play
there is also potential for Grid to
benefit from the rise of electric
vehicles (as recharging infrastructure
will be required) and even the ongoing
rise of US shale gas.
The north-eastern US assets are
also well beyond the reach of any
British authority, to make the stock
The recent surge in Morrisons’ share
price may seem surprising, given the
strategic threat posed by the planned
Sainsbury’s-Asda merger, but to
Questor’s mind it makes sense.
Should the Sainsbury’s deal go
through, the combined entity will
probably have to sell some stores in
exchange for regulatory approval and
Morrisons may be better placed than
Tesco to buy them, at a potentially
advantageous price, on competition
grounds.
The planned transaction also
puts the spotlight back on the
strategic value of Morrisons’ existing
relationship with Amazon and how the
firm’s £5.8bn market value compares
with the £7.2bn book value of its fixed
assets and store estate.
Questor says: buy
Ticker: MRW
Share price at close: 245.86p
Russ Mould is investment director at AJ
Bell, the stockbroker
Read Questor’s rules of investment before
you follow our tips: telegraph.co.uk/go/
questorrules; twitter.com/DTquestor
Share prices www.telegraph.co.uk/shares
52 week
High Low (p) Stock
The share prices, price-earnings ratios and dividend yields
below are supplied by Interactive Data (Europe) Ltd.
The yields are calculated using historic dividend payments
divided by the closing share price multiplied by 100.
Price(p) +/- Yld
P/E
Engineering / Industrial 4 May
52 week
High Low (p) Stock
Price(p) +/- Yld NAV
1992½ 1692 Prudential
1893½* +10 2.5 20.3
672½
Government securities 4 May
52 week
Rdm
High Low (£) Stock
Flat
Price (£) +/- Yield Yield
591⅜ RSA
637¼* -2¾ 3.1 24.2
1043
728½ Bodycote ●
921* +14 1.9 18.1
1279½ 1051 St James Place
1159* +8 3.7 41.7
490
400 Castings
420
— 3.3 14.1
448⅝
349⅜ StndrdLifeAber
362¼* -5⅜ 5.9 12.2
90
59½ Coats Group ●
78¾*
+⅛ 1.4 18.4
1975
1350 Cropper J
1435
— 0.8 28.4
624½
279 Fenner ●
608*
-1
—
52 week
High Low (p) Stock
Investment trusts 4 May
34.5
342
296 Jup UK Gwth IT
Price (p) +/- Yld
NAV
52 week
Price (p) +/- Yld
NAV
+4 2.1
339
327
132.43 123.14 Treas 8% 21
121.88 -0.15 6.56 0.80
2128
1510 Goodwin
1800
1845
1633¾ Keystone Inv Tr
1760 +7½ 3.4 1997
132.85 123.92 Treas 5% 25
124.93 -0.17 4.00 1.19
1453
1004 IMI ●
1078* +18 3.7 18.0
975
804½ 3i
945 +6¼ 1.7
705
652
549⅞ Law Debenture
607
153.80 142.35 Treas 6% 28
144.40 -0.17 4.16 1.46
5192⅛ 4403⅞ Jardine Mthsn
4452¾* +20½ 2.7
—
272⅜
201½ 3i Infrastructure ● 219¾ +¼ 4.5
212
1590
1440 Lowland Inv
139.32 105.24 Treas 4¼% 32
132.34 -0.13 3.21 1.66
91
51 Low&Bonar
-1⅝ 5.7
-9.1
125
113½ Aberdeen Diversified 122¾ +1 4.5
125
311
270 Majedie
290
— 3.4
363.52 133.71 Treas 4¼% 36
138.12 -0.28 3.08 1.75
261⅞
2⅛ Melrose Ind
231½* +⅜ 1.8 -192.9
547
408 Aberdeen New India 455
—
—
528
250
222 Mtn Currie Port
242 +3½ 1.7
156.85 146.14 Treas 4¾% 38
150.96 -0.32 3.15 1.78
2145
1935½* +41 2.8 15.8
774
680 Alliance Trust ●
+5 1.8
773
1353½
865 Allianz Tech Trust
1322½ +20 — 1318
Index Linked Securities
88
1684 Mondi
59 Severfield
53⅝
77⅜
— 2.4 21.3
+¾ 3.2 15.1
High Low (p) Stock
731
52 week
High Low (p) Stock
With the London stock market closed for the Bank
Holiday, our tables today show the last pricing date of
the stocks in the sector headers.
Normal listings will resume tomorrow.
52 week
High
Low Stock
Price (p) +/- Yld
P/E
Mining 4 May
1.6
66
351¾
205 Kenmare Res
239 +19 —
17.9
95
120½
54 Lonmin
60
+1¼ —
-0.2
2326
1696 Weir ●
2172* +12 2.0
346
302¾ BlckRck Grt Euro
331*
-1 1.6
350
86½
64⅝ Nthn Venture
67½
+½ 16.3
70
1074
577¾ Polymetal ●
727¼ +4⅜ 4.5 12.0
214
185 BlckRck Inc&Grth Inv 197
— 3.4
210
268
234 Pacific Assets
259½ +1 1.0
271
8255
5540 Randgold Res
6050* -58 2.4 27.6
501½
400½ BlackRock Latin
+2 2.1
535
2000
1720 Pantheon ●
1990 +5
171
144 BlckRck NrthAmerInc 158 +2¼ 5.1
167
411⅝
329½ Perpetual Inc & Gr ● 364½ +2 3.8
Price (p) +/- Yld
P/E
533½ BAE Systems
613⅜* +⅜ 3.6 22.9
219
162 Chemring
206½ +1½ 1.5 86.0
150¼
110 Cobham ●
119
322⅞
190¼ Qinetiq
682½
+¾
—
3020
2488 Caledonia ●
3981* +26 3.2 20.9
144
111⅞ Candover #
—
201
176¾ City Merchants HY 193¼* — 5.2
130⅝
106 City Nat Res H Yld
117¾* +½ 4.4
143
444⅝
392 City of Lon ●
427*
+3 4.1
419
4557½ 3678½ Unilever
Aerospace & defence 4 May
52 week
High Low (p) Stock
590¼ +5⅝ 4.8 10.7
Gas & Water 4 May
— 2341
406
40
⅜
Hummingbird
34
+¾ 4.1 11.9
—
— -12.8
4226½ 2882½ Rio Tinto
4075 +75 5.2 11.2
981¾
738
558½ Vedanta Res ●
-7⅝ 5.9 -121.7
41680 38700 Personal Ass ●
39400 +250 1.4 38851
580
173¾
109 PremierGlblInfra
132½ +1 7.6
446
2030
1812 RIT Cap Ptnrs ●
2010 +5 1.6 1866
222
242
218⅜ Ruffer Inv Pref
231½ +½ 0.8
228
558⅛
437 BP
558⅛ +14¼ 5.3
+7 1.6
820
383⅛
286½ Schroder Asian TR
359*
— 1.3
349
237
164¼ Cairn Energy ●
231⅜ +3
+2 2.1
857
383
339½ Scot American
368½ +5 3.0
353
45¼
22½ EnQuest
35
-½
2765 +65 2.0 3314
973½
771 Scot Invest ●
844*
+8 2.4
923
844
376½ Hunting ●
794 +16½ — -65.4
115½
157
487¾
376½ Scot Mortgage
487 +5¼ 0.6
470
827
4¼ Petrofac ●
607⅝* +3 4.6 -96.6
190
177¼
155½ Sec Tst of Scot
166
+½ 3.6
178
104½
42¾ Premier Oil
179⅞
167 Seneca Global
175¾
— 3.6
174
2579½ 1996 Royal D Shell A
—
1.3
-1¾ 2.4
— 11.7
522⅝ Tate & Lyle ●
… 4.0
-¼ 7.1
— 8.7
796½
70¾ Procter & Gamble $ 72⅜
836½* -3½ 2.7
63
778
2.7
94⅝
0.9
89½
687½ Brunner
+⅛ 3.9
2.0
88½ Northern 3 VCT
796
35
121⅛ +1⅝ 2.3
61½ Northern 2 VCT
-5.9
31⅝ Pfizer $
174¼ +¾ 2.1
102
—
39⅜
109⅛ United Tech $
77
—
0.9
-8 3.4 -75.9
151¾ Rockwell $
368
293
96½ +1¼ 1.7
139¼
160
282 REA Hldgs
67⅛ Microsoft $
210¾
-½ 3.2
360
97⅞
4667* +47 1.6 22.5
164½ +2½ 3.1
660 British Empire Trust ● 731
0.5
8.3
180½* -1⅛ 1.2 55.8
144 BlckRock FroInv
755
-⅜ 3.3
3656 Intercont Hotels
311 BlackRck Emer Euro 342½
-2 2.1 23.6
1.6
57⅜
107⅞ Mandarin
169½
884
165¼ +⅛ 2.4
52⅞ Merck $
4944
393
670½ Hilton Food
142⅝ McDonalds $
66⅜
211⅜
5830* +75 1.5 27.2
910
178¾
+9 2.0 16.1
—
1210* — 2.5 19.7
—
+¾
141
871 Vitec
-½
111
955
— 4.5
5090 Spirax ●
202½ Highbridge MultiStrt 223½
76⅛ FirstGroup
889¼ Fullers ‘A’
-6 4.0
6155
226
154½
1124
286
1320
2966 -24 1.6 22.2
—
150⅛
274.84 263.31 Treas 2% IL 35 265.71 -0.47 1.18 0.00
3497¾ 2682 Cranswick ●
+2 2.6
-2¾ 1.5 15.4
266 Town Centre
10-year Government Bonds
The share prices, price-earnings ratios and dividend yields
below are supplied by Interactive Data (Europe) Ltd. The
yields are calculated using historic dividend payments divided
by the closing share price multiplied by 100.
