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The Daily Telegraph Business - May 10, 2018

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Business
**
Thursday 10 May 2018
telegraph.co.uk
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Market report page 7. Questor page 6
Gold
Crude
timimg
This is not
the best
moment to
embark on
sanctions
against
Tehran’s oil
Ambrose
EvansPritchard
Nobody’s
underdog
Vodafone
boss
Vittorio
Colao sees
it as a
plucky
contender
in the race
to expand
in Europe
Page 2
Page 3
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Page 7
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Page 7
Cyber attack
warning for
firms as Iran
plots revenge
By Jillian Ambrose, Margi Murphy
and David Millward
IRAN is “likely” to launch cyber attacks
on Western businesses “within
months” in retaliation for the US pulling out of the nuclear deal, security experts have warned.
The businesses at greatest risk are
banks and financial services, critical infrastructure providers and energy
companies along with government departments. These are the same targets
that felt the brunt of Iranian hacking in
2012 and 2014.
Researchers at global cyber security
company Recorded Future issued the
warning after receiving intelligence
from a former Iranian state hacker,
who claimed there were over 50 contractors vying for work on the government-sponsored cyber offensive.
Iran’s cyber programme is known to
have existed since 2009 but it first took
steps against the US in 2012, after president Obama imposed financial sanctions on Iran and removed it from
SWIFT, the money transfer system
used by banks and financial institutions. In response, Iran authorised denial-of-service attacks in an attempt to
crash the computer servers of America’s largest financial services in a campaign called “Operation Ababil”,
knocking their systems offline.
European companies may also have
to cancel billions of dollars in commercial deals because of Donald Trump’s
decision to rip up the nuclear deal and
impose fresh sanctions.
Europe has traditionally had
stronger diplomatic and business ties
with Iran than the US and its compa-
nies were the first to move back in after
the Middle Eastern country rejoined
the world stage in 2016.
Global oil prices have rocketed to
highs not seen since the market crash
over three years ago. Iran exported
nearly two million barrels a day in
March and experts have said that
roughly half of this could be shut down
by sanctions. Supply fears resulted in
the price of crude rising above $77 for
the first time since November 2014.
Shares in oil companies rose yesterday as a result. However, the likes of BP
and Total were also scrambling to draw
up contingency plans to escape the full
force of tough US financial sanctions
which could hurt Iranian-linked investments. French state-owned Total
was the first major energy company to
return to Iran and now stands to lose its
$1bn investment in a huge Iranian gas
field. Total’s plan to develop Iran’s
South Pars Field hangs in the balance
unless a similar waiver to those granted
for the earlier phases of the project
during the Iranian sanctions in the
Nineties can be agreed.
BP is also trying to revive a sanctions
safety net to keep the Rhum North Sea
field, which it jointly owns with the Iranian Oil Company, from closing down
as it works to complete a sale to Serica
Energy. The field provides around 5pc
of the UK’s gas and was forced to close
for almost three years following the
US-EU sanctions against Iran in 2010,
before securing a waiver to allow the
field’s gas flows to restart.
The waiver required a legally complex arrangement to siphon off Iran’s
share of the revenue into an escrow account. However, the deal could face an
eleventh hour delay as the threat of US
sanctions raises concern for the industry regulator the Oil and Gas Authority.
Meanwhile, the aerospace industry’s
two dominant companies – Airbus and
Boeing – look set to lose almost $40bn
Continued on Page 5
By Jamie Johnson
HEATHCLIFF O’MALLEY FOR THE TELEGRAPH
Banks, financial services
firms and government
departments at greatest
risk, say security experts
Liv Garfield
wins business
woman of
the year title
Severn Trent boss Liv Garfield has been named as the winner of this year’s Veuve Clicquot Business Woman Award
Cold snap eats into Greggs sales as boss
laments ‘the customers are not out there’
By Bradley Gerrard and Ayesha Javed
THE boss of Greggs has said the “customers are not out there” after presenting a downbeat view of consumer
confidence and warning the company’s
profits will be flat this year.
Roger Whiteside said that while the
brutal cold snap dubbed the “Beast
from the East” led to a double-digit decline in sales over 10 days in March,
there were more fundamental issues at
work.
