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The Daily Telegraph Business - May 9, 2018

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Business
**
Wednesday 9 May 2018
telegraph.co.uk
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Market report page 7. Questor page 6
Branson
buy-out?
CYBG
comes
calling at
Virgin
Money with
£1.6bn offer
Sky: the
sequel
Takeover
saga has
twists
to come
Christopher
Williams
Page 5
Page 2
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Page 7
Page 7
Fifth time lucky as Takeda nets Shire
By Ayesha Javed
TAKEDA has finally won its battle to acquire Dublin-based rival Shire on the
fifth attempt, as the board unanimously
backed its £46bn takeover offer, but
the Japanese drug maker’s boss blamed
the muted share price response on the
“complexity” of the deal.
After FTSE 100 firm Shire rejected
four previous offers, Takeda last month
increased its bid to £49.01 per Shire
share, valuing the company’s equity at
£46bn and representing a 64.4pc premium to Shire’s closing price of £29.81
on March 23 – the last business day be-
fore rumours of a Takeda approach
emerged. Shire’s shares closed below
the offer price yesterday, ending up
4.6pc at £40.35 in London, while Takeda’s share price has fallen nearly 30pc
since January.
Christophe Weber, chief executive
of Takeda, said: “This is a relatively unusual transaction in the way it’s financed with some share issuance,
paying in dollars, with the listing in
London and listing in Tokyo and New
York, so I think there is a bit of complexity that could be one of the reasons
[for Shire’s share price]. But what is important is that both boards have recom-
mended this transaction.” Frenchman
Mr Weber blamed British takeover
rules for Takeda not being able to tell
its investors much about the deal,
which he said may have also put pressure on its share price.
The deal requires approval from
75pc of Shire’s shareholders and 70pc
of Takeda’s shareholders and Mr Weber will now go on the charm offensive
with an investor roadshow, travelling
to London next week.
Shire’s shareholders will own half
the combined group once the acquisition completes in the first half of 2019.
New shares in the business will be
Christophe Weber,
chief executive of
Takeda, blamed the
muted reaction to
the Shire deal on the
bid’s complexity
listed on the Tokyo Stock Exchange
and local Japanese bourses, while its
American depositary shares will be
listed on the New York Stock Exchange.
The Japanese company raised the
amount of cash in its offer to $30.33 to
secure a recommendation. Shire inves-
tors will also receive 0.839 new Takeda
shares for each share they own.
The companies have also agreed that
up to three Shire directors will join the
board. The combined business could
become the ninth biggest global pharmaceutical company by sales, according to GlobalData.
City analysts had previously cast
doubt on the deal, pointing out Takeda
would need to borrow heavily to fund
the cash element of the purchase.
Mr Weber said that the company was
taking on $30.9bn (£22.8bn) of debt,
representing a leverage multiple of between four and five times earnings. He
said that it aimed to reduce that multiple to two times within three to five
years by growing earnings and through
$1.4bn of cost synergies by the end of
the third year.
Mr Weber added that the combined
firm’s focus would be on gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies.
Maura Musciacco of GlobalData said:
“If Takeda ensures a rapid integration,
without affecting Shire’s R&D productivity, Takeda will surely gain the rewards of such a costly deal.”
She added that “a new wave of M&A
is on the horizon” in the sector.
America’s Cup row
over ‘Team GB’ name
By Alan Tovey
BILLIONAIRE Jim Ratcliffe’s
£110m assault on the America’s Cup has hit a squall with
a battle between him and the
British Olympic Association.
The industrialist’s support
aims to see Britain bring
home the cup, with sailor Sir
Ben Ainslie enlisted to skipper the campaign, which was
to be called Ineos Team GB.
However, a row has blown
up between the industrialist
– who made his £12bn fortune with the Ineos chemicals group – and the BOA,
owner of the Team GB name.
Mr Ratcliffe thought he
had BOA’s backing to use the
Team GB name without
charge, something flatly denied by the sporting body.
The BOA says it told the billionaire it would never give
Royal Bank of Scotland executives Jane Howard, Ross McEwan and Les Matheson answer questions on branch closures from MPs on Westminster’s Scottish Affairs Committee yesterday
RBS managers show customers how to use post offices for banking
By Tim Wallace
ROYAL Bank of Scotland’s
branch managers are “escorting” customers to post
offices to show they do not
need the bank’s own sites
any more.
The number of transactions made in branches has
fallen by 30pc since 2014, so
the bank is closing more
sites. Another 162 closures
were announced last week,
on top of the 259 announced
in December.
Now the lender is taking
unprecedented steps to encourage customers to get
used to life without a branch
on their high street.
“Once we have made the
decision to close a branch,
then we ask [our staff ] to
have a direct conversation
[with customers] on other
ways of banking,” chief executive Ross McEwan told
the Scottish Affairs Committee in Parliament yesterday.
“It could be through a mobile van, it could be through
the Post Office. I’ve been in
to see them and the postmaster was delighted we were
escorting customers across.
They see it as essential for
them to stay open as well.”
RBS is one of 28 banks
whose cash and cheque payments and withdrawals can
be processed through the
Post Office, though MPs
warned that this meant RBS
felt able to close a branch
even if it was the last site in
town.
It also puts its customers
at risk of any Post Office
branch closure, they added.
The banks pay the Post Office for the transactions, but
more complicated services –
such as arranging a loan –
cannot be done there.
Instead RBS sends “community bankers” to meet customers, and sends banking
vans out to high streets.
These vans could be sent on
new routes to plug any gaps
left by a closing post office.
The bosses told MPs they
would not close any more
branches for at least 19
months.
“Branches remain a core
part of our service,” Mr McEwan said.
“We will not look at the
size of network again in
Scotland until at least 2020.”
Bank holiday sunshine sets a new
Standard Life Aberdeen hits back in
record for solar-powered electricity clash over £109bn Lloyds contract
By Jillian Ambrose
THE hottest early May bank
holiday weekend ever resulted in solar panels powering their largest-ever share
of the UK’s energy mix.
As Britons basked in Sunday’s sunshine, photovoltaic
panels across the country
Inside
Jeremy
Warner
Next stop Europe. Donald
Trump’s trade policy has
been focused this past week
on winning concessions
from China, but soon, his
attention will switch back to
his other bête noire, the EU.
In Trump’s eyes, Europe is
in some respects an even
worse offender than China.
Page 2
produced more power than
any other energy source.
Solar installations powered as much as 28.5pc of the
nation’s electricity, blazing
past gas-fired power plants,
which generated 24.8pc during the same period. The solar power peak occurred
between 1.30pm and 2pm,
according to the National
Grid, topping the 26.1pc record set in July 2017.
Over the whole day, solar
power accounted for 11.1pc of
the electricity generated,
with 27.5pc from nuclear and
34.6pc from gas-fired power,
the highest proportion of solar power over 24 hours.
By Ayesha Javed
THE battlelines have been
drawn between one of the
UK’s biggest asset managers
and one of its biggest banks
after Standard Life Aberdeen
hit back at Lloyds Bank for
attempting to pull a contract
worth £109bn. Standard Life
Aberdeen, the company created in an £11bn deal last
summer, said that it did “not
agree” with Lloyds’ assertion
that the two firms were in
“material competition in the
UK” following the merger.
In a surprise move, the
firm said yesterday that
Lloyds Banking Group and
its subsidiary Scottish Widows did not have the right to
pull their business.
The contract brings in
about £129m of annual revenue for Standard Life Aberdeen, representing around
4.4pc of its pro forma revenue last year, it said. Lloyds
Continued on Page 5
up the trademark for free,
with money it gets from it
used to back Britain’s Olympic campaigns.
The row escalated with Mr
Ratcliffe writing to the BOA,
saying he “naively” thought
use of Team GB would be
seen in a “patriotic light”, and
claiming he was told he faced
a multi-million bill to use the
trademark. As a result, the
businessman invited BOA to
“take a long walk off a short
plank” in the letter, saying he
would rename the yachting
campaign “Team UK, which I
much prefer”.
BOA said it is self-funded
and “must protect the Team
GB trademark”, adding it “encouraged partnership discussions, which were rejected. At
no stage were there any demands for specific financial
figures”.
2
Wednesday 9 May 2018 The Daily Telegraph
***
Business comment
US antitrust trial over the takeover
of Time Warner by telecoms giant
AT&T may have dramatic bearing
on fight for the British broadcaster
T
he Sky takeover saga has had more
shifting deadlines than a satellite
repeat of Homes Under the Hammer
but here’s yet another one that may
trump all the rest. June 12.
That is the day by which US
District Judge Richard Leon has promised to
deliver a decision in the antitrust trial over the
takeover of Time Warner, owner of CNN and
HBO, by the telecoms giant AT&T.
The deal is opposed by Donald Trump and the
Department of Justice but AT&T boss Randall
Stephenson has battled on.
He and many others are convinced that in a
world of trillion-dollar monsters from Silicon
Valley, a mere $85bn (£63bn) merger between
two companies that do not directly compete
should be allowed.
If Stephenson prevails next month, the
potential ramifications for Sky of an approval or
rejection of the deal are massive and further
complicate a situation that is already more
confusing than Sky’s recent Twin Peaks reboot.
As things stand, 21st Century Fox and Comcast
have made competing bids for Sky. Comcast
gatecrashed in February with a more generous
bid that probably faces lower regulatory hurdles.
The EU is due to rule on whether to approve the
potential deal of conduct an in-depth
investigation by June 15.
Murdoch-controlled Fox could increase its bid
if it gets approval to buy Sky from the Culture
Secretary Matt Hancock, who has until June 13 to
make a decision and could act sooner. If not the
middle week of June looks quite crowded.
For the holders of the 61pc of Sky shares not
owned by Fox, the ideal situation would be
approval and a straight auction. The field would
not be totally level. Fox after all starts with 39pc
of Sky and can switch its offer from a scheme of
arrangement to a vanilla takeover that only
requires 50pc plus one share to succeed.
In that scenario other shareholders would look
to Martin Gilbert and the independent directors
to maintain the lock up that prevents Fox buying
more shares on the market, to ensure a shoot-out
takes place. Normally Fox
would be comprehensively
outgunned by Comcast, had
it not agreed to sell most of
its assets on to Disney,
which is trying to bulk up in
anticipation of coming
clashes with Silicon Valley.
Disney lacks the direct
relationships with
consumers
that are
’
expected to be essential to
stand up to Netflix and
Amazon and wants Sky to plug the gap. It could
give Fox plenty of latitude to bid up against
Comcast. This is where Judge Leon could take a
starring role. When the Murdoch clan agreed to
sell most of their entertainment empire to Disney
last year, they also fielded interest from Comcast.
The political opposition to the “vertical” merger
of AT&T and Time Warner tilted the pitch in
favour of Disney, however.
In the eyes of regulators, a combination of
Comcast’s vast cable distribution network and
Fox’s film and television assets could look quite
similar to AT&T’s plans. Disney is meanwhile
merely a rival media owner pursuing a
“horizontal” deal with Fox.
Such a merger would not be unopposed,
particularly in Europe where the likes of Virgin
Media owner Liberty Global would fear
consolidation of two film suppliers and its
biggest rival, Sky.
Nevertheless in Fox’s eyes Disney looked the
less risky option compared with Comcast.
Yet if AT&T defeats the government opposition
to its takeover of Time Warner, Comcast is likely
to revive its interest in the big deal with the
Murdoch family. It wants Sky and has seized its
opportunity in the UK, but it also wants the
Hollywood film studio, the cable channels and
the 30pc stake in the US Netflix rival Hulu. It
certainly doesn’t want Disney to have them.
It emerged over the long weekend that
Comcast has been gathering the necessary
financial firepower, some $60bn in cash, versus
$52bn in Disney shares.
If the court backs AT&T and gives the green
light to a mega-merger of media and telecoms,
Comcast chief executive Brian Roberts looks
likely to mount another raid. And if he succeeds
in usurping Disney at the court of Murdoch, an
auction for Sky looks less likely.
The two current bidders – Fox and Comcast
– would become one.
Bob Iger, Disney’s chief executive, could make
his own bid for Sky, but he would be up against a
bidder with a 39pc stake in the bag and
regulatory approval well under way if not sealed.
That is why news of Comcast’s manoeuvrings
in the credit markets yesterday prompted a
sell-off of Sky shares.
They fell more than 1.6pc as the hedge funds
which have attempted to predict the many twists
and turns of the Sky takeover estimated the risk
that the cold war between Comcast and Disney
may never turn hot, at least in the UK. That said
the shares remain a pound above Comcast’s
£12.50 offer, the best currently on the table.
It is entirely possible that Judge Leon will rule
against AT&T, of course. Comcast would then
have to make do with fighting it out for Sky.
It means the independent Sky shareholders
now find themselves lined up alongside Trump,
who it has been claimed opposes the AT&T
takeover of Time Warner because of his hatred
of CNN. News has always been at the centre of
wrangling over Sky. So-called “fake news” and a
US court could deliver the denouement.
‘For holders
of the 61pc of
Sky shares
not owned by
Fox, the ideal
is a straight
auction
JEREMY WARNER
ER
N
ext stop Europe. Donald
Trump’s trade policy has
been focused this past
week on winning
concessions from China,
but pretty soon, the US
president’s attention will switch back
to his other bête noire, the European
Union.
In Trump’s eyes, Europe is in a
number of respects an even worse
offender than China, whose overall
trade surplus with the rest of the world
doesn’t in any case look nearly as bad
as it used to. Not so that of the
eurozone, and particularly the surplus
nations of Northern Europe.
Germany’s current account surplus
last year was the biggest in the world.
Having abated a little in recent
months, it once again shot up in March
to near record levels, adding fuel to
American allegations of unfair trade.
Brussels has been given until the
end of this month to strike a deal with
the US limiting steel and aluminium
exports, or the US will initiate a 10pc
tariff on aluminium and a 25pc charge
on steel. European leaders seem in no
mind to play ball, and have threatened
their own tariffs on Harley-Davidson
motorcycles, blue jeans and bourbon
in retaliation.