2.5
543
414
139⅜ Tritax Big Box ●
1188 +4 4.3 1149
+1 1.7
+¾ 1.0
151⅜
1127 Murray Intl ●
390 +3½ 4.0
20½
318¾
1314
527
10½ Marathon Oil $
481⅝ -8⅜ 9.2 13.3
84
307⅛ BlackRock Wld M
20
1309* +12½ 2.3 23.3
— 5.0
415½ BlkRk Throg Tst
1641 +28 2.5 21.2
169¾ Evraz
79¾
425
1698⅝ 1136 easyJet
1150½ Fresnillo
539
66¼ BlackRock Com
536
—
1746
+8 4.9
83
— 1.9 23.8
-¼ 7.3
498½
514*
3048* +26 2.5 19.5
2450
36⅛
450 Merchants Tst
2053 Smurfit Kappa
140¼* +¼ 2.9 18.2
31¼ RDI REIT ●
1885 Mercantile InvTr ● 2160* +10 2.5 2415
3254
118 Carr’s Grp
4.2
41
2220
375.00 353.40 Treas 4⅛% IL 30 359.89 -0.16 2.34 0.00
2142 Coca-Cola HBC
+¼ 2.1
518⅜
360*
2711
0.1
96⅞
678 +37⅜ 2.8
219½ +6¼ 1.1 37.1
154
124⅞ +⅝ 2.7
93½ Manpower $
558 IAG Intl Cons Air
270 Glencore
–
121¼ Johnson&John $
136⅞
680⅝
186⅛ Hochschild Mng ●
-1.55
148⅜
1560 +1½ 2.2 21.9
—
416⅞
+2.42
4754 +55 2.8 17.8
1765⅞ 1396½ Compass
-4 1.6
337⅝
+0.87
4427 Carnival
—
1007
845
2.95
5435
— 5.4
920 Shaftesbury ●
774
1.40
—
119½
1055
+8 4.6
Great Britain
—
121 Raven R CnvPref
161⅛ +4⅜ 5.7 11.3
130⅝ Centamin ●
+8 0.2
United States
19 Raven R Wts
121
180⅞
794
1410 -7½ 1.8 1576
29
243
772
1446¼ 1155 BlackRock Small
2.9
3.2
871*
710 Murray Income
2706 +11 1.5 17.8
-½ 3.7
109¼ +¾ 2.1
729½ GVC Hldgs ●
654½ Monks ●
2386 Ass Brit Fds
51¾
81⅝ JP Morgan Ch $
996
825
3387
50 Intl Paper $
119⅜
—
826½
-2.42
67
640* +1¾ 2.6
743
-2.91
—
Travel & Leisure 4 May
477¼ Segro
874
–
20
2.0
654⅜
—
-0.49
—
+⅝ 2.2
1601⅜ +43⅜ 4.5 19.6
+6
0.53
6.9
2.9
53½
1662⅜ 1103 BHP Billiton
+2 2.2
0.04
—
— 8.4
+⅝ 2.1
33¼ Intel $
326
701
Japan
-½
143
87¼
55¾
Price(p) +/- GrsYd Cvr
1721 -14 5.9
872*
Germany
44½
127 Raven R C R Prf
79⅝ Inger Rand $
1310 Go-Ahead Grp ●
650 Biotech Growth
463*
41⅜ Raven Russia
156
97⅝
2004
761 Bankers Inv ●
Food producers 4 May
52⅝
52 week
High Low (p) Stock
7.5
967½* -2½ 3.1 16.5
883½
-2.19
—
P/E
+4 3.7
256
837 Savills ●
927
+0.23
— 4.1
Price(p) +/- Yld
1046
531¾ +3⅜ 2.9 24.1
0.76
552
185¼ Wincanton
996* +12⅜ 3.8 17.7
1071
1637 +9 2.7 11.5
France
471 Mucklow A J
309
11⅛ Antofagasta
1537½ -2½ 3.3 1635
5¼ Smith (DS)
3.0
564
52 week
High Low (p) Stock
383¾ Safestore
1751⅜* +19⅜ 4.3
1354 Smiths Gp
T-Bonds
—
330⅞ St Modwen ●
950⅛ Anglo Amer
1697
Spread vs
— 3.5
553½
1870
565
Bunds
263
429⅜
675
372.89 354.79 Treas 2½% IL 24 360.08 -0.12 1.96 0.00
Spread vs
P/E
192¼ McKay Secs
9.5
+3 2.9
373.15 360.81 Treas 2½% IL 20 361.77 -0.12 2.29 0.00
Yield%
Price(p) +/- Yld
289
150
●
●
—
11.9
8.0
845½
618 Unite ●
—
147¾
95⅞ Marston’s ●
106
110
73⅛ Wal Mart Strs $
85¾
325
237 Urban&Civic
316
-2 1.0 65.8
286¾
219⅞ Mitchells&But ●
278⅜ +1 1.8 18.4
113¼
96¼ Walt Disney $
102¼ +1⅛ 1.6
4.2
105¼
97 Warehouse REIT
100
— 2.5
97
414⅛
337¼ National Ex ●
397* -4¼ 3.4 15.4
37⅜
27⅛ Xerox $
27⅞
-½ 3.6
0.6
1135
840½ Workspace Gp ●
1090
-8 2.1
—
8967
6027⅜ PaddyPwrBet
6850* -5 2.9 26.6
Retailers 4 May
361
163¾ Brown N
224¾
31⅞ Carpetright
708½
571⅞ Dairy Farm
193
-⅞ 7.4 43.8
40¾
—
7.5
1020
670 Playtech ●
775* +3⅜ 4.1 11.9
250
167⅜ Rank Group ●
172⅜
— 4.3 10.6
381¾
229¼ Restaurant Gp
307
-⅝ 5.7 18.7
1798⅝ 1253¾ Ryanair
1402⅞ +22⅞ —
Europeans 7 May
81¾
71⅝ Akzo Nobel €
75¾
+⅜ 3.3
1.3
15.1
97½
77⅛ BMW €
91½
— 4.4
2.6
40.8
217⅝
124⅜ Stagecoach ●
152
-3¼ 7.8 27.6
23⅝
15½ Carrefour €
16¾
… 2.7
1.5
617¾* -3⅜ 2.5 28.0
135⅜
87¾ Thomas Cook ●
132¾
-¾ 0.5
257⅜
186½ Continental AG €
228¼ +1¼ 2.0
3.3
—
—
1732
1098 TUI AG
1729½ +6½ 3.3 17.8
76½
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70⅜
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1664½ 1495¼ Cablevision Hldgs
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202
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277
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189⅞
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367¾
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2214 Persimmon
2730
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512
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211⅞
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317⅜* +2¾ 1.2
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2782 +32 0.8 99.0
1030
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1000 +4 2.0 21.4
4260 AstraZeneca
380½ Robt Walters
724
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143½ -1¼ 2.6 -14.2
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Net Asset Values © 2018 Morningstar Estimated at previous
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293
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344
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773
547½ -2½ 1.4 23.7
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197
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162
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Americans 7 May
52 week
Telecommunications 4 May
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39⅛
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38⅛
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318
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334¼ Inmarsat ●
378⅛* +2 3.9 12.8
103
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371⅝
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133⅞
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127½ +1⅞ 3.5
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326⅛
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The Alternative Investment Market is for young and growing
companies. Shares may carry higher risks than those with a full
quotation, and may be difficult to sell.