“The customers are not out there in
the same numbers they were and what
is causing that is a matter for specula-
Roger Whiteside, the
boss of Greggs, took
investors by surprise
by offering a
downbeat view of
the firm’s trading
tion,” he said. “The weather does not
wholly explain it. The underlying
trends for consumer spending appear
to be under pressure and so we are
more cautious.”
Mr Whiteside said the amount being
spent by those customers who do pass
through its doors is rising thanks to a
greater take-up of its breakfast and
lunch meal deals.
But his repeated caution about trading conditions took investors by surprise and the shares closed down 15pc
at £10.75.
Sales at the company rose 4.7pc for
the first 18 weeks of the year, which
was well below the 7.4pc rate in the
same period in 2017.
Worse still, sales in stores open for
more than a year grew just 1.3pc,
against 3.5pc a year ago.
Ben Marlow: Page 2
Tui losses narrow on cruise demand
By Bradley Gerrard
THE world’s largest holiday
company’s big bet on cruises
is paying off as steep demand
helped to pare losses at tour
operator Tui.
Chief executive Fritz
Joussen has overseen a
multi-billion euro investment in its growing fleet of
ships, which was enlarged
in May last year with the arrival of Mein Schiff 6. The
holiday company’s boss said
it had acquired another
cruise ship in April which
will be operated under its
Marella Cruises brand this
year and a third new cruise
ship would be launched under the Hapag-Lloyd Cruises
brand in 2021.
A further two ships, set for
launch in 2019 and 2023, are
also planned.
In the traditionally quieter six months to the end of
March, earnings in Tui’s
cruises division leapt by
almost a quarter to €92.4m
(£80.9m) which, alongside a
35pc spike in profits in its
holiday experiences division
to €262m, meant pre-tax
losses fell to €247m, from
€311m during the same period the previous year.
“Forecasts for cruising are
excellent,” Mr Joussen said.
“German and European holidaymakers are beginning to
embrace this way to travel.”
Shares in Tui fell 1.5pc to
£17.28 in London.
LIV GARFIELD, the FTSE 100’s youngest female CEO, has won Veuve
Clicquot’s
prestigious
Business
Woman Award.
The 42-year-old chief executive of
water company Severn Trent said that
she supported The Daily Telegraph’s
Women Mean Business campaign to
boost female entrepreneurship in the
UK. Speaking ahead of the event at
Claridge’s last night, Ms Garfield congratulated the campaign, saying: “The
first thing is that we need more footprints. People can only follow in footprints and that means women really
look for role-modelling.
“I was inspired during my career by
amazing winners of awards
such as this and that
visibility. I think finding footprints, celebrating
footprints
and allowing other
people to follow in
them is the first thing,”
she added.
“The second thing that a campaign
like yours can do is shine a light on topics that are sometimes taboo. Whether
that’s menopause, which is a big problem for women in the workplace, or
whether that’s social mobility and
making sure that everybody gets the
chance to thrive and be the best they
can be. I think they are topics that
really play well in the campaign.”
As one of only six female CEOs of a
FTSE 100 company, Ms Garfield said:
“The more that organisations can really go for inclusivity and thrive on
more personalities and more difference, the better they will be.”
Describing herself as a working
mum of two kids, she said: “You have to
love your job to get on with it. I also
want others to love their job so I try to
create an awesome place to work, and a
company that can be trusted.”
Previous winners include Dame Carolyn McCall, the chief executive of ITV,
and Dame Zaha Hadid.
Kathryn Parsons, who made a keynote speech at the awards, said in a Telegraph interview this week: “The best
way to change the culture of business
is for more businesses to be founded
by women.” She added: “What you’re
doing is amazing. I think I would have
benefited from it.”
St Modwen offloads quarter of shopping
centre portfolio amid high street’s woes
By Rhiannon Curry
PROPERTY company St Modwen is to
sell more than a quarter of its shopping
centre portfolio as the British retail
sector continues to struggle.
The company is selling a shopping
park in Longbridge, Birmingham to
Zurich Assurance for £53.6m. The
shops are a central part of a wider £1bn
redevelopment of the area that St Modwen has undertaken over the last few
years.