If you do that, counters the White
House, we’ll go for your car exports,
and much else besides. Meanwhile, the
EU threatens to retaliate against the
retaliation. Another mooted target for
additional tariffs is Florida orange
juice. Pretty soon, great swathes of the
economy would be covered by the
mushrooming nature of the tit-for-tat
trade war. Viewed in isolation, the
direct impact of what has been
threatened so far is unlikely to be
significant. However, as the European
Central Bank points out in its latest
Economic Bulletin, the risks of
escalation and a broader reversal of
globalisation have increased
substantially. This may affect
Business
Insight
Melrose
Industries
T
urnaround investor
Melrose is now a
blue-chip business
after winning its £8.1bn
hostile bid for engineer
GKN, winning the
backing of 52.5pc of
investors, writes Alan
Tovey. Having taken
control of car and aircraft
parts manufacturer,
Melrose’s management
must now deliver on
promises of better
margins that won them
the takeover battle.
They are yet to give
details of plans that will
allow them to execute on
their “buy, improve, sell”
tagline, but a trading
update in April hinted at
their confidence. Having
examined GKN’s books,
Melrose chairman
J SCOTT APPLEWHITE
The Sky saga
has yet more
twists in the
takeover plot
Trump may actually do some good
in targeting the EU’s trade surplus
investment decisions around the
world, testing the resilience of the
recent revival in global trade. Today’s
limited damage could quickly turn
into something more harmful.
For now, the UK is trapped in the
same matrix of threatened US tariffs as
the rest of Europe; when Liam Fox, the
international trade secretary,
suggested Britain might try to reach its
own, independent deal with the US on
steel, the EU reacted furiously. As long
as the UK is part of the EU, it must
remain bound by the same rules,
officials insisted; one for all and all for
one. Mr Fox has been forced to back
off, and for now let Brussels do the
talking. We won’t give in to threats, the
EU fumes.
Everyone loses out in a trade war.
But those with high levels of exposure
to international trade suffer most. An
all encompassing trade war would
therefore be more damaging to Europe
than the US. According to data tracked
by David Owen, chief European
economist at the investment bank
Jefferies, exports and imports of goods
and services are 52.6pc of GDP for the
euro area, but only 28pc for the US.
Furthermore, undue reliance on
external demand means that the
surplus bloc is almost bound to suffer
more heavily than the net importer. Of
all countries, Germany therefore looks
by far the most exposed to an all out
trade war. German politicians like to
claim that they don’t pursue a trade
surplus as a matter of deliberate policy;
it’s just that German companies tend to
be more competitive than many
overseas rivals and therefore naturally
win out in overseas markets. It can also
be argued that countries with ageing
demographics positively need to be
generating a surplus so as to pay for the
expanding ranks of retirees. Saving for
old age is what all countries with any
sense of prudence should be doing; it is
just that Germany does it more
effectively.
Neither of these arguments are
entirely valid. Creation of the euro has
destroyed the natural pressure valve of
the previous, free floating currency
regime, enabling German companies
to enjoy a considerably lower exchange
rate than otherwise. If Germany still
had its own currency, the rate of
exchange would rise until the trade
surplus was reduced to more tolerable
levels.
Whatever the politicians say,
moreover, German economic policy
seems almost deliberately designed to
suppress consumption and increase
national savings. Anyone who thought
this might change under the new
finance minister, the Social Democrat
Olaf Scholz, has been in for a rude
Christopher Miller said the
accounts “confirmed our
expectations about the
size and scale of the
opportunity”.
While there may be
potential, GKN is a bigger
beast than any of the
previous companies
Melrose had acquired,
improved and sold.
Melrose admits GKN’s
turnaround is likely to
‘In Trump’s
eyes, Europe
is in a
number of
respects an
even worse
offender
than China’
Today
233.2p
High Jun 2017
261.2p
Low Dec 2017
198.8p
Simon
Peckham
Chief
executive
take longer than the usual
three to five years, and it
faces constrictions with
undertakings given to
government which helped
the deal go through. There
are also questions about
whether Melrose has the
skills to deal with such a
complex business, but past
form suggests it is equal to
the challenge.
Donald Trump has
been focused on
winning trade
concessions from
China, but soon he
will switch his focus
to the EU
awakening. In his first budget, Mr
Scholz appeared determined to outdo
even his predecessor, the hair-shirted
Wolfgang Schäuble, in his adherence
to balanced budgets, debt repayment
and fiscal discipline. Pressure to step
up to the plate on defence, overseas aid
and infrastructure spending was
rebuffed, perhaps wisely so in some
respects; it has been estimated that
Germany would need to spend an
additional €70bn (£61bn) a year on
defence to reach the 2pc goal set by
Nato – almost double its 2017 military
budget.
Even so, much of the criticism – not
just from the US, but from the
International Monetary Fund and a
number of eurozone partners – seems
valid enough; Germany ought to be
doing far more to stimulate internal
domestic demand. If it did, much of its
current quarrel with President Trump
would disappear.
Germany is a serial offender when it
comes to breaking EU rules and failing
to implement its laws, but it is the huge
size of the current account surplus – a
clear breach of stability rules – that is
the over-riding sin. While others are
punished for running unsustainable
fiscal deficits, Berlin escapes scot-free
for failing to correct an equally
unsustainable trade surplus. The
burden of closing these imbalances
should at least fall symmetrically.
What’s so curious about German
intransigence is that historically, the
creditor nation ultimately nearly
always suffers just as badly as the
debtors. In all such standoffs, there
eventually comes a point where the
debtor finds some way of defaulting,
and the claims accumulated through
years of hard earned exporting have to
be written off. That’s why Germany
was so determined to drive such a hard
bargain during the eurozone debt
crisis; the priority was always to limit
its own losses.
I doubt that Trump thinks much
about the subtleties of the argument,
but intuitively, he is absolutely right to
want to achieve a better balance in
international trade. His strategy for
getting it could easily spiral out of
control, but if he succeeds, it may even
end up making the world a better, less
crisis ridden place.
Share price
ALAMY STOCK PHOTO
Christopher
her
Williams
Melrose chiefs have talked about the scale of opportunity at GKN
270
p
260
250
240
230
220
210
200
190
2017
2018
Strengths
Threats
 New management
known for driving change
 Major force in the car
and aviation parts sectors
 Large amount of IP in
complex products
 Spread across sectors
 Customer concerns
over new management’s
long-time investments
 Loss of big customer
such as Airbus
 Shareholder activism
over management pay
Weaknesses
Opportunities
 Acquired GKN business
is underperforming
 Debt level has risen with
GKN acquisition
 Parts of portfolio such as
Brush are exposed to
cyclical markets
 Making efficiencies
in GKN business
 Sales of units which
have been turned around
 Sales of GKN’s advanced
drive train in growing
electric car market
Why I became a gambling industry whistleblower
ADRIAN
N
PARKINSON
I
t’s nearly 20 years since I was put in
charge of fixed-odds betting
terminals (FOBTs) for one of the
major bookmakers, rolling out some of
the first ones, and it’s six years since I
put the boot into them by turning
whistleblower on Panorama.
Why did I turn whistleblower? To
highlight the absurdity of £100 spins,
in what was then a relatively lax
regulatory environment around
FOBTs. I wanted to expose the failure
of the industry to recognise the impact
of £100 stakes and the roulette game
itself on the daily life of betting shops
– customers and staff. This was a new
product we had rolled out in a hurry
– one that gave customers more choice
and the bookmakers more
opportunities, but with little thought
on how it would impact and change
the betting shop environment. The
average age of a betting shop customer
in the Nineties was in the 50s. FOBTs
appealed to a younger, more tech
savvy generation who didn’t
understand horse racing, but got
digital, touch screen gaming.
Since I turned whistleblower in 2012
that lax regulatory environment has
ended. The Government has rightly
imposed a string of measures to
provide better player protection, the
most important being the limited
introduction of card-based play. The
ability to track and monitor player
activity on gaming machines is not
something to be resisted. It can act like
a player firewall that when linked to
developing algorithmic technology
will provide a level of player
protection if allowed to be fully
developed, that could change the
problem gambling landscape.
The bookmakers have woken up to
this and they are the ones now driving
this use of technology. Unlike their
competitors in the casino and adult
gaming sectors, who recruited me to
work for them, the bookmakers now
offer a wide range of responsible
gambling measures that offer more
control to players and more insight
into behaviour. Staff have now been
extensively trained in how to manage
FOBTs and to intervene when needed.
None of this is enough, but
bookmakers are now the drivers of
responsible gambling initiatives.
I quit the Stop the FOBTs campaign
for several reasons, some of them
personal, but if I had stayed I would be
expected to support the proposed £2
stake limit. Now. I can’t, because the
call for £2 is not based on any
evidence to support the argument that
it will reduce pathological problem
gambling. It won’t. The £2 figure is
one based on removing casino roulette
from betting shops, much to the
satisfaction of the other sectors – those
I used to work for. There has been an
understanding in the UK – established
pre the internet revolution – that types
of gambling should be strictly
designated to certain types of landbased gambling outlet. Pure machine
gambling in arcades, bingo in bingo
halls, casino games in casinos and
betting in betting shops, with a small
machine allowance for the latter. The
bookmakers challenged that
convention by putting roulette on to
FOBTs.
The internet, however, has torn that
convention up completely by
combining all these types of gambling
on one easily accessible platform. Now
amusement arcades are introducing
betting to their outlets, casinos
likewise are adding betting shops into
their premises, but the Government
looks set to take the regressive step of
banning casino games from betting
shops, limiting choice and driving
customers away from what are now
highly regulated premises with
extensively trained staff providing face
to face support. Let’s not forget you
can gamble up to £120 per minute on
machines in casinos, £48 per minute
in amusement arcades and even £24 a
minute on pub fruit machines.
The wheels on the FOBT
bandwagon are greased in hyperbole,
spin, misconstrued evidence and,
worst of all, commercial jealousy.
Some of which I am responsible for. It
was easy to beat the bookmakers up
over FOBTs – gambling is never
popular with public opinion and
always provides the kind of lines a
journalist loves. I created some of
those lines. That was all fine when
trying to wake bookies up, but the
‘There is no
single
overarching
solution to
problem
gambling
and slashing
stakes to
£2 will
certainly not
resolve it’
Government has fallen for the spin and
hyperbole – hook, line and sinker.
Problem gambling is a serious issue,
but FOBTs are not the sole cause of it.
The vast majority of customers gamble
safely and responsibly – not just on
roulette but on the vast array of games
available on FOBTs – many already
capped at £2 and under. Pathological
problem gamblers will simply be
pushed either online or to casinos and
arcades – the Government is shifting
the problem rather than allowing
bookmakers to deal with it head on.
Maybe next year it will be the turn of
the casinos to defend themselves from
a media onslaught over their “crack
cocaine machines”.
There is no single overarching
solution to problem gambling and
slashing stakes to £2 will certainly not
resolve it. Yet the Government is about
to throw away the work already done
by bookmakers and put thousands of
trained and skilled betting shop
workers out of their jobs by slashing
stakes. Philip Hammond is right to be
worried about the impact of this
decision. For those determined to put
the final boot in – step back from the
campaign and media generated hype
and think hard about the impact of this
decision. I have.
Adrian Parkinson was in charge of
FOBTs for the Tote. He was also a
consultant and spokesman for the
Campaign for Fairer Gambling and the
Stop the FOBTs campaign. He left the
campaign and the gambling industry
in 2017
The Daily Telegraph Wednesday 9 May 2018
***
3
Business
SSE and Npower face full investigation of merger by the CMA
By Jillian Ambrose
THE energy giants behind one of the
sector’s biggest mergers are poised to
offer the UK’s competition watchdog a
full defence of their £3bn plan which
will cut the Big Six suppliers to five.
SSE and Npower have opted for a full
Competition and Markets Authority investigation of their scheme to create a
new energy supply giant, rather than
offering measures to assuage the authority’s concerns that a merger might
lead to higher bills.
The CMA’s initial review of the deal,
which would create a supplier with a
combined 11.5m customers in the UK,
raised fears that the merger would reduce competition in a market already
plagued by concerns over unfair bills.
“SSE and Npower did not offer measures to address the CMA’s concerns,
and so it has referred the merger for a
more in-depth, phase 2 investigation,”
the CMA said.
However, industry sources told The
Daily Telegraph that the companies
were confident in their ability to make
the case for their merger in a full probe
rather than offer to alter the deal in a
series of piecemeal measures.
“The nature of the concerns would
always have been better handled in a
phase 2 investigation, and the timing of
the merger has always made allowances for this,” one said.
SSE plans to spin off its energy supply arm to merge with Innogy’s Npower
as a new energy supply giant on the
London Stock Exchange by the end of
this year. This would enable SSE, which
also runs power plants and energy
grids, to distance itself from the household market ahead of the Government’s
clampdown on profits through a controversial cap on energy tariffs.
But critics of the deal fear the new
company would stifle efforts to create a
more competitive market by creating a
company that would be Britain’s largest electricity supplier, and stand second only to British Gas as the country’s
largest household gas supplier.
The deal is also complicated by a
mammoth asset swap planned by Ger-
Government
contracts put cost
before expertise,
say outsourcers
OUTSOURCING sector bosses have
told MPs that the Government’s procurement proposition had gone “too
far” in a quest to keep costs down and
that the system needs overhauling, in
the wake of Carillion’s collapse.
Speaking to a parliamentary select
committee yesterday, Rupert Soames
said that in his four and a half years
leading the company, the only contract he could remember winning on
any factor other than price was to
manage facilities for Barts Health NHS
Trust.
Mr Soames said this proved that
‘The civil servants doing
this are trying to run
departments with very
limited resources’
government outsourcing was still
mainly based on cost, rather than the
expertise that private companies
could offer.
Phil Bentley, chief executive of Mitie, who was also appearing before the
committee, said: “There’s always this
drive to the lowest price as the easier
answer.”
He added that he thought more conversations between the public and private sector prior to a contract being
awarded would help.
“Innovation is taken out of the bids
because the OJEU rules [for tendering
work] are about creating a level playing field,” he said.
The committee was meeting as part
of a wider investigation into the way
the Government uses the private sector for services such as running
schools and prisons, following the collapse of outsourcing company Carillion in January.
Carillion has been criticised for bidding for work at extremely low prices,
putting its financial health at risk. The
Government is meant to assess contract bids against a variety of factors.
Mr Bentley said both Mitie and
Serco were different to Carillion,
pointing out that the latter had failed
because of its construction contracts
rather than its outsourcing.
He said the Government had been
unwise to award services contracts to
“an outsourcing company with large
construction risks”.
Mr Soames also told the committee
that different government departments had different policies for awarding work, despite there being
centralised rules for the process.