3.3
3856 +13 0.7 11.1
2184
●
+4 1.7 16.9
742
750*
—
1⅜ Johnson Serv
750
184⅞
217¼ JPM Chinese
Insurance 4 May
151¾
Pharmaceuticals 4 May
2552 -20 1.0 47.4
659½ JPM Claverh’se
-5.3
—
-2.9
1469¼ +16⅝ 5.4 46.8
346¾
—
—
87⅛ Soco Intl
●
1724½ 1179⅜ GlaxoSmKline
760
—
Electricals 4 May
1176½ SSE
15⅝
331 TR Property ●
2901
1554
14⅜ Sinclair Ph
431 Stand Life Eq Inc
205⅜
733 Nat Grid
35
414
-2 1.9 43.0
1174⅜
260½* +1⅞ 3.7 17.1
— -28.0
502
314
218 Drax Group ●
— 1.5
968
252 Nth Midland Con
368¾
-¾
27
147
379⅞
Electricity 4 May
27¾
22⅛ Share
-⅞ 5.5
421 CML Micro
3750
17¾ Rockhopper Exp
29
+2 2.4
570
5820
28½
5570 +14 2.0 17.9
862
1332* +10 3.4 11.2
1064 Halma
1705 +16 1.9 25.0
719 ICG Enterprise Tst
1067 Morgan Sindall
1341
— 0.9 82.8
133 HICL Infrastructure ● 143⅜
1520
+4 2.0 81.3
571
1496 HgCapital
19½
431
411 Restore
866
17⅛ BSD Crown
250¾ discoverIE Grp
5.7
602
175½
25
435
P/E
— 6.7
1940
750 +2½ 2.1 13.9
—
Price (p) +/- Yld
75
694 +10 1.1 22.4
428⅝ -9¼ 3.3 19.9
+8
Low Stock
-1.3
74 Prime People
3544 +32 0.4 52.6
360¼ Marshalls ●
514
High
—
1298* -4½ 2.0 20.0
681½ Grafton Gp ●
480 Dialight
P/E
—
495⅜ Mediclinic Int
851
1099
Price (p) +/- Yld
243
9¾
1173 Smith & Nep
486⅝
8.9
High Low (p) Stock
52 week
85¾
+¼ 6.8
639 UBM ●
990*
+1 2.4 26.7
1074 WPP
1281 +7 4.7
3.7
8.9
52338 430⅜ Hammerson
●
195½* +½ 7.2
—
554⅜ +2⅜ 4.6
—
-1½ 2.3 11.1
—
25.4
890⅛
7.3
2663* +39 2.3 13.3
52 week
OneView Group
—
—
1442
2024
4270
419½ Costain
228¼* +3¾ 1.8 38.6
9.1
3357 +14 3.9
494
181⅜ ConvaTec Grp ●
9.2
2718 Bellway ●
-5 1.9 1265
349⅛
561⅝* +¼ 7.7
3805
90½
Healthcare 4 May
7.5
298¾* +1⅛ 1.2 12.2
5.2
4330* +33 1.2 29.6
2735½ 2234 Diageo
155½ Stock Spirits
-1.5
396
1315 Close Bros ●
Beverages 4 May
—
318⅞ Ashmore ●
1704
8.3
—
447¼
220⅛
2454¾ 1485¼ Secure Trust Bk
1⅜
Tobaccos 4 May
5643⅝ 3553 Brit Am Tob
3739
2298 Imp Brands
3888* -10 5.0
Transport 4 May
386½
285 Helical
377
29½
12¾ Gen Electric $
14⅛
… 3.4
1.4
608¼
483⅝ H K Land
540* -1¼ 2.7
3.1
370⅜
290 BBA Aviation ●
321⅝* +1⅜ 3.1 37.5
207⅝
144¼ Home Depot $
184⅜
-¾ 2.2
1.8
1217
900¼ Land Secs
980
-2¾ 4.4
—
3475
1950 Clarkson ●
2480 +50 2.9 23.8
165⅛
129 Honeywell $
144½ +⅝ 2.1
0.8
34½
29¾ Local Shopp REIT
32½
—
—
42
543½
300 Northgate
371¼ +3¾ 4.8
24¾
17⅛ HP $
21¾
… 2.6
2.7
191⅞
162¼ LondonMetric ●
189½ +⅞ 4.0
—
603
367¾ Royal Mail
598¾ +5⅜ 3.9 21.8
171⅛
139⅛ IBM $
143¾
-⅛ 4.4
1.0
8.1
Bold FTSE100 Stocks
* Ex-dividend
§ Ex-rights
●
FTSE250 Stocks
† Ex-scrip
# Suspended
Cover relates to the previous year’s dividend.
Yields are net of basic rate tax.
‡ Ex-all
P/E
The Daily Telegraph Tuesday 8 May 2018
7
**
Business
CEOs admit that
they were not fully
ready to be top dog
NEARLY two-thirds of newly
appointed chief executives do not feel
fully prepared for their current role,
a study has found.
Recruitment firm Egon
Zehnder asked 402 sitting chief
executives from 11 countries, including
36 in the UK, about what it felt like to
take on the responsibility of being the
top dog at a company.
Just under 50pc of respondents said
they felt “somewhat prepared” for
their new role, while 8pc said they felt
“somewhat unprepared”, and a further
1pc said they were “completely
unprepared”. Only 32pc of the chief executives
surveyed said they felt fully prepared
for the job.
Half of the chief executives asked said
it was more
e difficult to drive change
within the company than they had
expected prior
prior
to taking up
p the
position, and
nd
47pc said itt
had
BLANC PHOTOGRAPHY
been more difficult to develop a senior
leadership team than anticipated.
The authors behind the report said
it was “clear” that chief executive
candidates need more preparation in
terms of how to cultivate and manage
culture change.
“This study shows, we believe, that
as confident as many chief executives
are, there are many aspects of the role
that they are not prepared for – and
possibly cannot prepare for in the
traditional sense,” says Egon
Zehnder’s Kati Najipoor-Schuette.
Partha Goswami, chief executive of
online marketplace OOSTOR.com,
which launched last year, said the role
of chief executive is often seen as
glamorous, but in reality you spend
“hours pulling out your hair trying to
solve every problem under the sun”.
“As chief executive it isn’t just
yourself you need to worry
about,” he
w
says. “You need to be a mediator
between
bet
departments
and
de
staff,
sta you have to
ensure
people
e
get
g on and work
By Sophie Christie
chief executive was dealing with the
tight cash flow and making people
understand that it isn’t about turnover,
but about how much cash is coming
through the door and how much of
that you keep.
“It takes 90 days for supermarkets
to pay us for our bottled beers, so our
outgoings are more frequent than our
incomings.
“I didn’t expect to be having
arguments with bank managers as the
chief executive.”
As well as getting to grips with
the implications of a tight cash
flow, Magnall says that one of the
biggest difficulties he faces as the boss
was getting his team to understand
how market dynamics work.