It has also exchanged contracts to
sell Wembley Central, a shopping centre in north London which includes a
£53.6m
The price St Modwen is due to sell its
shopping park in Longbridge in
Birmingham to Zurich Assurance for
Travelodge hotel, to an unnamed
buyer.
The two properties make up 27pc of
St Modwen’s retail holdings, and Mark
Allan, chief executive, said selling the
assets fitted with a wider intention to
concentrate the business on property
sectors that are likely to produce better
growth, such as warehouses.
It wants to sell £100m-£150m of retail and smaller properties this year, using the money to fund its development
plans, he said.
“We plan to use the capital we release via these sales to bring forward
future phases of Longbridge and accelerate the delivery of our 7.5m sq ft industrial and logistics development
pipeline,” he added.
The company plans to hold the majority of the warehouse portfolio for
the long term. The shares edged down
2p to 412.6p.
2
Thursday 10 May 2018 The Daily Telegraph
***
Business comment
Time to be
afraid: ‘peak
pasty’ may
be upon us
Downbeat forecasts from Greggs
have spooked investors and
suggest the high street’s troubles
might be even deeper than feared
I
t would be a dark moment for modern
Britain but peak sausage roll may finally be
upon us. The rise of Greggs is a story of our
times. Most retailers retreated during the
recession but the Newcastle-based bakery
chain saw austerity Britain as an
opportunity to take its goods to the masses.
It has gone from strength to strength, now
serving 6m customers a week from 1,900 outlets.
In the last four years, its share price has gone
from just over £5 to £12.40. Growth seemed
unstoppable.
Yet a profit warning has put paid to that.
Greggs has served up a cold dish of slowing sales,
and weakening profits for 2018. For the time
being it is blaming the weather, and not entirely
unfairly, it should be said. The “Beast from the
East” left some of its delivery vans struggling to
reach their destinations in late February and
March, and staff unable to make it into work,
particularly in Scotland and parts of Wales.
Even the chain’s £2 breakfast deal and
legendary bacon rolls weren’t enough to prevent
sagging sales. Customers stayed indoors and
some shops had to close.
Still, investors clearly don’t believe that this is
just a weather-related blip. Greggs was the
biggest faller on the FTSE 250 after its shares
plunged as much as 19pc in early trading. Two
things will have spooked the stock market. Talk
of “uncertainties over market footfall” despite an
improvement in sales in May, and management
caution about the months ahead.
No wonder the City is nervous. A Greggs profit
warning represents a fresh low for a high street
under siege. When UK consumers start cutting
back on flaky golden pastry, it is time to batten
down the hatches.
Vodafone’s UK question
It’s been a long time coming – four years in fact
– but Vodafone’s Vittorio Colao has finally
managed to agree a blockbuster tie-up with the
“cable cowboy” John Malone.
It isn’t the mega-merger that was originally
envisaged when the pair
first began their long
courtship but it is still a
bumper deal that reshapes
the landscape.
The £16bn takeover of
cable networks across
Germany and central
Europe belonging to
Malone’s Liberty Global
creates a genuine new force
in European telecoms,
propelling Vodafone into
the premier league of continental broadband
providers. If approved by Brussels regulators,
the acquisition will hand Vodafone networks
covering 54m homes in Germany, the Czech
Republic, Hungary and Romania. Wholesale
deals with other operators will take its total
coverage to a punchy 110m premises.
The takeover is Vodafone’s biggest since its
disastrous £110bn bid for Germany’s
Mannesmann in 2001, and Colao’s boldest move
as he seeks to transform a pure mobile operator
into a major home broadband provider.
And for once this could be good for customers.
It creates a new player capable of standing up to
the likes of Deutsche Telekom and other
dominant incumbent operators, providing
Brussels regulators give the green light.
The missing piece of the puzzle in Colao’s
carefully constructed empire-building is
Vodafone’s home market. The Italian has
rejected suggestions that a deal that moves the
company’s centre of gravity away from the UK
means it will eventually abandon its roots
altogether.
Yet Vodafone continues to struggle in the UK.
It has lost market share and its customer service
record is poor. During a decade in charge, Colao
has deftly navigated some huge challenges with a
series of clever deals.
Fixing the UK could be the toughest yet. Its
tie-up with CityFibre to provide ultra-fast
full-fibre broadband to millions of homes could
be expanded. There is also speculation that
Vodafone will pounce if Sky exits the broadband
market after it is taken over. Whatever the
solution, Colao won’t want to go until the UK
question has been solved.