“It’s very dependent on the quality
of the team doing the procurement,”
he told the committee.
“I would also say that very often the
civil servants doing this are struggling
themselves. They are trying to run departments with very limited resources.”
He acknowledged that the private
sector should not use government
outsourcing contracts as “a licence to
print money” but wanted to see more
transparency over the costs at the
outset.
“The proposition at the moment has
gone too far – the proposition is that
you can make 5pc-6pc margins if it
goes really well, but if it goes wrong
[the Government] will bankrupt you,”
he said.
FirstGroup
falls as equity
giant decides
against deal
By Ben Woods
GARETH CATTERMOLE/GETTY
By Rhiannon Curry
Checking out Albert Frère is selling his £520m stake in Burberry after the shares gained 11pc
in the past month. The Belgian billionaire began buying shares last February, increasing his
stake to 6pc in November. Above, Paris Jackson and Cara Delevingne in Burberry fashion.
William Hill shareholders at
odds with chief ’s new pay deal
By Ben Woods
THE boss of William Hill has been hit
with a shareholder backlash after
nearly a third revolted against his improved pay package.
Plans to boost chief executive Philip
Bowcock’s salary by 9pc to £600,000
was met with investor ire, as 30.71pc
voted against the proposal.
While the remuneration report was
overwhelmingly backed at 69.29pc,
the opposition proved an embarrassing
moment for the chief executive.
Shareholder adviser firms Glass
Lewis and ISS had called on investors
to vote against the report ahead of the
firm’s annual general meeting.
The agencies claim his base pay was
nearly 10pc above that of his predecessor and his promotion from interim to
full-time boss was “not directly linked
to performance”.
The firm said: “The board has noted
the concerns of shareholders, and
while on balance we remain of the view
that the CEO remuneration is justified
in the context of the key events and ongoing industry challenges we commit
to engage fully with shareholders and
advisory bodies in advance of any key
remuneration decisions in the future.”
It comes as William Hill chalked up
rising sales at the start of the year after
the group was boosted by an “unprecedented run” of favourable results.
45pc
Boost William Hill’s US arm received from
strong bets on basketball, in-play betting
on tennis and a rise in ice hockey wagers
The betting firm saw group net revenues rise 3pc for the 17 weeks to April
24, underpinned by “very strong”
horse racing and football results.
Online sales climbed 12pc over the
period, helping to offset a 4pc drop in
high street takings as the firm grappled
with 15pc of UK and Irish horse racing
Titlestone takeover could
be on the cards for Paragon
By Rhiannon Curry
CHALLENGER bank Paragon is in the
early stages of talks to buy residential
lender Titlestone, as it seeks to further
expand the services it offers to customers.
The company confirmed yesterday
morning that it was considering the
possibility of acquiring Titlestone,
which is currently owned by US pri-
£2bn
The amount that Titlestone has lent to
more than 300 housing development
projects in the south of England
vate equity company Oaktree Capital
Management.
Titlestone was established in 2012 to
provide loans to developers building in
the south of England, and since then
has lent more than £2bn to more than
300 projects.
Although Paragon did not say how
much it could pay for the business, the
lender has a balance sheet of around
£600m.
FTSE 250 company Paragon said that
there was no certainty that a firm offer
would even be made, but said that the
“purchase of loan books and bolt-on
businesses represents a core part of [its]
growth and diversification strategy”.
Last September, Paragon restructured itself in order to push into mainstream banking services, including
development finance as well as business and car lending.
It combined previously separate entities into a single company called Paragon Banking Group, moving away from
relying on financing from its parent
company.
Having started life as a specialist
buy-to-let mortgage lender in 1985,
Paragon has shifted to offer a broader
range of financial services, and
launched a retail bank three years ago.
Buy-to-let mortgages are becoming
a smaller part of Paragon’s overall business but at the end of last year still accounted for 85pc of its balance sheet
and 65pc of profits.
Paragon’s shares rose 2.5pc to close
at 540p yesterday.
man energy giants E.On and RWE,
which owns Npower’s parent company
Innogy. This would leave E.On, which
operates big six supplier E.On UK, a
one-third stake in the new SSE-Npower
rival.
Innogy is understood to be anticipating calls from the CMA to sell off its
stake once the new company has been
created, and before the E.On-RWE deal
completes.
fixtures being abandoned. Shares in
the group closed up 0.6pc at 280.6p.
Mr Bowcock said the move to sell its
Australian business for £173m to Melbourne-based CrownBet had helped
strengthen its balance sheet.
He added: “William Hill has had a
positive start to 2018. In the UK, an unprecedented run of bookmakerfriendly sporting results led to unusual
wagering and gaming trends, which
we expect to normalise over time.”
While margins were higher, William
Hill noted that punters were less likely
to “recycle” their winnings into fresh
bets. The group’s US arm enjoyed a
stellar run, lifting 45pc, following a triple boost from strong bets on basketball, the introduction of in-play betting
on tennis and a jump in wagering on
ice hockey.
Bookies are hoping for a change of
the laws surrounding sports betting in
the US this year, given the Supreme
Court will issue a ruling on the future
of the Professional and Amateur Sports
Protection Act (Paspa).
Sainsbury’s boss is
‘in the money’ with a
£1.79m shares bonus
By Ben Woods
MIKE COUPE of Sainsbury’s has pocketed nearly £1.8m in shares just days
after unveiling a £15bn supermarket
mega merger with Asda.
The chief executive, who dropped a
PR clanger after the deal was announced when he was filmed singing
We’re in the Money, has secured 608,700
shares worth around £1.79m.
The shares have been handed over
in two tranches, 279,024 and 329,676,
and are linked to long-term incentive
awards from 2014 and 2016, which
have now vested.
Mr Coupe also sold 286,663 shares,
valued at £845,655.
A spokesman for Sainsbury’s said:
“Mike is not selling any shares for cash
and is not making any immediate profit.
He is selling a portion of shares to meet
tax and national insurance obligations.”
The mega merger, which is slated for
completion by the middle of next year,
would see the combined group commanding 2,800 stores across the UK.
Sainsbury’s and Asda have vowed to
slash prices on everyday items by 10pc,
and stump up cost savings of £500m.
US PRIVATE equity giant Apollo Management has said it will not make a firm
offer for FirstGroup, causing shares in
the train and bus operator to tumble.
FirstGroup sank 12.2pc to 97.5p
yesterday after Apollo pulled back
from tabling a formal bid. The Aberdeen-based transport group has rebuffed two undisclosed proposals from
Apollo, claiming an initial approach
“fundamentally undervalued” the
company.
Apollo, which runs more than
$250bn (£185bn) across its funds, had
until 5pm today to make an offer or
walk away.
FirstGroup owns America’s Greyhound buses and UK rail franchises
such as South Western Railway. It has
seen its share price fall around 8pc
since the start of the year.
It comes despite one investor urging
Apollo to firm up its interest in FirstGroup as it pressed for a “fresh face at
the helm”. The investor, who asked to
remain anonymous, said FirstGroup’s
management team was “under pressure”, and a formal offer from Apollo
would hand investors a choice about
what to do with their stake in the firm.
“I do think there is value in this company,” the investor said. “It’s just a
question of getting it out and it isn’t being evidenced at the moment.”
A move by Apollo to seize FirstGroup
may have proven controversial given
the political tensions around the rail industry. The default of the East Coast
mainline by Stagecoach and Virgin
Trains has fuelled Labour Party calls
for the railways to be renationalised.
Liberum analyst Gerald Khoo said
the approach had helped underscore
the “potential value that lies within
FirstGroup”. He said the firm’s management team were facing increasing
pressure to find ways to secure value
beyond their turnaround plan.
FirstGroup, which has a market
value of £1.2bn, saw its US arm
squeezed by bitter weather in January.
4
Wednesday 9 May 2018 The Daily Telegraph
**
Technology Intelligence
Microsoft opens a new
window as a grown-up
technology giant
James Titcomb in
Seattle finds a firm
making more money
than ever but critics
fear for its relevance
M
icrosoft is slowly
vanishing. Not in the
literal sense: the
company is more
profitable and
valuable than at any
point in its 43-year-old history. In the
four years since its new chief Satya
Nadella took over from his chestthumping predecessor, its share price
has almost tripled, finally passing its
dotcom bubble peak. But when it
comes to its place in people’s day-today lives, particularly in the eyes of
consumers, the company no longer
represents the technological zeitgeist.
The days of Bill Gates’ all-conquering
beast, which set the tone for the tech
industry with Windows, Internet
Explorer and Hotmail, are gone. So is
the ruthless competitiveness that
marked the era of Steve Ballmer,
Gates’ predecessor, whose reign was
defined by a series of misguided bets:
from its attempt to rival the iPod with
its Zune music player to its disastrous
€5.4bn (£4.8bn) acquisition of Nokia’s
mobile phone business.
On Monday, four years after Nadella
replaced Ballmer, we saw the clearestyet representation of the third era of
Microsoft. The company’s annual
conference in Seattle, Build, was
notable for its lack of attentiongrabbing launches, and for barely
mentioning Windows, the business
that has been at the core of Microsoft
for three decades.
Instead, the show was a veritable
geek-fest. The three and a half-hour
presentation that begun the
conference featured several displays of
computer code being written on stage,
punctuated by an organised exercise
break teaching programmers how to
beat carpal tunnel syndrome.
The company’s key announcements
related to its cloud computing
business Azure and Microsoft 365, its
suite of productivity tools. Some of the
biggest cheers were reserved for new
software related to “edge computing”
– a term that loosely means relying on
devices instead of central data centres
to carry out computing work – and
giving developers better access to
machine vision and voice recognition
technology.
It was the sort of event that
Microsoft in its pomp would never
have countenanced. In another move
that would have seemed impossible a
few years ago, the company invited a
representative from Amazon, its main
rival in the cloud computing world, on
stage to demonstrate a tie-up between
Cortana, Microsoft’s virtual assistant
and Alexa, Amazon’s counterpart. “We
want customers to have access to
multiple digital assistants, not be
bound by some walled garden,”
Nadella said.
Technology companies tend to be
fiercely competitive, and collaboration
is seen as a sign of weakness. But
under Nadella, Microsoft has pursued
it with vigour. Microsoft apps once
reserved for the
company’s failing
smartphone system, such
as Word and Outlook, are
now favourites on the
iPhone and iPad.
While the likes of
Google and Apple tend to
hold to their innovations
in artificial intelligence
as competitive
advantages, Microsoft
makes most of its AI
technology available to its
customers.
“We have to go from AI
being in the hands of a few
companies to AI being
everywhere. That’s the real
shift,” Nadella said.
Last month, Nadella issued a
sweeping restructure of Microsoft
that better reflected his vision. For
the first time in decades, the
company does not have a division
dedicated to Windows, a business that
was Microsoft’s key advantage five
years ago.
Instead, its rising star is the Azure
cloud computing division, which rents
out internet servers and software to
businesses. Revenues from Azure have
risen 93pc in the last year; compared
to 4pc growth in sales of Windows
licences are up 4pc. The next fastestgrowing business unit is corporate
sales of its Office 365 subscription
service, up 42pc.
Microsoft is now more about
running the plumbing that makes
other businesses and internet services
work. Nadella talks about
“empowering” others, rather than
beating them. There is no doubt that
Satya Nadella,
Microsoft chief
executive, speaking
at the company’s
annual conference
the
move has
paid off so
far. In the
quarter Nadella was
put in charge,
Microsoft’s revenues were
$20.5bn (£15.1bn), its profits $5.7bn.
Four years later, that has grown to
$26.8bn and $7.4bn.
This has not won it plaudits
everywhere. The technology website
The Verge said that Microsoft was in
danger of becoming another IBM, the
company that battled Apple at the start
of the PC revolution but has since
become more of a utility. Many will
miss Microsoft’s place in the
technology wars, when all companies
were striving to take every part of
people’s online lives.
But as the new incarnation of the
company has seen it take something of
a back seat, it has also established itself
as the
grown-up
in the room.
Nadella spent
plenty of time
on Monday talking
about Silicon Valley’s
responsibilities when it
comes to privacy and
opening up access to new
technologies. It announced a
$25m grant for researching how AI
could help disabled people. Not
chasing new trends or the latest trends
has allowed it to do this with an
authority that some of its younger
counterparts lack.
Shareholders, who have sent
Microsoft’s market value soaring to
$730bn, are happy. Microsoft may be
fading into the background, but its
opportunity now is just as lucrative.
By James Titcomb
GOOGLE will set time limits on apps
and make smartphones easier to ignore
in response to fears that they are becoming too addictive.
It is one of the first times a major
technology company has acknowledged that smartphones and social media apps may have become too
distracting, following complaints from
health experts that people have become
dependent on the devices. Unveiling
the changes at its annual developer
conference in Silicon Valley, Google
said future Android phones would include an optional app timer that will
alert owners when they have spent a
preset amount of time on an app.
The feature will “nudge” users when
they are approaching the time limit,
and then make the app’s icon black and
white when they have passed it, to discourage them from using it.
A separate feature will allow users to
specify a particular bed time, and si-
lence alerts as well as turning the
phone’s colour screen to a greyscale format, a change that is believed to make
mobile phone screens less attractive.
A third update is designed to automatically recognise when a phone has
been placed facedown on a table and
respond accordingly, by silencing notifications such as phone calls and texts.
The software will also tell users how
much time they are spending on individual apps and how many times in a
day they unlock their phone.
The changes will be included in the
next major update to Android, which is
due to be released later this year. The
software accounts for more than half of
smartphone sales in the UK, and more
than three quarters worldwide.
Earlier this year, Apple investors demanded that the company include features in the iPhone that would make
them less addictive to children. Jeremy
Hunt, the health secretary, recently demanded that social media companies
introduce time limits for children.
DAVID PAUL MORRIS/BLOOMBERG
Google aims to help smartphone addiction
Sundar Pichai, Google CEO, speaks at the company’s annual conference in Silicon Valley
Data rights of EU citizens in UK
will cross ‘red line’ in Brexit talks
By Anna Isaac
THE UK could struggle to secure a critical Brexit agreement on data, despite
firms spending millions on compliance
ahead of a EU legal deadline this month.
Even if it does, it will have to accept
ongoing deep levels of oversight by the
European Court of Justice, potentially
breaching one of the UK’s negotiation
“red lines”.
Data held in the UK will still be subject to rulings from Brussels following
Brexit if it includes EU citizens’ information, even if the both the EU and UK
achieve mutual agreements on data.