“Most of the people in the company
were born and raised in Suffolk, so
their understanding of the wider
world of leisure and the drinks
industry was somewhat limited. I
made it a priority to introduce training
and development initiatives and now
the team fully understand the
industry.”
Frank Jan Risseeuw says that the
reality of becoming the boss of money
management app Yolt was not too
dissimilar from his expectations.
“I’ve found that being chief
executive is a real juggling act
between your own work and
supporting the wider team, ensuring
they remain focused, motivated and
have everything they need to do their
job to the best of their ability.
“The title of chief executive does not
determine who you are. Like any
position the role is what you make of
it, the responsibilities you choose to
take on, and how you conduct
yourself.”
Steve Magnall,
chief executive
of Suffolk-based
independent
brewery
St Peter’s,
says that the
greatest pressure
he faces comes
from himself
productively with each other. It takes a
lot of energy to maintain an effective
workplace chemistry.”
Goswami says that having
shareholders added an extra layer
of pressure, “as all responsibility
and blame falls on the chief executive”.
She adds: “If you have shareholders
it is even more pressure, they will be
asking constant questions regarding
returns and business progress, and as
CEO you are the one held
accountable.”
Mark Cuddigan has been at the
helm of the £65m baby food
brand Ella’s Kitchen since 2013.
Because the company “values
autonomy and responsibility for
everyone in the business”, Cuddigan
says he felt prepared to step up from
his role as sales and marketing director
because he was already used to the
pressure of decision-making.
Dealing with the purchase of Ella’s
by a NASDAQ-listed American
company was one aspect of his role as
chief executive that “brought many
surprises”, he says.
“But I can honestly say that the daily
reporting aside, it’s been an inspiring
journey.”
Much of the pressure of being chief
executive is self-imposed, Cuddigan
says. “I put a great deal of pressure on
myself, as I know what an
extraordinary company Ella’s is, and
how much the brand means to so
many parents and little ones. I try very
hard to make Ella’s the best possible
place to work.”
Steve Magnall, chief executive of
Suffolk-based independent brewery St
Peter’s, agrees that the greatest
pressure comes from himself,
“because I know that if I get it wrong,
the livelihoods of the 47 people I
employ are at stake”.
Magnall joined the brewery as chief
executive two years ago to implement
a turnaround strategy, focusing on
reducing costs, increasing
productivity and boosting retail and
trade opportunities.
“The biggest shock when I became
Market data
Unit trusts & open-ended investment companies prices www.telegraph.co.uk/funds
World market indices Name
Index
Init chge
Mid
Sell
Change
Buy on day
Change
Name
Init chge
Sell
Mid
Change
Buy on day
+0.33pc
No 1, Poultry, London EC2R 8JR. 020 7415 4130
È Brazil
Bovespa
82714.42
-403.61
-0.49pc
Maitland Discretionary Inc
Ç China
Shanghai Composite
3136.64
+45.61
+1.48pc
CAC General
5531.42
+15.37
+0.28pc
DAX
12948.14
+128.54
+1.00pc
Hang Seng
29994.26
+67.76
+0.23pc
Ç Hong Kong
Ç India
S&P CNX500
9418.80
+79.05
+0.85pc
È Japan
Nikkei
22467.16
-5.62
-0.03pc
Ç Russia
RTS
1153.85
+7.24
+0.63pc
Straits Times
3532.86
-12.52
-0.35pc
Ç Spain
Madrid SE
1027.38
+3.73
+0.36pc
Ç Switzerland
SMI Index
8978.65
+74.82
+0.84pc
Ç USA
Dow Jones
24357.32
+94.81
+0.39pc
Ç USA
Nasdaq
7265.21
+55.60
+0.77pc
È Singapore
Commodities summary
Price
È Gold
per troy oz
È Silver
Change
-0.96
$1313.71
-0.07pc
-0.63pc
3.00 2406.12 2555.65
+13.8
AXA Investment Managers UK
Limited
7 Newgate Street, London, EC1A 7NX
www.axaframlington.com Cust Svs: 0845 777 5511
Fidelity International
Amer Gwth Acc
5.25
602.3
+1.30
Biotech Acc
5.50
167.5
-2.70
Emerg Mkts Acc
5.25
269.8
-1.50
130 Tonbridge Road, Tonbridge, Kent TN11 9DZ
Call free: Private Clients 0800 414161
Broker Dealings 0800 414181
European Acc
5.25
904.4
-0.60
Unit Trust
Financial Acc
5.25
*677.0
-3.80
Global Opp Acc
5.25
*1436.0
+5.00
Wealthbuilder
Global Opp Inc
5.25
*1267.0
+5.00
Investment Funds (OEIC)
Global Tech
5.25
111.2
+0.70
3.50
-0.6
136.9
£12.14
-0.08
£964.92
-10.74
-1.10pc
Health Acc
5.50
*1793.0
-7.00
Cash Fd Y
–
100.01
+0.01
È New Sovereign
£224.04
-0.11
-0.05pc
Japan Acc
5.25
613.3
+3.20
Cash Fd Y Accum.Units
–
100.36
…
È Maples
£964.92
-6.38
-0.66pc
Managed Balanced Acc
5.25
393.6
+0.40
Income Funds
È Platinum
per oz
£662.37
-1.36
-0.20pc
Ç Palladium
per oz
£713.74
+0.77
+0.11pc
Managed Income Inc
5.25
*142.1
…
grade A
£5044.59
-19.03
-0.38pc
Managed Income Acc
5.25
*995.8
+0.40
Enhanced Inc Fd
3.50
high grade
£15601.74
-58.86
-0.38pc
£1706.83
-6.44
-0.38pc
Monthly Inc Inc
5.25
260.3
…
Extra Income Fd
3.50
27.58
+0.03
£2260.30
-8.53
-0.38pc
Monthly Inc Acc
5.25
631.3
+0.10
Moneybuilder Bal
–
49.54
+0.05
UK Growth Acc
5.25
309.2
+0.70
Moneybuilder Inc
–
36.54
+0.09
UK Select Opps R Inc
5.25
*1947.0
+5.00
Growth & Income Funds
UK Select Opps R Acc
5.25
*3572.0
+9.00
UK Smllr Cos Acc
5.25
*311.7
+0.60
È Copper
È Tin
È Lead
È Zinc
special high grade
È Aluminium
£1726.73
-6.51
-0.38pc
£10280.79
-38.79
-0.38pc
high grade
È Nickel
Æ Baltic Dry Index*
1384.00
unch
per tonne
£145.40
unch
Jul settlement
$76.17
Æ Wheat
Ç Brent Crude
+1.30
+1.74pc
*Copyright Baltic Exchange Information Services Ltd.