‘A Greggs
profit
warning
marks a
fresh low for
a high street
under siege’
Stopping the discounters
As Aldi and Lidl vow to remain the cheapest
supermarkets in Britain, rivals will be wondering
if the pair can ever be stopped. Their UK market
share has gone from almost nothing to 12.6pc in
just a few years, and is expected to keep growing
at a phenomenal rate.
Experts predict discount stores will dominate
25pc of the market within 10 years. Sainsbury’s
and Asda are so afraid that they are planning a
£15bn merger.
There is a widely held assumption that Aldi
and Lidl will continue to ferociously gobble up
market share because they have in other parts of
Europe. On their German home turf – the
Continent’s largest market – the duo now
account for a quarter of the market.
Yet, in the Republic of Ireland, the grocery
wars are shaping out in a more conventional way.
There, the fastest growing retailer is Tesco,
which is growing so quickly that its lead over the
discounters is widening.
Aldi and Lidl, meanwhile, look to have hit
maturity, with a just over 20pc combined share,
according to research from HSBC. They are still
growing but at half the rate of Tesco. Perhaps UK
domination will prove harder to come by for
Germany’s discount kings.
Trump’s oil gamble comes at just
the wrong time for world economy
AMBROSE
EVANS-PRITCHARD
TCHARD
D
onald Trump could
hardly have chosen a
more treacherous
economic moment to
tear up the “decaying
and rotten deal” with
Iran. The world crude market is
already tightening very fast.
Joint production curbs by Opec and
Russia have cleared the four-year glut
of oil.
There is no longer an ample safety
buffer against supply shocks. The
geopolitical “premium” on prices has
returned.
The Maduro regime in Venezuela is
entering its last agonies, and the
country’s oil industry is imploding.
North America has run into an
infrastructure crunch. There are not
yet enough pipelines to keep pace
with shale oil output from the Permian
Basin of west Texas, and it is much the
same story in the Alberta tar sands.
The prospect of losing several
hundred thousand barrels a day (b/d)
of Iranian oil exports would not have
mattered much a year ago. It certainly
matters now.
It is the confluence of simmering
political crises in so many places that
has driven Brent crude to $77 a barrel,
up 60pc since last June.
“We believe an oil price shock is
looming as early as 2019 as several
elements combine to form a ‘perfect
storm’,” said Westbeck Capital. It
predicts $100 crude in short order,
with $150 coming into sight as the
world faces a crunch all too
reminiscent of July 2008.
The fund warns that the investment
collapse since 2014 is about to deliver
its sting. Declining fields are not being
replaced.
Output from conventional projects
has until now been rising but will fall
precipitously by 1.5m b/d next year. By
then global spare capacity will be
down to a lethally thin 1pc. US shale
cannot plug the gap.
“The mantra after 2014 of lower for
longer has lulled oil analysts into a
torpor,” it said. Needless to say, a spike
to $150 would precipitate a global
Business
Insight
Imperial
Brands
F
ocusing more
heavily on fewer
brands helped
Imperial Brands suffer a
smaller drop in tobacco
volumes than its rivals.
Tobacco’s decline is all
but an irreversible trend
with consumers
becoming more health
conscious and so-called
“next generation
products” replacing
conventional smokes,
writes Bradley Gerrard.
Imperial’s boss Alison
Cooper took the decision
to mothball roughly a
third of its brands and
focus more aggressively
on pushing fewer larger
names, such as Winston
and Kool.
Ms Cooper said myblu,
the latest iteration of her
HASAN JAMALI/AP
Ben Marlow
rlow
recession. The US might hope to
weather such a traumatic episode now
that it is the world’s biggest oil
producer but it would be fatal for
oil-starved Europe. Such a scenario
would test the unreformed euro to
destruction.
Britain, France and Germany may
earnestly wish to preserve the Iran
deal but they can do little against US
financial hegemony and the ferocity of
“secondary sanctions”.
The US measures cover shipping,
insurance, and the gamut of financial
and logistical support for Iran’s oil
industry.
Any European or Asian company
that falls foul of this will be shut out of
the US capital markets and dollarised
international payments system.