The Government and the EU announced on Friday that data protection
was a “cross-cutting” topic in their
framework for talks, and David Davis
told MPs last month that data is the
“biggest single area of intergovernmental work of anything we’re doing”.
However, lawyers, trade experts and
industry bodies have all raised concerns
about the practicalities of keeping data
flowing post-Brexit.
Both ECJ oversight of data disputes
and the rights of EU citizens when it
comes to data gathering by intelligence
services could present major negotiation hurdles.
Giles Derrington of industry body
techUK said that the complexity involved with protecting data flows between the EU and UK had only been
fully appreciated by Government in
the last few months. “If you can’t get
this over the line you can’t get a good
Brexit deal,” he said.
Once it quits the EU the UK will lose
a vital exemption for the data activities
of its security services, granted to it as
an EU member state. Under the Lisbon
Treaty, the activities of the UK’s security services were free from EU data
rules. That will no longer apply once it
leaves the bloc and seeks a green light
from Brussels to receive EU data, an essential process in almost every transaction consumers and businesses make.
The EU has already said that the UK
“cannot be trusted” with secure information. Now experts are calling on the
Government to realise this has serious
implications for commercial activities
too.
The UK does not start from a point of
equivalence with all other EU countries on the way it handles data, in part
because of the mass surveillance activities of its security services. Its postBrexit data handling will therefore not
be solely judged on compliance with
‘ The Government have
rightly said they want to
be part of the EU’s data
protection system’
the General Data Protection Regulation (GDPR) – the overarching law intended to protect the rights of EU
citizens over their data.
Other activities, such as passing details about EU citizens to other third
countries due to security agreements,
will also have to be considered.
Hosuk Lee-Makiyama, a former diplomat who has represented the EU at
the World Trade Organisation, told The
Daily Telegraph: “The security relationship the UK has with third countries
cannot be changed.
“This is where I foresee a major
stumbling block. The adequacy decision contains other criteria – you can’t
just copy and paste GDPR and assume
you will be compliant.”
Some major economies have not
been granted a so-called adequacy decision needed in order to use EU citizens’ data.
Canada only has an agreement which
covers commercial information, and
Australia has not been given an adequacy rating by the EU, despite giving
the EU one.
The UK is seeking to ensure that the
Information Commissioner’s Office is
recognised under a bespoke data
agreement with the EU.
Experts believe that will require accepting that the ECJ as the ultimate decision maker in some data disputes,
risking a clash with a Brexit negotiation
red line.
Mr Derrington said: “If we want the
UK’s data protection regulator to help
shape how the rules work and be able
to hold companies to account if data is
abused, then that means being part of a
system in which the ultimate interpretation of the law is the ECJ.
“The Government have rightly said
they want to be part of the EU’s data
protection system because it is so important to our economy and our security, but it will require a blurring of the
ECJ red line.”
Allie Renison of the Institute of Directors said: “It is hard to imagine that
any future deal on personal data flows
between the UK and EU could be completely immune from review by the European court.”
The Department for Exiting the EU
said that, in March, Prime Minister
Theresa May confirmed that the jurisdiction of the ECJ in the UK must end.
“It also means that the ultimate arbiter of disputes about our future partnership cannot be the court of either
party,” Mrs May said.
A caveat that ECJ rulings would continue to “affect” the UK was applied.
Facebook in major management reshuffle
By Hannah Boland
FACEBOOK is appointing new leaders
to its main divisions, in the most substantial reshuffle in its history and in a
move which reveals its blockchain ambitions.
As part of the overhaul, Facebook
has reorganised its operations into
three units: ‘Family of apps’, new platforms and infrastructure, which includes virtual reality and artificial
intelligence technology, and central
product services, which comprises fea-
tures used across products such as adverts and security. Heading up the apps
unit, under which Facebook, Instagram, WhatsApp and Messenger apps
fall, is chief product officer Chris Cox.
Chief technology officer Mike
Schroepfer will manage the new platforms and infrastructure unit. This will
include a blockchain technology team,
to be led by former Messenger chief
David Marcus. Mr Marcus has experience with payments technology, having previously been president of PayPal
prior to joining Facebook. Chief execu-
tive Mark Zuckerberg had, earlier this
year, signalled cryptocurrency and encryption could be a focus, saying he
would be “interested to go deeper and
study the positive and negative aspects
of these technologies, and how best to
use them in our services”.
The third division, central product
services, will be overseen by Facebook’s vice president of growth, Javier
Olivan. The reshuffle, first announced
by US news website Recode, comes a
week after WhatsApp’s founder Jan
Koum stepped down from Facebook.
The Daily Telegraph Wednesday 9 May 2018
***
5
Business
Clydesdale and Yorkshire Bank offers
£1.6bn in takeover bid for Virgin Money
Steelworkers
fear job losses
as Tata offloads
five businesses
By Alan Tovey
FEARS are growing over the future of
hundreds of UK steelworkers’ jobs after Tata began seeking buyers for five
of its European businesses following a
strategic review.
The news comes after the international steel company’s British arm
failed to hit internal profit targets, raising doubts about the progress of a turnaround of the business.
At the height of the steel crisis in
2015, Tata tried to sell all its UK operations over worries about its performance and its massive pension liability.
However, it then executed a U-turn,
instead setting about investigating a
merger with European rival Thyssenkrupp and refocusing on the giant Port
Talbot steel production site.
The company also managed to agree
a deal which eased the burden from the
£15bn retirement scheme which had
130,000 members.
About 1,100 people are employed in
the five niche businesses which are
now for sale, and about a quarter of all
the affected workers are in the UK.
Deal could create a
bank with assets of
£83bn and provide a
challenge to the big
players in Britain’s
banking market,
reports Tim Wallace
V
Does this show challenger
banks are coming of age?
This is not the first challenger bank
deal. TSB was taken over by Spanish
group Sabadell in 2015. In the more
specialist
list banking market Aldermore
has merged
erged with South Africa’s
First Rand at the end of
2017. Shawbrook was
boughtt out by private
equity last year.
But this is the first
one to bring an
under-sized
-sized old bank
– the Clydesdale Bank
and Yorkshire
orkshire Bank
both have
ave roots in the
19th century
entury – and match
it with a new lender on
Hans Fischer, Tata
Steel Europe’s chief
executive, said other
businesses sold by
Tata had become
‘more sustainable’
NIGEL RODDIS/REUTERS
irgin Money is in buy-out
talks. The Clydesdale and
Yorkshire Bank wants to
take over the trendy
upstart, and is waving a
£1.6bn bid at it right now.
The sale would mean a £500m payout for Sir Richard Branson’s Virgin
Group Holdings. Chief executive
Jayne-Anne Gadhia’s shares would be
worth more than £7m at this price, too.
More important than the personal
fortunes made is the impact on
Britain’s overall banking market.
It has long been dominated by five
players – the big banks Lloyds, RBS,
Barclays and HSBC, plus the
Nationwide Building Society, which
were joined by global titan Santander
which bought Abbey in 2004.
Virgin Money is a much newer
entrant dabbling on a small scale until
eventually it made a real splash when
it bought the remains of Northern
Rock in 2011.
Since then it has grown rapidly
through credit cards, savings accounts
and mortgages, and, to a more limited
extent, credit cards.
By merging with CYBG, it will form
a bank with combined assets of £83bn.
That is twice the size of TSB and more
than one-third the size of Nationwide.
Sir Richard Branson during a media conference in Newcastle after Virgin Money took over Northern Rock. Inset below, Jayne-Anne Gadhia, Virgin Money’s chief executive
a really substantial scale. It marks an
important departure from the
previously planned growth path for
the challengers, too.
The new banks typically have been
set up with enormous room for
growth in their infrastructure.
In their early days this worked well.
The big banks were focused on sorting
out their own problems after the
financial crisis, leaving room for new
entrants to steal customers away.
But now those big banks are
competing harder, it may be tougher
to grow. In a sense this
th is the first
really big test of the challengers,
and
c
they
t y have found they
th
the
th need scale to
make
m e it work.
mak
As a result, the
th challengers can
merge to trim ttheir costs, and to
gain the scale needed to make
the most of their
th
infrastructure.
infrastructur
Doubling in size does that
quickly. It spreads
future
sp
costs, too. Virgin
Money is
Vi
looking at spending
more than
spe
£100m on a new IT system.
It could either spread that cost over a
bigger entity, or use CYBG’s tech
instead.
Analyst Ian Gordon at Investec
believes “cost synergies of 10-20pc
would not prove unduly heroic”, while
Gary Greenwood at Shore Capital
considers 10pc could be possible,
while UBS’s Charmsol Yoon believes
25pc of Virgin’s costs would be a
reasonable expectation.
Given the combined entity will have
initial costs of almost £1bn, these are
not inconsiderable numbers.
One key area could be cost savings
on technology, by combining the IT
systems into one.
Keeping funding costs down is
crucial too. The Bank of England’s
Term Funding Scheme gave all banks
access to cheap cash, but that has now
come to an end. Banks which have
lower costs will be able to raise funds
more competitively in the market.
CYBG has long been looking for ways
to diversify. It remains strongest in its
historic heartlands of Scotland and the
north of England. It also wants to find
MPs probe ‘hideously expensive’
Swansea Tidal Lagoon project
By Jillian Ambrose
THE long-standing row over the troubled Swansea Tidal Lagoon project is
set to reignite today as MPs gather to
scrutinise the project’s costs while a rival developer claims its project could
be half the price.
Mark Sharrock, the boss of developer Tidal Lagoon Power, is braced for
questioning from a joint select committee hearing which hopes to thrash out
the reasons behind a five year political
stalemate over whether to support the
£1.3bn project.
David Davies, the Welsh affairs committee chairman, said there are still
“serious questions” to be asked about
the value for money of the project, and
its environmental impacts, even after
the project won favour in an independent review by Charles Hendry, a former
energy minister, two years ago.
The Swansea plan also has the enthusiastic backing of many Welsh MPs
who believe the clean power project,
and its proposed follow-on venture
near Cardiff, will bring an economic
boom to the area.
But others have balked at the developer’s call to be paid £89.90 for every
megawatt hour of electricity produced
from the relatively untested technology over its entire 90-year lifespan.
Dale Vince, the unconventional
green industrialist behind Ecotricity,
£89.90
The amount that Tidal Lagoon Power
wants to be paid for every megawatt hour
of power produced over a 90-year lifespan
claims that his rival project at Solway
Firth on the Scottish border will have
“superior economics” and the same
generation capacity as Swansea. The
owner of Britain’s first vegan football
team is a long-time critic of the Swansea project, which he has branded
“hideously expensive”, and has called
for an “open competitive process”.
“The government has done well to resist the last couple of years of intense
lobbying pressure from backers of the
Swansea scheme,” Mr Vince said,
“There was never a case for paying that
much or for moving too quickly to allow for proper competition.”
The timing of Mr Vince’s intervention ahead of the committee hearing is
likely to raise eyebrows after his failed
attempt last summer to join the board
of rival green energy supplier Good
Energy, whose chief executive, Juliet
Davenport, is also Mr Sharrock’s wife.
Rachel Reeves, the business select
committee chairman, said the Swansea
Tidal Lagoon project has been “a tale of
indecision with the Government having dithered over this for five years and
still to reply to the Hendry Review,
published over a year ago”.
“If the Government wants to go
ahead with this project, then it needs to
say so urgently. If not, then it must get
on with it and let the public and investors know of its intentions,” she said.
Standard Life Aberdeen
dispute ‘surprises’ Lloyds
US Treasury yields
to hit 4pc, predicts
JP Morgan chief
Continued from Page 1
responded that it was “disappointed by
the comments made by Standard Life
Aberdeen, particularly in the light of
our position as a major customer”.
“Standard Life Aberdeen is a clear
and material competitor of Scottish
Widows and Lloyds Banking Group in
the UK and to suggest otherwise is not
credible,” the bank added.
By Tom Rees
‘Standard Life Aberdeen is
a clear and material
competitor and to suggest
otherwise is not credible’
Aberdeen began managing assets
for Lloyds’ Scottish Widows in 2014
when it bought Scottish Life Investment Partnership from the bank.
However, Lloyds said it had the right to
axe the deal if Aberdeen joined forces
with a competitor, as it did with Standard Life last August.
Earlier this year Lloyds said it would
be terminating its agreement with
Standard Life Aberdeen. At the time,
Scottish Widows’ chief executive An-
tonio Lorenzo said the deal meant that
its assets were now “being managed by
a material competitor”, adding that it
had started to find an alternative.
Lloyds said it was “confident” of its
legal position and was “surprised at
the course of action pursued by Standard Life Aberdeen”.
The bank noted that “in any event
management of the funds in question
would have ended formally under the
terms of the contracts in March 2022”.
The two are engaging with each
other within the framework of the dispute resolution process in their contract and meetings are expected to be
held between senior executives at each
of the firms over the next few weeks.
In February Standard Life Aberdeen
said it was selling the majority of its insurance business to smaller rival
Phoenix Group for £3.2bn.
At the time, Standard Life Aberdeen’s co-chief Keith Skeoch said: “We
haven’t done this transaction to solve
the competition issues [with Lloyds].”
Fellow co-chief Martin Gilbert added:
“We have a very good relationship
with Lloyds, it was more out of sadness
that we reached where we were.”
JP MORGAN boss Jamie Dimon has
warned investors to brace for Treasury
yields to hit 4pc as rising inflation in
the US mounts pressure on the Federal
Reserve to raise interest rates.
The investment banking chief said
that markets should prepare for a
pickup in growth and inflation but insisted that a rise in yields to a fresh
multiyear high would be a “normalisation” if the US economy is “healthy”.
With inflation in the US strengthening, markets are beginning to price in
up to a total of four rate hikes at the Fed
in 2018. Economists expect inflation to
hit 2.5pc tomorrow, its highest level in
over a year, to ramp up the pressure on
the Federal Open Market Committee to
tighten policy at the central bank.
In an interview on Bloomberg TV
yesterday Mr Dimon played down fears
that central banks winding down their
experimental quantitative easing programmes could destabilise the economy.
The direction of global growth will
be “more important” than fluctuations
on financial markets, he argued.
more younger customers, as older
savers are less profitable than youthful
borrowers.
Virgin Money, with its strong brand,
could help to bring this. It has younger
customers and its loan-to-deposit ratio
of 119pc shows it has no problem
generating loans.