Exchange rates
AXA IM Funds www.axa-im.co.uk
Mid
Change
Buy on day
Mid
Change
Buy on day
73.4
-0.21
Jupiter Dstrbtn Inc
–
*59.17
+0.04
M&G Corp Bond A Acc
3.00
*69.62
+0.11
5.00
177.0000
…
JPM Global Macro Opps A Inc 3.00
72.71
-0.21
Jupiter Dstrbtn & Grth Inc
–
*123.78
-0.10
M&G Dividend A Inc
4.00
61.68
+0.02
Multi-Mgr Inc&Gwth A Inc
5.25
154.9000
…
JPM Global Uncons Eq A Acc 3.00
1324.0000
-6.0000
Jupiter Eco Inc
–
*380.42
+1.26
M&G Dividend A Acc
4.00
686.8
+0.18
Multi-Mgr Mangd A Acc†
5.00
*279.9000
…
JPM Global Uncons Eq A Inc 3.00
98.3200
-0.4600
Jupiter Emerg Euro Opps
–
204.94
-1.80
M&G Episode Growth A Inc
4.00
*60.95
-0.21
Multi-Mgr Mangd A Inc†
5.00
*272.8000
+0.10
JPM Japan A Acc
3.00
477.7000
+2.7000
Jupiter European
–
2219.40
+2.42
M&G Episode Income A Inc
4.00
*129.57
-0.16
Sterling Bond Acc†
4.25 *220.5100 230.0300
…
JPM Japan A Inc
3.00
115.0000
+0.6000
Jupiter Euro Inc Acc
–
82.57
+0.25
M&G Episode Income A Acc
4.00
*170.82
-0.22
Sterling Bond Inc†
4.25 *64.8300 67.6200
…
JPM Multi-Asset Income A Acc 3.00
*94.6700
-0.1900
Jupiter Euro Inc Inc
–
56.65
+0.17
M&G Global Dividend A Inc
4.00
*203.41
-0.41
Strategic Bond A Inc
4.00
*122.5000
+0.10
JPM Multi-Asset Income A Inc 3.00
*64.5900
-0.1300
Jupiter Euro Special Sits
–
423.96
+1.27
M&G Global Dividend A Acc
4.00
*279.42
-0.56
UK Absolute Return A Acc
5.00
158.4000
…
JPM Multi-Asset Inc A Mth Inc 3.00
*64.5600
-0.1300
Jupiter Fin Opp
–
*623.69
-0.80
M&G Glbl Emrgng Mkts A Inc 4.00
265.76
-1.56
UK Alpha A Acc†
5.25
154.7000
…
JPM Multi-Man Gwth A Acc
3.00
1007.0000
-1.0000
Jupiter Fund Of Inv Trusts
–
*256.90
+0.03
M&G Glbl Emrgng Mkts A Acc 4.00
287.68
-1.7
UK & Irish Small Co A Acc
5.00
675.0000
-1.00
JPM Multi-Man Gwth A Inc
3.00
921.1000
-1.1000
Jupiter Global Emg Acc
–
70.57
-0.39
M&G Glbl High Yld Bd A Inc
3.00
*49.86
-0.06
UK Equity Income A Inc
5.00
*646.5000
+0.50
JPM Natural Res A Acc
3.00
638.0000
+0.7000
Jupiter Global Eq Inc Acc
–
71.24
-0.07
M&G Glbl High Yld Bd A Acc
3.00
*131.02
-0.16
UK Index A Acc
–
635.5000
-0.30
JPM Natural Res A Inc
3.00
44.7100
+0.0500
Jupiter Global Eq Inc Inc
–
62.37
-0.06
M&G Global Macro Bd A Inc
3.00
*82.93
+0.07
285.4000
-0.20
JPM Sterling Corp Bd A Grs Acc 3.00
*92.8000
+0.2400
Jupiter Global Managed Acc
–
232.09
-0.16
M&G Global Macro Bd A Acc
3.00
*126.1
+0.11
1015.0000
+1.00
JPM Sterling Corp Bd A Grs Inc 3.00
*55.3800
+0.1400
Jupiter Global Managed Inc
–
223.08
-0.15
M&G Global Themes A Inc
4.00
883.22
-0.3
JPM UK Dynamic A Acc
3.00
209.2000
+0.6000
Jupiter Growth & Inc
–
*102.75
-0.25
M&G Global Themes A Acc
4.00
1373.01
-0.46
JPM UK Dynamic A Inc
3.00
165.0000
+0.5000
Jupiter Income
–
582.90
+0.99
M&G Managed Growth A Inc 4.00
*109.96
-0.37
JPM UK Equity Core E Acc
–
*367.6000
…
Jupiter India Fd
–
123.83
-0.72
M&G Optimal Income A Inc
3.00
*149.33
-0.29
JPM UK Equity Core E Inc
–
*62.9100
-0.0100
Jupiter Int Financials
–
97.70
-0.08
M&G Optimal Income A Acc
3.00
*211.01
-0.42
JPM UK Equity Gwth A Acc
3.00
146.8000
+0.5000
Jupiter Japan Inc Fd Acc
–
119.93
+0.68
M&G Property Portfolio A Inc
JPM UK Equity Gwth A Inc
3.00
131.6000
+0.4000
Jupiter Japan Inc Fd Inc
–
93.91
+0.53
M&G Recovery A Inc
4.00
145.15
JPM UK Higher Inc A Acc
3.00
1110.0000
-1.0000
Jupiter Merlin Bal Prtfo Acc
–
184.30
+0.49
M&G Recovery A Acc
4.00
339.54
-0.14
JPM UK Higher Inc A Inc
3.00
577.6000
-0.4000
Jupiter Merlin Bal Prtfo Inc
–
128.75
+0.34
M&G Strategic Corp Bd A Inc 3.00
75.43
+0.05
UK Tracker A Acc
–
US Growth A Acc
5.00
Sell
†Available as an ISA
È Krugerrand
per oz
Change
Buy on day
JPM Global Macro Opps A Acc 3.00
Multi-Mgr Inc&Gwth A Acc
+20.20
Ç Germany
Mid
+0.04
–
6175.60
Ç France
Change
Buy on day
Init chge
Multi-Mgr Divrsfd A Acc
All Ordinaries
Ç Australia
Mid
85.6900
Name
Discretionary Unit Fund
-0.1
108.6
J.P. Morgan Asset Management
60 Victoria Embankment, London, EC4Y 0JP
Clients:0800 204020.Brokerline 0800 727770
Name
Init chge
Sell
£ > € Rate 1.1389 Change +0.58¢ £ > $ Rate 1.3569 Change +0.51¢
Pan Euro HY Bond Inc
5.25
*32.22
…
Pan Euro HY Bond Acc
5.25
*104.9
…
Init chge
Sell
Name
Init chge
–
Sell
117.38
117.38
…
-0.06
JPM UK Sm Cos A Acc
3.00
499.5000
+0.6000
Jupiter Merlin Conserv Prtfo Acc–
58.31
+0.09
M&G Strategic Corp Bd A Acc 3.00
116.65
+0.07
JPM America Eq A Acc
3.00
89.0400
-0.1900
JPM UK Sm Cos A Inc
3.00
95.3600
+0.1200
Jupiter Merlin Conserv Prtfo Inc–
50.43
+0.07
M&G UK Inc Distribution A Inc 4.00
792.4
-6.74
JPM America Eq A Inc
3.00
89.0300
-0.2000
JPM UK Strat Eq Inc A Acc
3.00
*193.6000
-0.2000
Jupiter Merlin Grth Prtfo Acc –
407.59
+0.86
M&G UK Inc Distribution A Acc 4.00
7209.36
-61.4
Moneybldr Div
3.50
256.8
…
JPM Asia Growth A Acc
3.00
209.2000
-1.2000
JPM UK Strat Eq Inc A Inc
3.00
*113.9000
-0.1000
Jupiter Merlin Grth Prtfo Inc –
396.12
+0.84
M&G UK Infl Lkd Corp A Inc
3.00
*114.94
-0.07
Moneybldr Gwth
–
80.14
+0.21
JPM Asia Growth A Inc
3.00
115.3000
-0.7000
JPM Uncons Bond A Acc
3.00
*71.9300
-0.0600
Jupiter Merlin Inc Prtfo Acc
–
*298.17
+0.33
M&G UK Infl Lkd Corp A Acc 3.00
*118.57
-0.07
Jupiter Merlin Inc Prtfo Inc
–
*133.98
+0.15
N.A.A.C.I.F. Inc
–
*86.36
-0.1
Jupiter Merlin WW Prtfo Acc –
291.65
+0.54
N.A.A.C.I.F. Acc
–
*8586.63
-9.83
†CAR - Net Income reinvested.