The EU has talked of beefing up the
1996 Blocking Regulation used to
shield European companies from
extraterritorial US sanctions against
Libya.
But this is just bluster. No European
company with operations in the US
would dare flout the US Treasury.
“A choice for corporate Europe
between the US and Iran is
unequivocally going to fall the way of
the US,” said Richard Robinson from
Ashburton Global Energy Fund.
He said Europe will have to slash its
imports from Iran by 60pc because
groups such as ENI or Total will refuse
to ship the oil, whatever the strategic
policy of the EU purports to be. This
dooms the nuclear deal (JCPOA) since
Iran will not abide by the terms if the
EU cannot deliver on its rhetoric, let
alone come through with the $200bn
(£148bn) of foreign investment
coveted by Tehran.
David Fyfe from oil traders Gunvor
said we do not yet have enough details
from Washington to judge how
quickly companies will have to act.
He estimates that sanctions will cut
Iran’s exports by up to 500,000 b/d
later this year. “It could well be much
more in 2019,” he said.
Late last year it was still possible to
view rising oil prices as benign, the
result of a booming world economy.
This year it has turned malign. Global
growth has rolled over. The broad IHS
index of raw materials has been falling
since February.
Europe’s catch-up spurt fizzled out
in the first quarter. Japan’s GDP
probably contracted. The higher oil
price is itself part of the cause.
Even at current levels, it acts as an
extra $500bn “tax” this year for
consumers in Asia, Europe and
America. Not all of the windfall
enjoyed by the petro-powers is
recycled quickly back into global
spending.
One cause of the slowdown is the
credit squeeze in China, which is
ineluctably feeding through into the
real economy with a delay. Proxy
indicators suggest that true growth
has fallen below 5pc.
My own view is that monetary
tightening by the US Federal Reserve
alternative smoking
product, was now in five
markets including the US
and UK and would hit
others soon. Even though
tobacco volumes dropped,
sales were flat at £14.3bn
due to price rises but
pre-tax profits plunged a
quarter partly due to a
£160m charge linked to
distributor Palmer &
Harvey’s administration.
‘Ominously,
we are seeing
the first signs
of a dollar
rally,
tantamount
to a short
squeeze on
emerging
market
debtors’
Share price
38
£
36
Today
£27.80
34
32
High May 2017
30
£37.17
28
26
Low Mar 2018
24
£23.25
Alison Cooper
Chief executive
Ms Cooper also cheered
investors by pledging to
sell various parts of the
business in a bid to raise
roughly £2bn in the next
two years. The stock has
fallen 30pc to less than
£28 in the past year as a
deal clamoured for by
commentators with Japan
Tobacco has failed to
materialise.
An oil crunch might
spark a recession,
but Trump’s actions
could have even
more serious
repercussions in the
Middle East
– and declining stimulus from the
European Central Bank – is doing
more damage than widely presumed.
Higher US interest rates are pushing
up borrowing costs for much of the
world.
Three-month dollar Libor rates used
to price $9 trillion of global contracts
have risen 76 basis points since
January.
The Fed is shrinking its balance
sheet, draining international dollar
liquidity at a quickening pace.
This has already caused a marked
slowdown in the M3 money supply. If
the Fed is not careful, it will tip the US
economy into a stall.
Ominously, we are seeing the first
signs of a dollar rally, tantamount to a
“short squeeze” on Turkey, Argentina
and Indonesia, among other emerging
market debtors.
The combination of a slowing
economy and an oil supply shock is
toxic, even if the “energy intensity” of
world GDP is now half the level of 30
years ago.
Opec and Russia can of course lift
their output cap at any time, though
that alone will not restore the full 1.8m
b/d of original curbs. Venezuela is now
in unstoppable free-fall.
The Saudis have pledged to uphold
the “stability of oil markets” and to
help “mitigate the impact of any
potential supply shortages”. Kuwait
and Abu Dhabi could add a little. Yet
cyclical forces may be moving even
beyond their control.
In the end, there are infinitely
greater matters at stake than barrels of
oil. Trump is throwing US power
behind Saudi Arabia in the epic
Sunni-Shia battle for dominance over
the Middle East, and behind Israel in
its separate battle with Iran.