Its online focus means it has a more
nationally-distributed audience.
The type of business conducted is
also getting broader, with CYBG
bigger in small business banking and
Virgin better in giving out mortgages
via brokers.
What could go wrong?
Mergers are never easy, and bringing
together two companies with very different heritages could be tricky.
Branding alone is a challenge when
the two companies are highly distinct
currently.
Regulators are already a threat – if
not to the deal itself, then certainly to
part of their business models.
For one, Virgin Money has had great
success in the credit card market, with
long-term interest free cards in funky
patterns driving its growth.
But the Bank of England is cracking
down on the consumer credit market,
and there are signs of a sharp
slowdown in the sector. That could
undermine the bank’s attractiveness,
even though it has had few problems
with bad loans so far.
Another major hazard is merging
the IT systems. As TSB has discovered,
this is a difficult process. Even that
bank, backed by the resources of a big
foreign parent with its own shiny new
system, has tumbled into weeks of
outages for customers.
All of the big banks have thrown
fortunes at their own computers to
modernise the systems.
Virgin and CYBG will have to play
that carefully if they want to make cost
savings while avoiding disaster.
If this is the moment challenger
banks come of age, they will have to
show their worth by avoiding the
pitfalls which their bigger competitors
have fallen into too often in the past.
The businesses being sold in the UK
are: Cogent, which makes electrical
steel and has operations in Newport,
Wales; Walsall-based Firsteel, which
makes steel for kitchen products; and
Engineering Steels Service Centre,
which processes engineering steels,
based in Wolverhampton. Also going
under the hammer are Kalzip, a roofing
materials business in Germany, and
Tata Steel Istanbul Metals.
Hans Fischer, Tata Steel Europe’s
chief executive, said the plan follows
the sales of the company’s Scunthorpebased long steel operation to turnaround investor Greybull for £1, and
Liberty’s £100m acquisition of Tata’s
speciality steel business.
“Under new ownership these former
Tata Steel businesses have found the
focus to secure a more sustainable future,” Dr Fischer said.
However, Roy Rickhuss, the leader
of Community, the union which represents steelworkers, said it was “yet to
be persuaded of the business cases for
sales” and that the disposals would
bring “yet another period of uncertainty” to the industry.
Tata said that even after the sales it
would still employ about 20,000 people in Europe.
6
Wednesday 9 May 2018 The Daily Telegraph
***
Business
An unforeseen threat forces
us to sell Electronic Arts – put
the money in Adobe instead
Adobe
Questor
Follow the Money
Richard Evans
The games publisher
is at risk from a
‘disrupter’. But
Adobe’s business
model seems secure
200
150
50
0
2013
2014
2015
2016
produced by Epic, a smaller business
than Electronic Arts. However,
Tencent, the Chinese tech giant that
runs Asia’s biggest gaming platform,
owns 40pc of Epic.
Yiu, who runs the Blue Whale
Growth fund, said it was possible that
the free-to-download model would
catch on. This would chip away at
Electronic Arts’ user base or force
the company to follow suit. Even if
many gamers remained loyal to its
products they might spend some
of their time playing free games,
which would reduce the time spent
playing Electronic Arts’ games
and hence the amount of money
2017
Our replacement for Electronic Arts is
Adobe, which is famous for its “PDF”
document format but actually makes
most of its money from a series of
software packages for the publishing
and creative industries. The stock is a
top-10 holding in Yiu’s fund.
Adobe exploited another disruptive
technology, “cloud” computing,
several years ago when it stopped
selling its software outright and
instead required customers to “rent” it,
paying a monthly fee for online access.
“The success of this move surprised
the company – sales roughly doubled,”
Yiu said. “While a subscription at, say,
$10 a month seems cheaper than paying
$300 upfront, it’s more expensive over
five years, for example.” And piracy,
which was a huge problem, especially
in emerging markets, was reduced by
the move to online access.
“Adobe’s publishing and creative
software is effectively essential – there
are no real competitors,” the fund
manager added. He said a new online
advertising product that should allow
artificial intelligence to customise
adverts into multiple personalised
forms could also be a money-spinner.
The stock trades at about 30 times
earnings for the next 12 months, which
Yiu said was reasonable given its
growth rates of 20pc or more and the
resilience of its business model.
Questor says: buy
Ticker: NASDAQ: ADBE
Share price at 5.30pm: $232.70
 Market value:
$113.8bn
 Turnover
(2017) $7.3bn
 Pre-tax profits
(2017): $2.1bn
 Yield: nil
 Most recent
year’s dividend:
nil
 Net debt
(2017): $4bn net
cash
 Return on
capital (2017):
18pc
 Cash
conversion ratio
(2017): 90pc
 p /e ratio (next
12 months,
estimate): 34
100
THE disruption of existing business
business model. Fortunately,
the rest of the market does not
models is one of the most powerful
seem to have appreciated it yet. This
themes of the modern economy. New
will allow those who follow our
technology, if adroitly exploited,
updated advice to sell the
can allow start-up firms to lure
shares to bank a
customers from previously
Adobe
modest profit.
unassailable incumbents
We explain below what
at lightning speed.
Buy
has happened to affect
But sometimes tech
Electronic Arts’ prospects
stocks themselves can be
and go on to suggest
on the receiving end.
Successful move to
‘cloud’ computing;
another technology stock
In October last year we
shares reasonably
into which readers who
tipped Electronic Arts,
valued
sell may want to reinvest
the computer games
the proceeds.
publisher. At the time its
revenues seemed secure thanks
to its stable of popular games in
Update: Electronic Arts
areas such as soccer (it has the Fifa
Nasdaq-listed Electronic Arts, like
franchise), American football and
most games publishers, makes its
basketball.
money first by charging users to
But things can change quickly
download its games and then by selling
in the world of gaming and
them add-ons or “in-game purchases”.
Stephen Yiu, the fund manager
But a disrupter to this lucrative
whose holding of Electronic Arts
business model has appeared in the
prompted our tip, told Questor
form of a game called Fortnite, which
this week that he had
is free to download. Fortnite, which
spotted signs of a new
threat to the company’s also offers in-game purchases, is
New holding: Adobe
Key
numbers
At 5.30pm (BST): $232.7
250
$
2018
spent on in-game purchases.
“We are not a trading fund but
neither do we believe in buy and hold
forever if we have concerns about a
holding’s business model,” Yiu said.
“We like disrupters but we don’t like
being disrupted.
“Electronic Arts’ recent financial
numbers look good but we are not
sure what’s going to happen and prefer
to watch from the sidelines. We have
therefore sold our entire holding.” We
advise readers to do the same, banking
a gain of about 5pc in sterling terms.
Questor says: sell
Ticker: NASDAQ: EA
Share price at 5.30pm: $122.53
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
© 2018 Tradeweb Markets LLC. All rights reserved. The
Tradeweb FTSE Gilt Closing Prices information contained
herein is proprietary to Tradeweb; may not be copied or
re-distributed; is not warranted to be accurate, complete or
timely; and does not constitute investment advice. Tradeweb
is not responsible for any loss or damage that might result
from the use of this information.
52 week
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216⅜ BT Group
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1341
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—
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1324⅜ 1010 Young & Co - N/V 1220 — 1.6 22.1
The Alternative Investment Market is for young and growing
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quotation, and may be difficult to sell.
825¼
Net Asset Values © 2018 Morningstar Estimated at previous
⅛
—
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167 InvesPerp Sel UK E 185*
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1020
287¾* +6⅝ 3.8 13.0
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87⅛ Soco Intl
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570
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73
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1342* +10 3.4 11.3
760
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927
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2587
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2186 +19 2.1 23.2
2664
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324
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284
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2214 Persimmon
67⅛ Microsoft $
+1 3.4 15.5
97⅝
260 Invesco Inc Gth Tr
2901
97⅞
398*
4¼ Petrofac ●
312
379⅞
279⅜ +1 1.8 18.5
337¼ National Ex ●
823½
309½
1438 Superdry ●
219⅞ Mitchells&But ●
414⅛
2015 +5 1.6 1873
739⅞ Hend Smaller Co
Information technology +0.27%
286¾
558½ Vedanta Res ●
1812 RIT Cap Ptnrs ●
247⅝ +3¾ 3.3 16.1
7.2
0.5
2030
5719* -8 2.9
2681 +18 2.2 13.5
-⅝ 3.4
337
1110
6.5
56¾
-1 1.7
8110⅜ 4973⅜ Reckitt Benck
20.6
52⅞ Merck $
276
482* +6 2.9 15.5
—
66⅜
265 Hend Alt Strat
938¾
134¼* -3 3.3 27.4
108¼ +2¼ 6.9
305
+5 1.1 22.5
1884½ +9½ 2.1 28.9
NAV
39350 -50 1.4 38974
1304½* +6½ 2.0 20.1
699
95⅞ Marston’s ●
52 week
165 Hend High Inc
3564 +20 0.4 52.9
407
52 week
153¾ Hend Intl Inc
229*
2060 NMC Health
1481½ Burberry
99 F&C UKRealEstInv
147¾
Support services +1.10%
172
181⅜ ConvaTec Grp ●
2024
109
—
137⅛
201½
349⅛
3728
486⅝
480 Dialight
+2
137
2390* +40 2.6 25.8
851
1099
204
127 F&C Mgd I
1870 S & U
Household goods +0.03%
8.8
184 F&C Mgd G
146
2254 Rathbone Bros ●
560¼* -1⅜ 7.7
3341 -16 4.0
-9.7
211⅜
2842
1173 Smith & Nep
9.1
2.8
2750
495⅜ Mediclinic Int
4112 +36 2.6
419½ Costain
642 +14¼ —
1442
2718 Bellway ●
494
— 1.1
540 +13 2.9 12.5
890⅛
— 5.3
3031 Berkeley Grp
90½
2402⅞ 312⅛ Provident Fin ●
991½
7.5
138
3805
250 Boot H
5⅝ NEX Group ●
400¼ Paragon ●
301¾* +3 1.2 12.4
4270
354
556
1100 +10 2.1
172
620
+2
840½ Workspace Gp ●
245
2020* +25 3.9 18.8
471
1.6
1135
6006* -44 2.5 27.4
-8 2.4 1049
288
352 Fidelity Asian V
263
-¼ 2.5
122
+6 1.0
408¼
844 +7½ 3.9 18.3
164¾
332
398½ +1 1.3
1841 +45 1.7 41.2
543½ IG Group ●
-¼ 1.0
143⅜ McDonalds $
51 Lonmin
— 1114
399⅜
1258 Hargreaves L
19⅝
178¾
Oil & Gas -1.07%
139* -1¼ 3.0 18.1
868½
10½ Marathon Oil $
187⅛* +3⅝ 1.2 57.9
736
118 Carr’s Grp
1935
20⅞
107⅞ Mandarin
4024 -51 5.3 11.1
154
1551 +14 3.9 12.1
4774* +107 1.6 23.1
211⅜
4226½ 2901½ Rio Tinto
-1.54
710⅝ -3¾ 5.3 20.0
3656 Intercont Hotels
97
981¾
+0.88
650½ HSBC
4944
— 2.5
66
1.44
1315 Close Bros ●
+4 1.0 66.7
100
95
Great Britain
1692
320
97 Warehouse REIT
— 8.7
70
798⅝
237 Urban&Civic
105¼
— 11.7
272
396⅜ +⅜ 4.2 15.8
325
63
-½ 1.0
318⅞ Ashmore ●
-0.2
89½
-½ 16.4
General financial +1.31%
—
88½ Northern 3 VCT
67
— 5.1 12.1
-9
-5¼ 4.5 11.9
61½ Northern 2 VCT
259
769
51
722
102
64⅝ Nthn Venture
153⅝
700¼ +22¼ 2.7
77
234 Pacific Assets
123⅛ Centrica
569 IAG Intl Cons Air
211
86½
Gas & Water -0.39%
701⅞
352
268
2.5
—
5540 Randgold Res
169
4.2
838* +1½ 2.7
8255
525
-½ 2.1
618 Unite ●
1190 +2 4.2 1151
449* -14 2.1
95⅝
848½
1127 Murray Intl ●
144 BlckRck NrthAmerInc 159¼ +1¼ 5.0
93½ Manpower $
17.9
1314
400½ BlackRock Latin
0.1
136⅞
—
577¾ Polymetal ●
171
-1 2.7
-1
1074
501½
122⅝
238
120½
2734 +28 1.5 18.0
121¼ Johnson&John $
205 Kenmare Res
847
2386 Ass Brit Fds
148⅜
141
782
3387
3.2
+4 3.4 -76.8
150¼ +¼ 4.5
+4 4.6
-2.42
2.9
139⅜ Tritax Big Box ●
807 +13 0.2
-2.94
-¼ 3.7
110⅝ +1¼ 2.0
151⅜
776
–
51⅝
81⅝ JP Morgan Ch $
— -12.6
710 Murray Income
-0.52
50 Intl Paper $
119⅜
-½
654½ Monks ●
0.56
67
8.5
-10 2.0 16.0
33½
351¾
0.04
10.5
Hummingbird
⅜
542
Japan
4557½ 3678½ Unilever
40
-4 4.9
510*
Germany
387⅛ Santander
5435
1746
2326
2454¾ 1485¼ Secure Trust Bk
130⅝ Centamin ●
498½
1320
541¾
—
975
—
674
3254
649⅜
-2 2.6
1075* -3 3.7 18.0
4502¾* +58¾ 2.6
611
6155
43.4
—
1540 +2½ 3.2 1654
10-year Government Bonds
—
+⅜ 7.3
1440 Lowland Inv
5¼ Smith (DS)
273¼ +1
36½
549⅞ Law Debenture
565
239⅝ Ryl Bk Scot
31¼ RDI REIT ●
1590
274.84 263.31 Treas 2% IL 35 264.14 -1.34 1.19 0.00
304¼
41
652
1354 Smiths Gp
1204
993⅝* -2⅜ 3.8 17.6
7.7
530
1697
+½ 4.6 15.0
Travel & Leisure +1.21%
125
375.00 353.40 Treas 4⅛% IL 30 358.49 -1.28 2.35 0.00
65⅞*
—
—
-¼ 4.5
88
62¼ Lloyds Bk Gp
309
— 5.4
20
408 Aberdeen New India 456½ +1½ —
2145
73⅝
—
119½
113½ Aberdeen Diversified 122½
372.89 354.79 Treas 2½% IL 24 359.31 -0.65 1.96 0.00
206⅞ +1¼ 3.1 -20.1
—
122 Raven R CnvPref
547
373.15 360.81 Treas 2½% IL 20 361.63 -0.09 2.29 0.00
177¼ Barclays
19 Raven R Wts
122
-¼ 3.9 21.8
125
2⅛ Melrose Ind
220⅛
29
9.4
8.4
-9.3
51 Low&Bonar
261⅞
447¼
8.7
233¼* +1¾ 1.8 -194.3
91
Index Linked Securities
Banks -0.23%
1.4
+2 3.4
279 Fenner ●
-3.7
-⅜ 2.7
265
1350 Cropper J
—
62½
192¾ +3¼ 4.0
103½
213
62¾ Colgate Palm $
162¼ LondonMetric ●
624½
P/E
1.1
77⅞
192¼ McKay Secs
1975
Price (p) +/- Yld
1.2
+¼ 3.2
192⅞
143.85 -0.48 4.17 1.50
52 week
High Low (p) Stock
+⅛ 3.6
38⅛
289
124.59 -0.29 4.01 1.23
Aerospace & defence +0.15%
125
36⅛ Coca-Cola Euro $
1350 -22½ 1.0 33.3
153.80 142.35 Treas 6% 28
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.