Growth Funds
Name
1 Euro =
1 Dollar =
American
3.50
3732
-10
Jupiter Merlin WW Prtfo Inc –
291.64
+0.55
Aus $
1.7061
1.8042
1.5843
1.3297
Amer Sp Sits
3.50
1497
-6
Jupiter Monthly Inc Acc
–
*117.44
+0.42
Canada
Can $
1.6598
1.7451
1.5324
1.2861
European
3.50
2274
+1
Jupiter Monthly Inc Inc
–
*31.14
+0.12
Denmark
Krone
8.0277
8.4848
7.4502
6.2530
European Opps
3.50
519.8
-1.5
Jupiter N.American Inc Acc
–
146.93
-0.64
€
1.0810
1.1389
…
0.8393
Global Special Sits
3.50
3865
-9
Jupiter N.American Inc Inc
–
122.43
-0.52
Japan
3.50
370.4
+0.8
Jupiter Responsible Inc Fd Acc –
*116.59
-0.11
Balanced Inc
5.00
*328.90
Japan Smaller Cos
3.50
323.6
+0.8
Jupiter Responsible Inc Fd Inc –
*73.97
-0.07
Balanced Acc
5.00
*422.00
…
Investors: 0800 614330 Brokers: 08085 660000
www.bnymellonim.co.uk,
clientservices@bnymellon.com
Global Focus
3.50
1942
-11
Jupiter Strategic Bond Acc
–
*97.43
-0.02
Equity Income
5.00
*349.80
…
Index UK A Acc
–
109.2500
-0.0500
Jupiter Strategic Bond Inc
–
*63.99
-0.02
Extra Income
5.00
*108.60
…
BNY Mellon Investment Funds (ICVC)
Special Sits
3.50
4072
+12
Jupiter Strategic Res Acc
–
53.58
+0.02
Growth
5.00
*392.70
…
South East Asia
3.50
1370
-8
Jupiter Strategic Res Inc
–
52.15
+0.01
High Yield
5.00
*126.60
…
3.50
297.3
+0.4
Jupiter UK Growth
–
344.63
+2.13
Intntl Growth
5.00
*499.60
…
Jupiter UK Smaller Cos
–
372.56
+0.77
Jupiter UK Special Sits Inc
+0.66
Tourist £1= Sterling £1=
Australia
Euro
Hong Kong
HK $
10.1000
10.6513
9.3526
7.8498
India
Rupee
79.7900
91.1447
80.0312
67.1713
Israel
Shekels
4.4254
4.9037
4.3058
3.6139
Yen
140.8000
148.2481
130.1719
109.2550
Dinar
…
0.4090
0.3591
0.3014
Japan
Kuwait
New Zealand
BNY Mellon Fund Managers
NZ $
1.7990
1.9330
1.6973
1.4246
Norway
Krone
10.4200
10.9319
9.5989
8.0565
Pakistan
Rupee
147.5100
156.8169
137.6959
115.5700
Riyal
4.7519
5.0887
4.4683
3.7502
Sterling Income Shares
Boston Co US Opp Fund
0%
121.23
-0.18
UK Select Acc
Insight Corporate Bd
0%
93.1
+0.31
Target Funds
Saudi Arabia
Singapore
South Africa
$
1.6829
1.8135
1.5924
1.3365
Rand
16.1300
17.0707
14.9892
12.5807
Sweden
Krona
11.4300
11.9814
10.5205
8.8300
Switzerland
Franc
1.2904
1.3614
1.1953
1.0032
Thailand
Baht
38.3900
43.2172
37.9477
31.8500
UAE
Dirham
4.6708
4.9841
4.3764
3.6732
UK
£
…
…
0.8780
0.7370
USA
$
1.2942
1.3569
1.1914
…
Tourist rates for indication use only. www.travelex.co.uk
Rates
Inflation
Change on month
Year
+3.3pc
Insight Eq Inc Fund
0%
178.57
…
Insight Eq Inc Booster
0%
129.68
+0.08
Target 2020
Insight Glob Abs Ret Inc
0%
110.69
-0.12
†CAR - Net income reinvested
Insight Glob Multi-Strat Fd
0%
*123.48
-0.11
Insight Inflat-Link Corp Bd
0%
*107.57
+0.19
Long-Term Global Equity
0%
253.29
-0.15
3.50
66.01
…
0%
195.61
-1.15
Fundsmith LLP
Glob Income
5.00
157.99
166.47
-1.12
271.18
+0.57
PO Box 10846, Chelmsford, Essex, CM99 2BW.
0330 123 1815
www.fundsmith.co.uk enquiries@fundsmith.co.uk
Growth Fd
5.00
425.78
450.32
+2.02
+0.10
+0.20
+3.4pc
Newton Global Dyn Bd
0%
101.71
…
Mar 105.00
+0.10
+2.5pc
Newton Glb High Yld Bd
0%
59.73
-0.04
Halifax house price index
Mar 737.50
1.5pc
+2.7pc
Newton Glb Inc Stg Inc
0%
191.94
+0.12
Fundsmith Equity T Acc
–
357.39
+1.72
JPM Div Gth A Net ACC
Newton Glb Opps
0%
282.84
+0.53
Fundsmith Equity T Inc
–
331.81
+1.60
JPM Emg Euro Eq A Acc
Overnight
0.48pc
US Fed Funds
7 day
0.48pc
US Long Bonds Yld
3.13pc
1 month
0.51pc
European repo rate
1.25pc
3 months
0.67pc
European base rate
0.00pc
6 months
0.78pc
1.50-1.75pc
Major price changes FTSE 100 Week on week Friday Close
Risers 63
Volume
Close
Change
Fallers 33
Volume
Close
Change
Ç Sainsbury
19.96m
301¼
11.68pc
È Kingfisher
17.21m
281¼
-6.89pc
Ç WPP
8.47m
1281
11.54pc
È Smith&Neph
11.50m
1298
-6.75pc
Ç Pearson
12.21m
893⅝
8.68pc
È BT Group
24.65m
234⅞
-5.28pc
Ç Intl Cons Air
16.21m
42.5900
-0.3900
JPM US A Inc
3.00
*143.4000
…
High Income Inc
–
*112.2
112.2
+0.1
-1.7000
JPM US Eq Inc £ Hdg A Inc
3.00
*114.4000
-0.3000
High Income Acc
–
*258
258
+0.2
Newton Mult-Asset Div Ret
0%
155.07
-0.20
JPM Emg Markets A Inc
3.00
94.8900
-0.7200
JPM US Eq Inc A Acc
3.00
*169.8000
-0.1000
UK Select Port Inc
–
353.8
353.8
-0.1
Newton Mult-Asset Gwth
0%
838.55
+1.13
JPM Emg Mkts Inc A Acc
3.00
*73.2700
-0.5400
JPM US Eq Inc A Inc
3.00
*136.6000
-0.1000
UK Selection Port
–
641.3
641.3
-0.1
Newton Oriental
0%
666.82
-4.43
JPM Emg Mkts Inc A Inc
3.00
*57.9500
-0.4300
JPM US Select A Acc
3.00
160.0000
-0.3000
UK 100 Co’s Fund Inc
–
222.8
222.8
…
Newton Real Return A
0%
113.23
+0.05
JPM Eur Dyn (ex-UK) £ Hg A Acc3.00
219.1000
-0.4000
JPM US Select A Inc
3.00
157.9000
-0.3000
UK 100 Co’s Fund Acc
–
384.5
384.5
+0.1
Newton UK Equity Fund
0%
878.93
+2.99
JPM Euro Dyn (ex-UK) A Acc 3.00
225.0000
-0.2000
JPM US Sm Cos A Acc
3.00
648.9000
-0.3000
W’wide Man Inc
–
506.5
-0.9
Newton UK Inc
0%
67.68
+0.12
JPM Euro Dyn (ex-UK) A Inc
3.00
101.0000
-0.1000
JPM US Sm Cos A Inc
3.00
169.9000
-0.1000
W’wide Man Acc
–
812.6
-1.5
Newton UK Opps
0%
332.81
+1.10
-6.00
JPM Europe A Acc
3.00
1478.0000
-1.0000
…
Carvetian Capital
Management Limited
2.14m
1935½
-4.66pc
0.29m
6850
-3.72pc
6.28m
3888
-3.54pc
Ç Antofagasta
6.18m
996
4.40pc
È RSA Ins
5.06m
637¼
-3.10pc
Ç DCC
0.28m
7305
4.36pc
È Glencore
43.03m
360
-2.44pc
Ç BHP Billiton
9.03m
1601⅜
4.35pc
È Direct Line Ins
9.03m
365¼
-2.27pc
FENIX Balanced Fd
5.00
*157.7
Ç Diageo
8.80m
2663
4.10pc
È Standard Chart 12.36m
748
-1.80pc
Generation Fd
5.00
787.0
-1.73pc
5144