Both conflicts are on a hair trigger.
Israel attacked an Iranian air base in
Syria last month and killed seven
revolutionary guards.
This is a dangerous escalation from
proxy conflict to direct hostilities. The
JCPOA nuclear deal may be all that
restrains the Iranian side from lashing
out.
Saudi Arabia’s impetuous young
leader Mohammad bin Salman is
itching to settle the score of all scores
with Iran, the Iranian revolutionary
guard are in turn itching to launch a
one-year dash for nuclear weapons,
and Trump is itching for regime
change. What can go wrong?
Imperial Brands’ myblu e-cigarettes are now in five markets
22
2017
2018
Strengths
Threats
 Decision to sell parts of
business welcomed
 New developments in
blu brand should boost
profits
 Able to raise prices to
offset volume declines
 Exposed to ever tighter
regulations
 Price rises force
consumers to cut back on
smoking
 New product roll-out
stutters
Weaknesses
Opportunities
 Faces a much larger
rival after BAT bought
Reynolds American
 Still only trialling
heated tobacco
 Rise in healthy living
threatens cigarettes
 Candidate for a big
merger, such as mooted
Japan Tobacco deal
 More shareholder
returns with non-core
asset sale proceeds
 New products
Our energy revolution needs the Government’s spark
IAN FUNNELL
W
e stand on the point of a
genuine energy revolution.
Electric vehicles, until very
recently the preserve of a small
environmentally minded elite, are now
a feature of public transport for the
first time. The rapid growth and
connection of renewable energy, the
electrification of transport, the
development of technologies which
can carry electricity safely and
efficiently over huge distances, and a
revolution in carbon capture and
storage technology have all converged
to bring this about.
But we need to grasp this
opportunity to really make it work and
to do that we need joined up thinking:
from government and from industry.
For too long in the UK, short-term
decisions have driven long-term
energy strategy. Our energy security
depends on government and industry
working closely together to produce a
sustainable and productive strategy
for the country’s energy needs.
There is a looming energy gap that
will need some creative solutions to
make up the shortfall. And most
commentators agree that we will need
to use a wide variety of different
energy sources in order to plug the
gap. Within the UK, the energy mix
has shifted considerably over recent
years, with a rapid rise in renewable
electricity generation, mostly from
wind, but also with contributions from
solar and even tidal. This has been
mirrored by the continued fall in fossil
fuel generation – helping to drive UK
CO2 emissions down to a level last seen
in 1890.
Significant shifts within the energy
mix will continue, with developments
in transport and heating that are
currently still very much dominated
by fossil fuels. In transport, the UK
lags behind many other parts of the
world: we have electrified a much
smaller proportion of our rail network
and have not supported the update of
electric vehicles as strongly as, for
example, Norway or other parts of
continental Europe.
The speed of adoption of electric
vehicles is dependent on how quickly
we can introduce appropriate
infrastructure for both power and
data. The UK Government needs to
adopt a much stronger policy to make
sure this aim is delivered in a timely
manner. They have plenty of
incentives – adopting these vehicles en
masse would make a significant shift
in the energy mix and lead to further
reductions in carbon emissions. But
the pace of electrification of rail is
unfortunately under threat by a lack of
government confidence in the
programme to electrify key parts of
the national system. Industry needs to
work together with government to try
to get the electrification process back
on track.
Oil and gas will continue to play an
important role in transport, heating
and flexible generation for many
decades to come. The issues are
efficiency and cost. The challenge for
the sector is to maximise the
production efficiency of existing assets
and open up better economic
performance through lower-cost
production. Sub-sea processing,
carbon capture and further energy
efficiency measures for buildings and
transport should help reduce energy
consumption costs, both economic
and environmental.
Hydrogen offers a potentially
attractive alternative for heating,
electricity generation and transport
applications. There do remain hurdles
though, such as the need to generate a
suitable, cost-efficient distribution
infrastructure for hydrogen and the
ability to produce hydrogen through
zero carbon – or carbon captured –
routes.
The Government has been clear that
nuclear power will also play its part in
the energy mix, and are currently
examining the potential for small
‘For too long
in the UK,
short-term
decisions
have driven
long-term
energy
strategy’
modular reactors (SMRs) to work
alongside – rather than replace – the
more traditional nuclear plants. This
could be a real opportunity for the UK
to take the lead in what may become a
global phenomenon, and its potential
cannot be lightly dismissed.