102½ Chevron $
44¾
4621* +55 1.3 29.5
132.85 123.92 Treas 5% 25
-2.18
133⅞
11⅜ Sky
448⅝
T-Bonds
1.2
3873 Rightmove ●
-⅜ 1.4 18.3
+0.24
-⅜ 2.1
4626
78⅜*
Bunds
149⅜
1402
59½ Coats Group ●
0.80
97¾ Caterpillar $
497
90
Yield%
2.1
2.2
173¼
501
121.75 -0.12 6.57 0.83
France
3809* -79 5.1
2618½ +18½ 6.5 17.7
-3 2.0
-3
1174½* +15½ 3.6 42.2
1453
2298 Imp Brands
P/E
337⅜
-1 1.1
1279½ 1051 St James Place
5192⅛ 4403⅞ Jardine Mthsn
5643⅝ 3553 Brit Am Tob
Price (p) +/- Yld
175½ Boeing $
425
-2 3.3 14.0
137.34 -0.71 3.09 1.79
Tobaccos -1.42%
52 week
High Low (p) Stock
371⅝
455
418
150.01 -0.83 3.17 1.82
P/E
337⅛ JPM Japanese ●
400 Castings
156.85 146.14 Treas 4¾% 38
Price (p) +/- Yld
329¼ JPM Japan Sm Cos
490
363.52 133.71 Treas 4¼% 36
+¼
52 week
High Low (p) Stock
469
728½ Bodycote ●
34.5
3.7
52 week
High Low (p) Stock
462
1043
—
—
— 6.8
P/E
781½ +3 6.4 -22.8
132.43 123.14 Treas 8% 21
Spread vs
8.6
Price (p) +/- Yld
1911* +17½ 2.5 20.5
1992½ 1692 Prudential
Spread vs
52 week
High Low (p) Stock
-9 5.3
842
Engineering / Industrial +1.31%
Flat Rdm
Price (£) +/- Yield Yield
Price (p) +/- Yld
178
Price (p) +/- Yld
1537
316⅝* +4 3.9
Government securities
52 week
High Low (£) Stock
52 week
High Low (p) Stock
2.2
Data is provided for information purposes only and is
not intended for trading purposes. Speak with a
financial advisor before using any data to make
transactions.
The Daily Telegraph Wednesday 9 May 2018
7
**
Business
Italian impasse sends its stocks sliding
TOM
REES
PORT
MARKET REPORT
Results roundup
Company
Dolphin Cap Investors €
Horizon Discovery Gp
Pre-tax (£)
EPS (p)
DIV (p)
Pay day
XD
Int 295.1m (309.1m)
4.5m (5.5m)
3.61 (4.34)
0.250 (0.250)
Jun 15
May 17
Fin 19.5m (18.1m)
-42.4m (-207.3m)
-4.00 (-22.00)
n/a (n/a)
–
–
Fin – (952k)
-21.1m (-10.1m)
-76.00 (-42.00)
n/a (n/a)
–
–
Fin 36.5m (24.1m)
-14.3m (-12.5m)
-8.40 (-12.10)
n/a (n/a)
–
–
Faron Pharmaceuticals €
A FRESH wave of political uncertainty
in Italy sent its stocks and bonds
sliding after a doomed attempt to
break the country’s political deadlock
in effect fired the starting pistol on a
second election of the year.
President Sergio Mattarella urged
Italy’s parliament to back a “neutral”
caretaker government until the end of
the year after no party seized control
in March’s election. But Italy’s largest
parties, the populist Northern League
and anti-establishment Five-Star
Movement, ruled out supporting the
plans and instead pushed for a new
vote to be held in July.
Renewed political instability and
the probability of an early election
spooked investors with Milan’s
blue-chip index sinking as much as
2.4pc and the 10-year government
bond yield pushing up 10.2 basis
points to its highest level in six weeks.
With the two parties’ support building
since the indecisive vote earlier this
year, markets are nervous that the
League will muster enough support to
break away from its alliance with
right-wing party Forza Italia,
Rabobank said. This would be
particularly troubling for investors
because it would result in the League
Winners and losers (pc)
Turnover (£)
Cambria Automobiles
IDE Group Hldgs
Fin 65.0m (43.4m)
-12.8m (-4.1m)
-5.67 (-1.88)
0.000 (0.000)
–
–
Kosmos Energy $
1Q 127.2m (152.0m)
-74.6m (-6.7m)
-13.00 (-7.00)
n/a (n/a)
–
–
Tower Resources $
Fin – (–)
-1.6m (-23.3m)
-1.07 (-48.59)
n/a (n/a)
–
–
Int 53.6m (47.1m)
5.6m (4.8m)
8.27 (6.58)
1.600 (1.450)
Aug 16
Jul 05
Verona Pharma
1Q – (–)
-16.0m (-2.6m)
-14.50 (-3.70)
n/a (n/a)
–
–
Wey Education
Int 1.7m (1.2m)
-153k (11k)
-0.13 (0.01)
n/a (n/a)
–
–
Treatt
BUSINESS BULLETIN
Ç Electricals
2
Ç Food producers
1.48
Ç Chemicals
1.37
Ç Pharmaceuticals
1.33
Ç Engineering / Industrial
1.31
Ç General financial
1.31
Ç Travel & Leisure
1.21
Ç AIM
1.19
Ç Transport
1.15
È Americans
-0.24
È Europeans
-0.29
www.theice.com/data
and Five-Star Movement holding an
anti-establishment majority.
Risk appetite across markets slipped
back as investors nervously awaited
Donald Trump’s decision on the Iran
nuclear deal. With European markets
closing before the White House’s
announcement, the FTSE 100 inched
down 1.39 points to 7,565.75 despite
the latest flurry of deal making in
London. Elsewhere, B&Q owner
Kingfisher pulled away from a
five-year low after Wall Street analysts
at Morgan Stanley argued that the
FTSE 100 firm’s shares are a snip at
their current valuation.
Although the company’s costcutting “One Kingfisher” strategy
“isn’t working”, there “remains
significant value to be unlocked” in its
£3.5bn of property and nine separable
businesses, the bank’s analyst Geoff
Ruddell told clients to lift the retailing
giant 6.6p higher to 287.8p. On
London’s junior market, Faron
Pharmaceuticals collapsed 620.5p to
104p, a 85pc plunge, after admitting
that its treatment for acute respiratory
distress syndrome had stumbled in a
study. Faron boss Dr Markku Jalkanen
admitted that the Aim-listed company,
which slumped in valuation by almost
£200m yesterday, was “incredibly
disappointed and surprised” by the
results. Consumer goods giant
Unilever climbed 72.5p to £40.54
after starting a share buyback plan.
On emerging markets, the
Argentine peso pulled off record lows
after President Mauricio Macri
revealed that his government was in
talks with the International Monetary
Fund over securing a $30bn credit
line. Argentina raised its interest rates
three times in eight days to 40pc last
week to halt the peso’s slide.
È Media
-0.36
È Gas & Water
-0.39
È Telecommunications
-0.60
È Electricity
-0.84
È Mining
-0.89
È Oil & Gas
-1.07
È Tobaccos
-1.42
Sorrell to ‘start again’
after WPP departure
Centrica chairman to
step down within year
Sir Martin Sorrell has said he is “not
going into voluntary or involuntary
retirement” after having left WPP last
month, but instead was “going to start
again”. The advertising goliath quit
WPP abruptly after more than three
decades in charge, with sources close to
Sir Martin saying he had grown “fed up”
with a probe into alleged misconduct.
He denies allegations of wrongdoing.
The chairman of British Gas parent
Centrica, Rick Haythornthwaite, has
said he will step down from the post
within the next 12 months, having
joined the board in late 2013. Mr
Haythornthwaite said, while chairman,
Centrica had come up against a
“challenging external environment,
including significant fundamental
changes in the energy landscape”.
Lufthansa growth held
back by lacking supply
DPD offers its drivers
new choices on contracts
Lufthansa has said it is struggling to
grow as fast as it would like given
“replacement parts, engines, pilot,
infrastructure are all lacking”. Chief
executive Carsten Spohr said these
barriers meant that ticket prices were
not going to fall as quickly as they
previously had, as many rivals were also
unable to scale up as quickly.
Delivery company DPD has pledged to
pay its drivers at least the real living
wage and to allow them to choose
between being directly employed or
self-employed, in the wake of the death
of one of its self-employed drivers. DPD
said it was setting a “benchmark for
industry” after having launched a
review into contracts earlier this year.
Audi finds further issues
with emission software
Hiscox sees turnaround
after 2017 catastrophes
Audi has discovered “irregularities”
with emission software in some of its A6
and A7 models, with a further 60,000
vehicles set to be recalled. Audi, which
is part of the Volkswagen group, said it
notified authorities itself. It comes just
under three years after the “dieselgate”
scandal came to light. Last year, Audi
recalled more than 800,000 vehicles.
Lloyd’s of London underwriter Hiscox
said gross written premiums lifted
24pc in the first quarter, after the
group was hit in 2017 during what it
called a “historic year for natural
catastrophes”. Hiscox said its London
market and reinsurance businesses
grew strongly and that demand
boomed for flood insurance.