-1.64pc
Ç CRH
4.85m
2663
3.58pc
È Smurfit Kappa
0.94m
3048
-1.61pc
Ç Rentokil Initial
5.50m
317⅜
3.56pc
È Barclays
73.43m
205⅝
-1.60pc
Kings Meadow, Chester, CH99 9UT
0870 333 1835
222.8000
È PaddyPwrBet
3981
…
3.00
È Brit Amer Tob
0.73m
-0.0400
3.00
È Mondi
3.00m
*56.5700
*1036.0000
JPM Emg Markets A Acc
5.49pc
È Next
3.00
3.00
JPM Emg Euro Eq A Inc
6.17pc
È Unilever
JPM US A Acc
+0.31
7.58pc
3.85pc
JPM Uncons Bond A Inc
-1.8000
Marks & Spencer Unit Trust
Management Ltd
+0.59
678
3.76pc
-0.5000
192.8000
Change
Buy on day
Sell
234.35
481⅝
558⅛
*259.9000
3.00
Mid
Init chge
194.98
1729½
794¾
3.00
Name
0%
1.26m
4.32m
Change
Buy on day
Sell
0%
6.63m
60.61m
Mid
Init chge
Newton Multi-Asset Bal
Ç TUI AG
Ç BP
Name
Newton Intnl Bond
Ç Evraz
Ç Just Eat
-0.06
0%
Mar 278.30
2.50pc
67.00
Newton Asian Income
Mar 278.80
Nationwide Base Mortgage Rate
-0.06
Jupiter US Sm&Md Cap Ret Acc –
Newton Cont European
CPI (2015=100 target 2pc)
0.50pc
72.63
PO BOX 23850, Edinburgh EH7 5FY
Dealing and Admin 0330 123 3822
RPIX (Target 2.5pc)
Bank Rate
*196.20
Liontrust Investment Funds
RPI (1987=100)
Money
–
Jupiter US Sm&Md Inst I Acc –
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Enquiries: 0845 850 0255
Janus Henderson Investors
PO Box 9023 Chelmsford, CM99 2WB
Enquiries: 0800 832 832
Website: www.janushenderson.com
Asia Pac Cap Gwth A Acc
5.00
1110.0000
JPM Europe A Inc
3.00
82.1100
-0.0700
*268.3000
+0.20
JPM Euro Smaller Co A Acc
3.00
786.2000
-1.6000
3.00
Asian Dividend Income Inc
5.00 *106.8600 112.2700
Cautious Managed A Acc
5.00
Cautious Managed A Inc
5.00
*153.0000
+0.10
JPM Euro Smaller Co A Inc
101.8000
-0.2000
China Opps A Acc
5.00
1468.0000
-5.00
JPM Global Bd Opps A Grs Acc –
*54.0400
-0.0300
Emerg Mkts Opps A Acc
5.00
207.7000
-0.80
JPM Global Bd Opps A Grs Inc –
*48.8000
-0.0400
…
European Growth A Acc†
5.25
237.3000
+0.10
JPM Global Bond A Gross Acc 3.00
262.3000
+0.1000
+4.80
European Sel Opps A Acc
5.00
1660.0000
…
JPM Global Bond A Gross Inc 3.00
203.5000
+0.1000
Consistent Unit Trust
Management Co Ltd
Fixed Int Mthly Inc A Inc
4.25 *21.6700 22.6100
…
JPM Global Eq Inc £ Hdg A Acc 3.00
*82.4500
-0.2400
Charibond Inc
–
*123.01
Global Care Growth A Inc
4.50
*291.9000
+1.30
JPM Global Eq Inc £ Hdg A Inc 3.00
*54.8200
-0.1600
Jupiter Abslt Rtn
–
54.70
+0.08
Charibond Acc
–
*3973.23
+6.1
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Client Services 0345 850 8818
Global Equity Inc A Inc†
5.25
60.9400
+0.02
JPM Global Eq Inc Fd A Acc
3.00
*97.4700
-0.1600
Jupiter Asian Fd
–
915.17
-3.22
Charifund Inc
–
*1605.34
-2.16
Global Growth Acc
4.25 3042.0200 3173.0601
…
JPM Global Eq Inc Fd A Inc
3.00
*78.5100
-0.1300
Jupiter Asian Inc Fd Acc
–
130.49
-0.86
Charifund Acc
–
*24861.93
-33.46
Global Strategic Cap Acc†
5.00
240.7000
-0.10
JPM Global HiYld Bd A Grs Acc 3.00
*109.9000
-0.2000
Jupiter Asian Inc Fd Inc
–
120.62
-0.79
M&G Corp Bond A Inc
3.00
*40.34
+0.06
Jupiter Unit Trust Managers Ltd
M & G Securities Ltd
The Zig Zag Building, 70 Victoria Street, London,
SW1E 6SQ
020 3817 1000
PO Box 9039, Chelmsford, CM99 2XG
Enq: 0800 390 390. UT Deal: 0800 328 3196
Ç Bunzl
4.62m
2167
3.29pc
È NMC Health
0.48m
3544
-1.56pc
Ç Anglo Amer
4.54m
1751⅜
3.07pc
È Old Mutual
38.39m
251¼
-1.37pc
Ç Mediclinic Intl
1.26m
694
2.97pc
È Coca-Cola HBC
0.63m
2450
-1.17pc
Ç Burberry
3.15m
1875
2.91pc
È Micro Focus Intl 12.27m
1260
-1.10pc
Unit Tst Inc
0%
52.67
53.45
+0.15
Global Technology A Acc
5.00
1709.0000
+4.00
JPM Global HiYld Bd A Grs Inc 3.00
*36.2300
-0.0600
Jupiter China Acc
–
139.62
-0.27
Ç Informa
6.85m
756¾
2.71pc
È Segro
2.09m
640
-1.08pc
Ç Royal Mail
0%
135.8
137.9
+0.4
Multi-Mgr Abs Ret A Acc
5.00
*141.5000
-0.10
JPM Global HiYldBdAGrsMthInc3.00
*36.2400
-0.0500
Jupiter China Inc
–
134.15
-0.26
598¾
2.71pc
È Shire
Unit Tst Acc
7.65m
3.59m
3856
-0.98pc
Ç Utd. Utilities
2.87m
769
2.70pc
È Ferguson
1.31m
5570
-0.82pc
Practical Invest Inc
5.00
238.4
255.3
0%1.1
Multi-Mgr Active A Acc†
5.00
*225.4000
+0.30
JPM Global Macro Bal A Acc
3.00
*72.1400
…
Jupiter Corp Bond Inc
–
56.65
+0.10
Ç Scot Mort Inv Tst 4.64m
487
2.61pc
È HSBC
57.89m
714⅜
-0.72pc
Practical Invest Acc
5.00
1261
1351
0%7
Multi-Mgr Distbn A Inc
5.25
136.0000
+0.10
JPM Global Macro Bal A Inc
3.00
*63.1900
…
Jupiter Dstrbtn Acc
–
*102.30
+0.07
+0.19
Initial charge:
This charge in percentage terms is included in the purchase
price of the units. It is levied by the unit trust manager to cover
administrative costs and commissions.
* Denotes Ex-dividend
Natwest Investment Funds
(RBS Collective Investment Funds Ltd)
PO Box 249, York YO90 1ZY
0117 940 3848
…
8
Tuesday 8 May 2018 The Daily Telegraph
***
Business
Port gets a makeover to end sales decline
It’s a drink associated
with Christmas and a
fusty reputation, but
as Jack Torrance
finds, the producers
of the fortified wine
are fighting back
GETTY IMAGES
I
t’s hard to deny that port has an
image problem. Many of us are
partial to a glass of the sweet
fortified wine with some cheese
after a Christmas feast.
But it also evokes less homely
connotations: stuffy private members’
clubs, boozy Eighties City traders and,
for those who overindulge too often,
gout.
That might explain why sales of the
drink by volume have been in steady
decline for most of this century, with
worldwide sales falling almost 10pc to
83.5m litres between 2011 and 2016,
according to data from market
research provider Euromonitor.