All of these different energy sources
need to be integrated into a coherent
whole if we’re to make sense of them
all and get the most from them.
Luckily, technology can once again
step up to the mark: the rapid
digitalisation of the market can be the
glue that holds the portfolio together,
bringing electricity from any power
plant to any plug and automating
industries from natural resources to
finished products.
So as we find ourselves at the start of
an energy revolution, the roles played
by the oil, gas and electricity
industries will change dramatically.
The common thread for all of us must
be to keep innovating, developing and
introducing new technologies.
And we need government to come
to the party too, creating an
environment that incentivises the
critical industry investment needed to
ensure that the UK is going to not just
survive but thrive in this new era. If
we’re going to keep the lights on, we
need to do just that.
Ian Funnell is the managing director of
ABB UK
The Daily Telegraph Thursday 10 May 2018
Business
V
ittorio Colao, Vodafone’s
chief executive, is a
captain of industry
unembarrassed to claim
underdog status. The
£60bn giant may be
Britain’s ninth biggest listed company
but it is casting itself as a plucky
contender in its €18.4bn (£16.1bn) deal
with Liberty Global to expand its
European empire.
“This transaction puts us ahead of
everybody else as the only true
champion of European competition,”
said Colao as he unveiled a deal four
years in the making that he said will
create “a strong and sustainable
challenger to dominant incumbent
operators”.
Although in some ways the deal
merely underlines Vodafone’s status as
a titan of telecoms, the Italian’s claim
as a challenger is not unwarranted.
At the centre of the deal is Liberty
Global’s German cable network,
Unitymedia. Vodafone aims to add
it to its existing home broadband
and pay-TV operation and increase
coverage from less than a third to
62pc of homes. It will add
coverage in lucrative western
states and cities including
Complementary to Vodafone’s
existing footprint
Liberty Global
Vodafone
Dusseldorf
Cologne
Frankfurt
Mainz
Saarbrücken
Stuttgart
Schwerin
“We are not
saying what we’ll
do with the
proceeds,”
Liberty Global
chief executive
Mike Fries told
investors. “It
will be a while
before we have
that cash.”
It will be some
war chest when
he does get his
hands on
Vodafone’s
money. After
paying off debts,
some time next
year Liberty
Global is due to
bank a cheque
for around
€10.6bn.
Despite a
further
comment from
Fries that “we
have no
transactions in
the queue”, few
on Wall Street
expect the
bonanza to be
returned to
shareholders in
full. Speculation
about its
intentions for
Vodafone’s cash
is sure to focus
on the UK, where
Virgin Media
faces a BT that is
poised to make
an aggressive
move towards
blending
broadband and
mobile packages.
Virgin Media
offers mobile
services too but
does not own its
own network.
The economics
of such
“convergence”
favour
infrastructure
owners.
Those trends
could help
persuade Fries
that a bid for the
mobile operator
O2 would be the
right use of
Vodafone’s cash.
Alternatively,
Liberty could
make a bid for
ITV to give it
more clout for
programming.
Fries is keeping
his options open,
but with or
without him
analysts expect
the Vodafone
deal to trigger
another wave of
mergers.
model represents a serious future challenge to Google’s own online advertising business (which is based on offering
‘free’ services to users in return… for
no compensation or reward),” the court
heard. Mr Justice Roth granted an injunction to protect Tesco Mobile Xtras
and Unlockd until its complaint comes
to court later this summer.
Dresden
Nuremburg
Munich
Ultrafast broadband lines
30.3m
Deutsche
Telekom
24.7m
11m
Liberty
Global
1m
Gigabit
investment
plan
12.7m
Vodafone
SOURCE: VODAFONE
Vodafone shares firm 1pc
yesterday. Analysts at JP Morgan
said the bill was “much better than
feared” for Vodafone.
Liberty Global sank 6pc in late New
York trade, despite achieving a strong
multiple for its prize German asset.
Colao almost entirely resisted
celebration over the price after a long
public dance with Liberty Global’s
controlling shareholder, the billionaire
“Cable Cowboy” John Malone.