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
+0.12pc
No 1, Poultry, London EC2R 8JR. 020 7415 4130
Ç Brazil
Bovespa
82956.04
+241.62
+0.29pc
Maitland Discretionary Inc
Ç China
Shanghai Composite
3161.50
+24.85
+0.79pc
CAC General
5521.93
-9.49
-0.17pc
DAX
12912.21
-35.93
-0.28pc
Hang Seng
30402.81
+408.55
+1.36pc
Ç Hong Kong
Ç India
S&P CNX500
9419.85
+1.05
+0.01pc
Ç Japan
Nikkei
22508.69
+41.53
+0.18pc
È Russia
RTS
1142.13
-11.72
-1.02pc
Straits Times
3543.17
+10.31
+0.29pc
Ç Spain
Madrid SE
1029.69
+2.31
+0.22pc
È Switzerland
SMI Index
8944.90
-33.75
-0.38pc
Ç USA
Dow Jones
24360.21
+2.89
Ç USA
Nasdaq
7266.90
+1.69
Ç Singapore
Price
Ç Gold
per troy oz
Ç Silver
AXA Investment Managers UK
Limited
7 Newgate Street, London, EC1A 7NX
www.axaframlington.com Cust Svs: 0845 777 5511
+15.20
Biotech Acc
5.50
171.2
+3.70
+0.01pc
Emerg Mkts Acc
5.25
272.9
+3.10
130 Tonbridge Road, Tonbridge, Kent TN11 9DZ
Call free: Private Clients 0800 414161
Broker Dealings 0800 414181
+0.02pc
European Acc
5.25
908.5
+4.10
Unit Trust
Financial Acc
5.25
*683.2
+6.20
Global Opp Acc
5.25
*1458.0
+22.00
Wealthbuilder
Global Opp Inc
5.25
*1286.0
+19.00
Investment Funds (OEIC)
Global Tech
5.25
114.7
+3.50
5.50
*1819.0
+26.00
+0.58
+0.04pc
£12.17
+0.03
+0.24pc
£975.22
+10.30
+1.07pc
Health Acc
Ç New Sovereign
£224.89
+0.85
+0.38pc
Japan Acc
5.25
615.6
Ç Maples
£970.78
+5.86
+0.61pc
Managed Balanced Acc
5.25
395.8
Ç Platinum
per oz
+0.35pc
Mid
Change
Buy on day
Mid
Change
Buy on day
73.71
+0.31
Jupiter Eco Inc
–
*385.37
+4.95
M&G Dividend A Acc
4.00
689.27
+2.47
5.00
177.0000
…
JPM Global Macro Opps A Inc 3.00
73.02
+0.31
Jupiter Emerg Euro Opps
–
203.77
-1.17
M&G Episode Growth A Inc
4.00
*61.26
+0.31
Multi-Mgr Inc&Gwth A Inc
5.25
154.9000
…
JPM Global Uncons Eq A Acc 3.00
1347.0000
+23.0000
Jupiter European
–
2229.26
+9.86
M&G Episode Income A Inc
4.00
*129.65
+0.08
Multi-Mgr Mangd A Acc†
5.00
*281.0000
+1.10
JPM Global Uncons Eq A Inc 3.00
100.0000
+1.6800
Jupiter Euro Inc Acc
–
82.73
+0.16
M&G Episode Income A Acc
4.00
*170.93
+0.11
Multi-Mgr Mangd A Inc†
5.00
*273.8000
+1.00
JPM Japan A Acc
3.00
483.2000
+5.5000
Jupiter Euro Inc Inc
–
56.76
+0.11
M&G Global Dividend A Inc
4.00
*207.51
+4.1
Sterling Bond Acc†
4.25 *220.1100 229.6000
…
JPM Japan A Inc
3.00
116.3000
+1.3000
Jupiter Euro Special Sits
–
424.67
+0.71
M&G Global Dividend A Acc
4.00
*285.04
+5.62
Sterling Bond Inc†
4.25 *64.7100 67.5000
…
JPM Multi-Asset Income A Acc 3.00
*94.9900
+0.3200
Jupiter Fin Opp
–
*632.58
+8.89
M&G Glbl Emrgng Mkts A Inc 4.00
267.99
+2.23
Strategic Bond A Inc
4.00
*122.5000
…
JPM Multi-Asset Income A Inc 3.00
*64.8100
+0.2200
Jupiter Fund Of Inv Trusts
–
*258.45
+1.55
M&G Glbl Emrgng Mkts A Acc 4.00
290.1
+2.42
UK Absolute Return A Acc
5.00
158.5000
+0.10
JPM Multi-Asset Inc A Mth Inc 3.00
64.78
+0.22
Jupiter Global Emg Acc
–
70.62
+0.05
M&G Glbl High Yld Bd A Inc
3.00
*49.88
+0.02
UK Alpha A Acc†
5.25
155.3000
+0.60
JPM Multi-Man Gwth A Acc
3.00
1014.0000
+7.0000
Jupiter Global Eq Inc Acc
–
71.89
+0.65
M&G Glbl High Yld Bd A Acc
3.00
*131.07
+0.05
UK & Irish Small Co A Acc
5.00
678.9000
+3.90
JPM Multi-Man Gwth A Inc
3.00
927.6000
+6.5000
Jupiter Global Eq Inc Inc
–
62.93
+0.56
M&G Global Macro Bd A Inc
3.00
*83.07
+0.14
UK Equity Income A Inc
5.00
*646.8000
+0.30
JPM Natural Res A Acc
3.00
641.5000
+3.5000
Jupiter Global Managed Acc
–
234.57
+2.48
M&G Global Macro Bd A Acc
3.00
*126.3
+0.2
UK Index A Acc
–
638.5000
+3.00
JPM Natural Res A Inc
3.00
44.9600
+0.2500
Jupiter Global Managed Inc
–
225.46
+2.38
M&G Global Themes A Inc
4.00
891.02
3.50
138.6
+1.7
+7.8
UK Tracker A Acc
–
286.7000
+1.30
JPM Sterling Corp Bd A Grs Acc 3.00
*92.6400
-0.1600
Jupiter Growth & Inc
–
*103.13
+0.38
M&G Global Themes A Acc
4.00
1385.13
+12.12
US Growth A Acc
5.00
1039.0000
+24.00
JPM Sterling Corp Bd A Grs Inc 3.00
*55.2900
-0.0900
Jupiter Income
–
585.05
+2.15
M&G Managed Growth A Inc 4.00
*111.04
+1.08
JPM UK Dynamic A Acc
3.00
210.3000
+1.1000
Jupiter India Fd
–
125.29
+1.46
M&G Optimal Income A Inc
3.00
*149.2
-0.13
JPM UK Dynamic A Inc
3.00
165.9000
+0.9000
Jupiter Int Financials
–
99.24
+1.54
M&G Optimal Income A Acc
3.00
*210.84
-0.17
JPM UK Equity Core E Acc
–
*369.5000
+1.9000
Jupiter Japan Inc Fd Acc
–
120.63
+0.70
M&G Property Portfolio A Inc
JPM UK Equity Core E Inc
–
*63.2400
+0.3300
Jupiter Japan Inc Fd Inc
–
94.46
+0.55
M&G Recovery A Inc
4.00
146.33
+1.18
+2.76
Sell
†Available as an ISA
Cash Fd Y
–
100.01
…
+2.30
Cash Fd Y Accum.Units
–
100.37
+0.01
+2.20
Income Funds
Name
Init chge
Sell
Name
Init chge
Sell
117.38
117.38
…
£713.52
-0.22
-0.03pc
Managed Income Inc
5.25
*142.2
+0.10
JPM UK Equity Gwth A Acc
3.00
147.6000
+0.8000
Jupiter Merlin Bal Prtfo Acc
–
185.27
+0.97
M&G Recovery A Acc
4.00
342.3
-3.90
-0.08pc
Managed Income Acc
5.25
*996.0
+0.20
Enhanced Inc Fd
3.50
109.1
+0.5
JPM UK Equity Gwth A Inc
3.00
132.4000
+0.8000
Jupiter Merlin Bal Prtfo Inc
–
129.42
+0.67
M&G Strategic Corp Bd A Inc 3.00
75.3
-0.13
high grade
£15571.83
-29.91
-0.19pc
£1697.00
-9.84
-0.58pc
Monthly Inc Inc
5.25
*260.5
+0.20
Extra Income Fd
3.50
27.54
-0.04
JPM UK Higher Inc A Acc
3.00
1115.0000
+5.0000
Jupiter Merlin Conserv Prtfo Acc–
58.22
-0.09
M&G Strategic Corp Bd A Acc 3.00
116.46
-0.19
special high grade
£2274.74
+14.45
+0.64pc
Monthly Inc Acc
5.25
*633.4
+2.10
Moneybuilder Bal
–
49.69
+0.15
JPM UK Higher Inc A Inc
3.00
580.4000
+2.8000
Jupiter Merlin Conserv Prtfo Inc–
50.35
-0.08
M&G UK Inc Distribution A Inc 4.00
794.06
+1.66
high grade
£1741.75
+15.02
+0.87pc
UK Growth Acc
5.25
310.6
+1.40
Moneybuilder Inc
–
36.47
-0.07
JPM UK Sm Cos A Acc
3.00
501.6000
+2.1000
Jupiter Merlin Grth Prtfo Acc –
410.71
+3.12
M&G UK Inc Distribution A Acc 4.00
7224.49
+15.13
Growth & Income Funds
-0.14
Ç Aluminium
Ç Nickel
£10289.98
+9.20
+0.09pc
1432.00
+48.00
+3.47pc
UK Select Opps R Inc
5.25
*1956.0
+9.00
per tonne
£146.60
+1.20
+0.83pc
UK Select Opps R Acc
5.25
*3589.0
+17.00
Jul settlement
$74.85
-1.32
-1.73pc
UK Smllr Cos Acc
5.25
*312.6
+0.90
Ç Baltic Dry Index*
Ç Wheat
È Brent Crude
*Copyright Baltic Exchange Information Services Ltd.
AXA IM Funds www.axa-im.co.uk
J.P. Morgan Asset Management
60 Victoria Embankment, London, EC4Y 0JP
Clients:0800 204020.Brokerline 0800 727770
JPM America Eq A Acc
3.00
90.8900
+1.8500
JPM UK Sm Cos A Inc
3.00
95.7600
+0.4000
Jupiter Merlin Grth Prtfo Inc –
399.15
+3.03
M&G UK Infl Lkd Corp A Inc
3.00
*114.8
JPM America Eq A Inc
3.00
90.8800
+1.8500
JPM UK Strat Eq Inc A Acc
3.00
*194.9000
+1.3000
Jupiter Merlin Inc Prtfo Acc
–
*299.03
+0.86
M&G UK Infl Lkd Corp A Acc 3.00
*118.43
-0.14
Jupiter Merlin Inc Prtfo Inc
–
*134.36
+0.38
N.A.A.C.I.F. Inc
–
*87.19
+0.83
–
*8669.66
+83.03
Moneybldr Div
3.50
258.3
+1.5
JPM Asia Growth A Acc
3.00
213.1000
+3.9000
JPM UK Strat Eq Inc A Inc
3.00
*114.7000
+0.8000
Moneybldr Gwth
–
80.63
+0.49
JPM Asia Growth A Inc
3.00
117.4000
+2.1000
JPM Uncons Bond A Acc
3.00
*72.0000
+0.0700
Growth Funds
Exchange rates
£ > € Rate 1.1403 Change +0.14¢ £ > $ Rate 1.3518 Change -0.50¢
Tourist £1= Sterling £1=
Australia
Aus $
1.7122
1.8147
1 Euro =
1 Dollar =
1.5914
1.3424
Canada
Can $
1.6675
1.7531
1.5373
1.2968
Denmark
Krone
8.0650
8.4951
7.4497
6.2840
Euro
€
1.0863
1.1403
…
0.8435
HK $
10.1100
10.6113
9.3055
7.8495
India
Rupee
80.2200
90.6906
79.5307
67.0863
Israel
Shekels
Hong Kong
4.4058
4.8762
4.2763
3.6071
Yen
140.7500
147.6694
129.4981
109.2350
Kuwait
Dinar
…
0.4076
0.3574
0.3015
New Zealand
NZ $
1.7988
1.9418
1.7028
1.4364
Japan
Pan Euro HY Bond Inc
5.25
*32.2
-0.02
Pan Euro HY Bond Acc
5.25
*104.8
-0.10
BNY Mellon Fund Managers
Investors: 0800 614330 Brokers: 08085 660000
www.bnymellonim.co.uk,
clientservices@bnymellon.com
Jupiter Merlin WW Prtfo Acc –
294.02
+2.37
N.A.A.C.I.F. Acc
Jupiter Merlin WW Prtfo Inc –
294.01
+2.37
†CAR - Net Income reinvested.
Jupiter Monthly Inc Acc
–
*117.60
+0.16
American
3.50
3792
+60
Jupiter Monthly Inc Inc
–
*31.18
+0.04
Amer Sp Sits
3.50
1521
+24
Jupiter N.American Inc Acc
–
149.66
+2.73
Jupiter N.American Inc Inc
3.50
2283
+9
–
124.70
+2.27
3.50
521.1
+1.3
Jupiter Responsible Inc Fd Acc –
*116.77
+0.18
Balanced Inc
5.00
*328.90
Global Special Sits
3.50
3907
+42
Jupiter Responsible Inc Fd Inc –
*74.08
+0.11
Balanced Acc
5.00
*422.00
…
Japan
3.50
374.2
+3.8
Jupiter Strategic Bond Acc
–
*97.43
…
Equity Income
5.00
*349.80
…
…
Japan Smaller Cos
3.50
326.7
+3.1
Jupiter Strategic Bond Inc
–
*63.99
…
Extra Income
5.00
*108.60
3.50
1971
+29
Jupiter Strategic Res Acc
–
53.51
-0.07
Growth
5.00
*392.70
…
Index UK A Acc
–
109.7700
+0.5200
Jupiter Strategic Res Inc
–
52.09
-0.06
High Yield
5.00
*126.60
…
Intntl Growth
5.00
*499.60
…
Krone
10.4400
11.0086
9.6540
8.1434
3.50
4095
+23
Jupiter UK Growth
–
347.45
+2.82
156.2333
137.0083
115.5700
BNY Mellon Investment Funds (ICVC)
Special Sits
147.7300
Riyal
4.7591
5.0698
4.4459
3.7502
Sterling Income Shares
South East Asia
3.50
1395
+25
Jupiter UK Smaller Cos
–
372.35
-0.21
Boston Co US Opp Fund
0%
123.67
+2.44
UK Select Acc
3.50
299.7
+2.4
Jupiter UK Special Sits Inc
Insight Corporate Bd
0%
92.91
-0.19
Target Funds
Insight Eq Inc Fund
0%
179.27
+0.70
Insight Eq Inc Booster
0%
130.04
+0.36
Target 2020
Insight Glob Abs Ret Inc
0%
110.62
-0.07
†CAR - Net income reinvested
Insight Glob Multi-Strat Fd
0%
*123.70
+0.22
PO BOX 23850, Edinburgh EH7 5FY
Dealing and Admin 0330 123 3822
Insight Inflat-Link Corp Bd
0%
*107.49
-0.08
Glob Income
5.00
158.05
166.57
+0.1
Long-Term Global Equity
0%
256.44
+3.15
Growth Fd
5.00
427.89
452.46
+2.14
South Africa
$
1.6897
1.8127
1.5896
1.3409
Rand
15.9500
17.0722
14.9714
12.6288
Sweden
Krona
11.4500
11.9092
10.4437
8.8095
Switzerland
Franc
1.2963
1.3543
1.1877
1.0018
Thailand
Baht
38.6800
43.1375
37.8293
31.9100
Dirham
4.6772
4.9656
4.3545
3.6732
£
…
…
0.8770
0.7397
UAE
UK
USA
$
1.2961
1.3518
1.1855
…
Tourist rates for indication use only. www.travelex.co.uk
Rates
Inflation
Change on month
Year
+3.3pc
3.50
66.20
+0.19
Newton Asian Income
0%
197.7
+2.09
Fundsmith LLP
Newton Cont European
0%
271.74
+0.56
PO Box 10846, Chelmsford, Essex, CM99 2BW.