But the Portuguese companies that
make port, which is produced by
mixing fermenting grape juice with a
spirit called aguardente, aren’t going
down without a fight.
Inspired by the recent success of gin
and scotch whisky before it, they are
creating new varieties and luring
tourists to their hilly vineyards and
atmospheric cellars in the home of
cultivating a fresh image that will
appeal to a younger fan base.
Like many of those who drink it,
port is pretty old. The Douro Valley,
where all of the grapes used in its
production are made, became one of
the first officially defined wine regions
in 1756. Port houses have for centuries
been transporting it down the river in
flat-bottomed “rabelo” boats to their
cellars in Vila Nova de Gaia in Porto,
where it is aged and bottled.
Having been allies of the Portuguese
for hundreds of years, Brits have had a
key role in the industry’s history – as
evidenced by the disused rabelos that
line Gaia’s riverfront, their sails
emblazoned with brand names such as
Graham’s, Taylor’s and Croft.
The industry has consolidated since
its early days with many of the old
families selling up. But one dynasty
that remains is the Symington family,
who own more than 1,000 hectares of
vineyard estates, known as quintas, as
well as the Dow’s, Graham’s, Warre’s
and Cockburn’s brands. It also
produces own brand ports for four UK
supermarket chains including Tesco
and Waitrose.
“My great-grandfather came here
from Glasgow in 1882 aged just 18,”
says Paul Symington, the company’s
current boss. “He came here as a
young lad like a lot of Scots looking for
opportunities and we’ve been here
ever since”.
There was a time when much of the
industry was owned by international
drinks giants including Seagram and
Allied Domecq, but now that’s only the
case for Porto Cruz, the industry’s
biggest company, which belongs to
France’s La Martiniquaise.
Symington’s is second-largest, while
other big names include family-owned
Taylor, Fladgate & Yeatman,
Portuguese group Sogrape and Quinta
do Noval, part of the insurance giant
Axa’s portfolio of wine companies.
All face a battle to win over younger
consumers, these days more likely to
be supping gin cocktails or craft beer.
Though Symington’s had a record year
in 2017, reaching revenues of €92m
(£81m), Paul Symington admits port
suffers from its “fusty” reputation and
festive associations.
“In the UK especially we are
extremely oriented towards
Christmas, some 40pc of our sales are
in the last two months of the year,” he
says. “We need to rejuvenate our
image, we have a reasonably good
market, but we can’t just sit back and
hope for the best.”
All of the growth at the moment is
coming from the market’s premium
end as drinkers cut back on cheaper
‘There is
evidence that
if people
have visited
your winery
and you’ve
treated them
well then
they’ll be an
ambassador
for life’
“ruby” varieties. While vintage port,
which is made from only the best
years’ grape harvests and aged in the
bottle for several years, is seen as the
industry’s pinnacle, it can be fussy to
drink because it needs to be decanted
to separate out the sediment that
forms as it matures.
Max Graham, a descendant of the
family that started Graham’s runs
Portuguese restaurant Bar Douro in
London. He believes younger drinkers
are more likely to plump for more
“accessible” varieties that can be
served chilled, straight from the
bottle.
That includes tawnies, which take
on a mellow, nutty flavour and a
brown hue after being aged for
decades in oak casks, and the less
well-known white port, which is
typically served with tonic water as a
less alcoholic alternative to a classic
G&T. Some houses including Porto
Cruz and Croft, owned by Taylor’s,
have tried to capitalise on the
popularity of rosé wines, by launching
“pink ports” in recent years too.
The companies are also counting on
a spike in tourism to help them attract
new customers.
Passenger numbers flying to
Portugal soared 12pc last year to a
record high of 12.7m. “So many of our
customers are either on the way to
Portugal or on their way back,” says
Graham.
The traditional
rabelo boats that
ferry port down the
Douro River.
Although the
industry is steeped
in tradition,
producers are
seeking new
ways to appeal to
a younger market
to offset a near
10pc decline in
worldwide sales
Port wine barrels in a warehouse. In Britain, 40pc of the fortified wine’s sales are made
in the last two months of the year, as the drink is firmly associated with Christmas
Symington’s, Graham’s and Dow’s
cellars in Porto and its Quinta do
Bomfim estate, only recently opened
to the public, welcomed a combined
114,000 visitors last year, pulling in
revenues of €5.4m.
“There is strong evidence from wine
producers all over the world that if
people have visited your winery and
you’ve treated them well then they
will be your ambassadors for life,”
Symington says.
There are some signs of a
resurgence in the UK. While the
industry’s sales volumes in the year to
March dipped 0.8pc, revenues were
up by the same amount to around
£78m, according to figures from
Nielsen, as shoppers splashed out on
more expensive bottles.
Paul Symington expects the trend to
continue in the future. While that will
keep port makers’ finances looking
healthy, it does beg the question of
what they will do with all their vines as
they use fewer grapes for port.
Part of the answer could be
unfortified wines. While the Douro is
currently a small player in that part of
the industry, it has taken off in recent
years as plonk aficionados have gone
in search of something a little
different.
Symington hopes in time the region
will come to rival the likes of Bordeaux
and Burgundy.
“We’re not there yet but there’s a
real possibility that the best wines in
the Douro will eventually earn their
right among some of the great wines of
the world,” he says.
With its old-school reputation, port
might not seem like a likely candidate
for a comeback. But as experiencehungry youths go in search of
interesting tipples the possibility can’t
be ruled out.
Regardless of what tumult the
industry faces in the future, it seems
unlikely the Symingtons will be selling
up any time soon.
“A financial adviser would probably
say: ‘Look, I’ve added up the value of
all your cellars in Gaia, all your wine
stocks, your brand values and your
Douro vineyards.
“If you sold all of that and invested it
in a big fund somewhere you would
probably all be a lot better off ’,” he
says.
“But we look at that and think: Well,
yeah, but what the hell would we do?
How many bottles of champagne can
you actually drink?”
BUSINESS BULLETIN
Oil climbs to 2014 highs
amid US-Iran tensions
EU gives greenlight to
steelworks merger
US dollar reaches a
2018 high
Oil markets climbed to their highest
price since November 2014 at $75.89
a barrel amid mounting tensions
between Iran and the US. Brent crude
rallied by 1.2pc after Iranian President
Hassan Rouhani warned US President
Donald Trump that his threat to
overturn the nuclear deal struck in
2015 would be an “historic mistake”.
Arcelor Mittal has the approval of
Brussels to move ahead with its
€1.8bn deal to buy Ilva, Italy’s largest
steelworks. The European
Commission gave the greenlight to
form what will be by far Europe’s
largest steel maker, on the condition
that Arcelor Mittal sells off a string of
its steelworks across Europe.
The US dollar broke above the fresh
2018 highs set last week as the S&P
500 rallied 0.6pc higher in line with
gains for major oil companies and
technology stocks, including Apple,
which broke above $185 a share for
the first time ever. As a result, the
dollar climbed 0.3pc against the
euro to $1.1922.
Air France turbulence
as strikes continue
Elliot targets medical
group with $7bn offer
Business Stream pours
cold water on rivals
Air France lost 14pc of it value on the
French stock market after the airline
endured its 14th consecutive day of
industrial unrest. Chief executive
Jean-Marc Janaillac stepped down
after workers rejected a new pay deal
that falls short of their calls for a 5.1pc
increase. Air France said it will still
carry out most scheduled flights.
Activist hedge fund Elliot
Management has made an offer to
acquire the US electronic medical
records company Athenahealth for
about $7bn. Elliot’s offer of $160 a
share is one of its largest offers made
to date and is well above the group’s
$5.1bn market value at Friday’s closing
share price of $126.08.
Scottish water supply giant Business
Stream beat its English rivals to clinch
a contract with Network Rail to serve
stations across the UK. The deal is one
of the largest since the market opened
for competition in England in 2017.
The Scottish market opened almost a
decade earlier giving Business Stream
a head start on English utilities.
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The Daily Telegraph, newspaper
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