0330 123 1815
www.fundsmith.co.uk enquiries@fundsmith.co.uk
Mar 278.30
+0.10
+0.20
+3.4pc
Newton Global Dyn Bd
0%
101.71
…
Mar 278.80
CPI (2015=100 target 2pc)
Mar 105.00
+0.10
+2.5pc
Newton Glb High Yld Bd
0%
59.75
+0.02
Halifax house price index
Apr 715.10
-3.1pc
+2.2pc
Newton Glb Inc Stg Inc
0%
193.76
+1.82
Fundsmith Equity T Acc
–
362.87
+5.48
JPM Div Gth A Net ACC
Newton Glb Opps
0%
286.28
+3.44
Fundsmith Equity T Inc
–
336.9
+5.09
JPM Emg Euro Eq A Acc
0.50pc
Nationwide Base Mortgage Rate
2.50pc
0.47pc
US Fed Funds
7 day
0.49pc
US Long Bonds Yld
3.14pc
1 month
0.51pc
European repo rate
1.25pc
3 months
0.67pc
European base rate
0.00pc
6 months
0.78pc
Overnight
1.50-1.75pc
Major price changes FTSE 100
Risers 69
Volume
Close
Change
Fallers 30
Volume
Close
Change
Ç Shire
13.29m
4034½
4.63pc
È Fresnillo
1.12m
1277
-2.44pc
2.99m
2158
3.40pc
È Brit Amer Tob
4.15m
3809
-2.03pc
10.75m
700¼
3.27pc
È Sainsbury
19.16m
295⅜
-1.96pc
Ç Hargrve Lans
0.81m
1841
2.51pc
È WPP
7.65m
1259½
-1.68pc
Ç Halma
1.20m
1280
2.48pc
È Sky
6.77m
1350
-1.64pc
Ç Croda Intl
0.50m
4575
2.39pc
È BHP Billiton
10.05m
1576¾
-1.54pc
Ç Old Mutual
12.86m
257¼
2.39pc
È Vodafone
78.33m
207½
-1.40pc
Ç Kingfisher
*196.61
+0.41
74.40
+1.77
Jupiter US Sm&Md Cap Ret Acc –
68.64
+1.64
Marks & Spencer Unit Trust
Management Ltd
RPIX (Target 2.5pc)
Bank Rate
–
Jupiter US Sm&Md Inst I Acc –
Liontrust Investment Funds
RPI (1987=100)
Money
Name
Mid
Change
Buy on day
3.00
*261.5000
+1.6000
JPM Uncons Bond A Inc
3.00
192.4000
-0.4000
JPM US Eq Inc £ Hdg A Inc
Init chge
Sell
Name
Kings Meadow, Chester, CH99 9UT
0870 333 1835
Mid
Change
Buy on day
3.00
*56.6200
+0.0500
High Income Inc
–
*111.5
111.5
-0.7
3.00
*115.9000
+1.5000
High Income Acc
–
*256.3
256.3
-1.7
Init chge
Sell
Newton Intnl Bond
0%
234.37
+0.02
JPM Emg Euro Eq A Inc
3.00
42.4900
-0.1000
JPM US Eq Inc A Acc
3.00
*172.7000
+2.9000
UK Select Port Inc
–
354.6
354.6
+0.8
Newton Multi-Asset Bal
0%
196.33
+1.35
JPM Emg Markets A Acc
3.00
226.2000
+3.4000
JPM US Eq Inc A Inc
3.00
*138.9000
+2.3000
UK Selection Port
–
642.7
642.7
+1.4
Newton Mult-Asset Div Ret
0%
155.24
+0.17
JPM Emg Markets A Inc
3.00
96.3400
+1.4500
JPM US Select A Acc
3.00
163.6000
+3.6000
UK 100 Co’s Fund Inc
–
223.6
223.6
+0.8
Newton Mult-Asset Gwth
0%
847.77
+9.22
JPM Emg Mkts Inc A Acc
3.00
*73.6400
+0.3700
JPM US Select A Inc
3.00
161.5000
+3.6000
UK 100 Co’s Fund Acc
–
385.8
385.8
+1.3
Newton Oriental
0%
677.2
+10.38
JPM Emg Mkts Inc A Inc
3.00
*58.2500
+0.3000
JPM US Sm Cos A Acc
3.00
666.1000
+17.2000
W’wide Man Inc
–
507.5
+1
Newton Real Return A
0%
113.4
+0.17
JPM Eur Dyn (ex-UK) £ Hg A Acc3.00
220.1000
+1.0000
JPM US Sm Cos A Inc
3.00
174.5000
+4.6000
W’wide Man Acc
–
814.3
+1.7
Newton UK Equity Fund
0%
882.36
+3.43
JPM Euro Dyn (ex-UK) A Acc 3.00
225.5000
+0.5000
Newton UK Inc
0%
67.83
+0.15
JPM Euro Dyn (ex-UK) A Inc
3.00
101.2000
+0.2000
Newton UK Opps
0%
334.26
+1.45
+21.00
JPM Europe A Acc
3.00
1483.0000
+5.0000
…
JPM Europe A Inc
3.00
82.4200
+0.3100
+0.1000
Carvetian Capital
Management Limited
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
1131.0000
Asian Dividend Income Inc
5.00 *107.8100 113.2600
Cautious Managed A Acc
5.00
*268.9000
+0.60
JPM Euro Smaller Co A Acc
3.00
786.3000
Cautious Managed A Inc
5.00
*153.3000
+0.30
JPM Euro Smaller Co A Inc
3.00
101.8000
…
China Opps A Acc
5.00
1514.0000
+46.00
JPM Global Bd Opps A Grs Acc –
*54.0500
+0.0100
Emerg Mkts Opps A Acc
5.00
207.2000
-0.50
JPM Global Bd Opps A Grs Inc –
*48.8200
+0.0200
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
17.01m
287¾
2.35pc
È BP
60.63m
550⅜
-1.38pc
Ç Mondi
1.92m
1981
2.35pc
È Anglo Amer
5.82m
1729
-1.28pc
FENIX Balanced Fd
5.00
*158.8
+1.1
European Growth A Acc†
5.25
237.8000
+0.50
JPM Global Bond A Gross Acc 3.00
262.0000
-0.3000
Charibond Inc
–
*122.89
Ç IntContl Hotels
1.18m
4774
2.29pc
È Rio Tinto
6.30m
4024
-1.25pc
Generation Fd
5.00
787.0
…
European Sel Opps A Acc
5.00
1666.0000
+6.00
JPM Global Bond A Gross Inc 3.00
203.3000
-0.2000
Jupiter Abslt Rtn
–
54.22
-0.48
Charibond Acc
–
*3969.56
-3.67
Ç Pearson
5.95m
911
1.95pc
È Standard Chart 13.20m
739⅝
-1.12pc
Consistent Unit Trust
Management Co Ltd
Fixed Int Mthly Inc A Inc
4.25 *21.5700 22.5000
…
JPM Global Eq Inc £ Hdg A Acc 3.00
*83.3400
+0.8900
Jupiter Asian Fd
–
921.57
+6.40
Charifund Inc
–
*1618.32
+12.98
Global Care Growth A Inc
4.50
*295.5000
+3.60
JPM Global Eq Inc £ Hdg A Inc 3.00
*55.4100
+0.5900
Jupiter Asian Inc Fd Acc
–
131.78
+1.29
Charifund Acc
–
*25063.06
+201.13
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Client Services 0345 850 8818
Global Equity Inc A Inc†
5.25
61.3500
+0.41
JPM Global Eq Inc Fd A Acc
3.00
*98.6600
+1.1900
Jupiter Asian Inc Fd Inc
–
121.81
+1.19
M&G Corp Bond A Inc
3.00
*40.26
-0.08
Global Growth Acc
4.25 3089.6001 3222.6799
…
JPM Global Eq Inc Fd A Inc
3.00
*79.4700
+0.9600
Jupiter China Acc
–
142.23
+2.61
M&G Corp Bond A Acc
3.00
*69.48
-0.14
Global Strategic Cap Acc†
5.00
241.8000
+1.10
JPM Global HiYld Bd A Grs Acc 3.00
*110.3000
+0.4000
Jupiter China Inc
–
136.66
+2.51
M&G Dividend A Inc
4.00
61.9
+0.22
Ç Scot Mort Inv Tst 3.72m
496¼
1.89pc
È Natl Grid
6.66m
842
-1.06pc
Ç Evraz
2.67m
490⅝
1.87pc
È Royal D Shell B
6.28m
2633
-0.85pc
Ç Unilever
3.56m
4053½
1.82pc
È Randgold Res
0.43m
6006
-0.73pc
Ç Carnival
0.93m
4827
1.54pc
È ITV
19.88m
150¼
-0.66pc
Ç Compass
4.24m
1583½
1.51pc
È Centrica
39.06m
153⅝
-0.65pc
Ç Easyjet
2.24m
1665
1.46pc
È SSE
3.60m
1387
-0.61pc
1.43pc
È Micro Focus Intl 1.99m
1253
-0.56pc
Unit Tst Inc
0%
52.91
53.71
+0.24
Global Technology A Acc
5.00
1758.0000
+49.00
JPM Global HiYld Bd A Grs Inc 3.00
*36.3300
+0.1000
Jupiter Corp Bond Inc
–
56.58
-0.07
Ç TUI AG
2.23m
1753
1.36pc
È HSBC
28.19m
710⅝
-0.53pc
Ç Schroders
0%
136.4
138.6
+0.6
Multi-Mgr Abs Ret A Acc
5.00
*141.4000
-0.10
JPM Global HiYldBdAGrsMthInc3.00
36.34
+0.10
Jupiter Dstrbtn Acc
–
*102.32
+0.02
3390
1.35pc
È BAE Systems
Unit Tst Acc
0.59m
10.35m
610¼
-0.52pc
Ç St James Place
1.52m
1174½
1.34pc
È 3i
2.91m
941¼
-0.40pc
Practical Invest Inc
5.00
239.6
256.8
+1.2
Multi-Mgr Active A Acc†
5.00
*226.6000
+1.20
JPM Global Macro Bal A Acc
3.00
*72.3800
+0.2400
Jupiter Dstrbtn Inc
–
*59.18
+0.01
Ç Smurfit Kappa
0.39m
3088
1.31pc
È Tesco
58.66m
239⅞
-0.33pc
Practical Invest Acc
5.00
1268
1359
+7
Multi-Mgr Distbn A Inc
5.25
135.9000
-0.10
JPM Global Macro Bal A Inc
3.00
*63.4000
+0.2100
Jupiter Dstrbtn & Grth Inc
–
*124.14
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8
Wednesday 9 May 2018 The Daily Telegraph
***
Business
Auto-enrolment boosts workplace pensions
By Anna Isaac
THERE has been a dramatic shift in the
share of employees with workplace
pensions following the introduction of
auto-enrolment schemes.
There also appears to have been little impact on wage growth despite the
pensions costs involved for employers.
Since October 2012, more than 9.5m
employees have been automatically enrolled into pension schemes, with
three-quarters now saving via a workplace pension. Younger workers and
the lowest paid have seen the biggest
increases in the proportion of employees with defined contribution pensions.
Some 63pc of private sector workers
aged 22-29 paid into a defined contribution pension in 2017, up from 16pc in
2012. For workers in fields such as caring and customer service – among the
least well paid private sector jobs –
there has been a similar surge.
In 2012, around 10pc had workplace
pensions. Over five years that had risen
to close to 50pc in 2017. High numbers
of pensions savers are still only making
very small contributions to their pension pots, however. In 2017, close to
half of private sector employers were
paying less than 2pc of earnings into
their workers’ pension pots. That is
compared to a third of the 6pc average
contribution five years earlier.
According to the Office for National
Statistics, this showed that automatic
enrolment had “led to an influx of new
savers at low rates”. Close to half of employees were contributing less than 1pc
of their earnings in 2017. At the start of
the new tax year workers with auto-en-
to 2017, only one in 10 employees had
opted out of their workplace pension.
Overall, the share of people with a
workplace pension was up nearly 25pc
The percentage of workers in the least well since 2012 to 73pc.
Concerns had been raised that the
paid private sector jobs who now have a
increasing costs of auto-enrolment for
workplace pension
employers might lead to smaller pay
rises for workers. However, according
rolment pensions saw their minimum to a Department of Work and Pensions
contributions rise from 1pc to 3pc. In survey, just 11pc of employers had
April 2019, this will rise further, with passed on lower wage rises in order to
employees paying a 5pc minimum con- offset the cost of auto-enrolment.
tribution and employers paying 3pc. Up
This “offers some reasons to think
50pc
that the consequence of April’s rise in
contributions for pay growth may be
modest”, said Martin Beck of Oxford
Economics.
Pay growth picked up “sharply” in
April, according to research from the
Recruitment and Employment Confederation (REC).
On an index where any score above
50 indicates growth, permanent salaries hit 60.5, up from the ten month
low of 60.0 in March. Temporary workers had a score of 59.9, the highest rate
for two years.
Retail sales are
‘falling off a
cliff’ with worst
April on record
By Anna Isaac
Vegging out Asparagus is
cut as the harvesting season
begins at South Brockwells
Farm in East Sussex this
week. The plant is labourintensive to grow, and is
considered by many to be
one of the crowning glories
of the vegetable world with
a distinct, intense flavour.
Its season is short, at just
eight weeks.
CHRISTOPHER PLEDGER
RETAILERS saw their worst performance on record in April, with sales
shrinking by 3.1pc.
This was distorted by the timing of
an early Easter, but it represents the
sharpest decline recorded by the British Retail Consortium (BRC) since it
started its sales monitor in 1995.
Sales of items other than food fell by
4.9pc on a like-for-like basis in the
three months to April, another record
low since this measure was introduced
in January 2013. On a 12-month basis,
the decline was 2.9pc.
Paul Martin, head of retail at KPMG
said: “April’s figures show retail sales
growth falling off a cliff, with sales down
3.1pc on last year, but we must exercise
caution and remember that the timing
of Easter makes meaningful month-onmonth comparisons difficult.
“The three-month average is more
helpful to assess, but this too points to
sales only growing modestly – these are
indeed testing times for retailers,” he
added.
Sunny weather saw some retail
growth in fashion purchases, with
clothing and shoes seeing a slight
boost. Even allowing for seasonal distortions the underlying trend in sales
growth is “downwards”, according to
Helen Dickinson of the BRC.
Online sales growth also receded
slightly, growing by 6.7pc compared to
10.3pc in the same month last year. This
is below the three month average of
7.1pc growth. Internet shopping took a
larger share of the overall retail pie at
22pc in April this year, up from 20.8pc
in the same month in 2017.
The findings come as the Recruitment and Employment Confederation’s report on jobs found that retail
was the only category to record lower
demand for permanent workers.
House prices drop by 3.1pc as number of deals dips to a two-year low
By Sophie Christie
HOUSE prices fell by 3.1pc between
March and April, according to the latest
figures from Halifax, slowing sharply
from the 1.6pc rise the lender’s index
recorded in March.
While the property market has seen
some modest growth over the longer
term – with prices in the last three
months to April 2.2pc higher than in
the same three months a year earlier –
housing demand has softened this year
with the number of mortgage approvals and completed home sales edging
down, the lender said.
The number of completed homes
sales between February and March –
the most recent data available – fell by
7.2pc to 92,270, the lowest level since
May 2016.
North London estate agent Jeremy
Leaf suggested this figure could change
if interest rates remain unchanged, as
first-time buyers could be encouraged
to take advantage of competitive mortgage deals. The Monetary Policy Committee will this week announce the
latest movement in interest rates. Many
had predicted a rise, from the current
Base Rate of 0.75pc, but Governor
Mark Carney recently poured water on
those rumours by suggesting it may
not happen this month. Interest rates
were slashed to 0.5pc in 2009 and
stayed there until 2016, when they
were cut to 0.25pc after the Brexit vote.
That move was reversed in November,
but it means rates are still effectively at
emergency levels.
Halifax’s data also showed that optimism remains at a five-year low. Jonathan Samuels, chief executive of
property lender Octane Capital, said
the quarterly and annual growth rate,
not April’s sharp drop-off, painted a far
more accurate picture of the UK’s property market, which was “a mirror of the
economy – lacking any real momentum
and simply idling along”.
Mike Scott, chief property analyst at
estate agent Yopa, said that if the slowdown continued, 2018 would turn out
to be the least active year for the housing market since 2013.
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