“I think it is a fair price for both us
and Liberty,” he said.
Vodafone expects to strip €6bn of
costs as it integrates the Liberty Global
networks and will fund the deal from a
mix of cash reserves and €10bn in new
debt, including €3bn in mandatory
convertible bonds.
They will be switched to stock that
Vodafone will have the right to
repurchase and avoid diluting existing
shareholders.
Cross-selling Vodafone mobile
services to Unitymedia customers and
vice versa will be worth another
€1.5bn in revenue synergies and the
dividend will be maintained, Vodafone
said. For Colao it is the single biggest
step in his decade-long effort to
transform Vodafone from a pure
mobile operator into a leading
provider of home broadband capable
of standing up to the likes of Deutsche
Telekom. It represents a further shift
in the company’s centre of gravity
away from the UK, which will be
dwarfed by its expanded German
operation.
“Clearly the UK is behind,” said
Colao. “It is a smaller operation for us.
I wouldn’t say the UK will be
marginalised because of this. It is
simply in a different phase of
development.”
Colao said a British deal with
Liberty is “not on the agenda”.
Tidal lagoon costs ‘higher
than other energy sources’
the English courts. The start-up
claimed Google had been “fully aware
of the existence and nature” of its business and found it in compliance with
Play Store and advertising policies.
Court documents seen by The Daily
Telegraph accuse Google of acting to
crush a new competitor that offers consumers a financial return in exchange
for viewing advertising online.
“Google is threatening to eliminate a
small and dependent business, Unlockd, whose innovative business
‘Google is threatening to
eliminate a small business
whose model represents a
serious future challenge’
Leipzig
Erfurt
‘I wouldn’t say the UK
will be marginalised. It
is simply in a different
phase of development’
clears,” he said.
That should be a
decision for the
European
Commission rather than
German regulators. The
inclusion in the sale of smaller
cable
cab networks in the Czech
Republic,
Hungary and Romania make
Repu
for a transaction affecting multiple EU
countries.
Vodafone’s ultra-fast cables
coun
will cover 54m homes across the
Liberty Global windfall Firm tight-lipped on where to splash its newfound cash
Magdeburg
continent and wholesale deals with
other infrastructure owners will
take its total broadband coverage to
110m premises.
Colao will be under no illusions
about the extent of Deutsche
Telekom and German
government influence in
Brussels, however.
The price was around €2bn
lower than most analysts were
expecting, which helped
Telecoms titan expands empire
to take on Deutsche Telekom,
reports Christopher Williams
distort
competition. The
two cable networks
exist today and are
not overlapping so if you
put them together you are
not taking away any consumer
choice.”
Mike Fries, Liberty Global’s
guitar-playing, heli-skiing chief
executive, was more blunt still
about the deal’s regulatory
prospects. “There’s no question it
Berlin
SOURCE: VODAFONE
Vodafone
and ‘cable
cowboy’ seal
€18.4bn deal
By Jillian Ambrose
ALAMY LIVE NEWS
A DIGITAL advertising start-up used
by Tesco Mobile customers to reduce
their bills has won a High Court injunction against Google to prevent its technology being banished from hundreds
of millions of smartphones.
Unlockd, an Australian company, alleged that plans by Google to evict it
from the Play Store and cut it off from
an
advertising
clearing
house
amounted to monopoly abuse.
The High Court yesterday granted
an injunction barring action against
Tesco Mobile Xtras, an app that uses
Unlockd’s technology to allow customers to gain discounts on mobile bills.
They opt in to see an advertisement
each time they activate their smartphone to save £2 per month.
Google, which runs the Play Store as
the main way for users of its Android
mobile software to download apps,
warned Unlockd in March that it was in
violation of its rules and would be
banned. Google’s move sent Unlockd
into crisis mode, forcing it to suspend
plans to float on the Sydney Stock Exchange and triggering a complaint in
Hamburg
Hanover
Start-up Unlockd granted
injunction in Google battle
By Christopher Williams
Kiel
Bremen
Vodafone’s Vittorio Colao, and Liberty’s
John Malone (inset below); (above) how
The Sunday Telegraph reported the talks
Düsseldorf, Frankfurt and Stuttgart. In
seeking such a radical expansion,
Colao is mounting a direct challenge
to the former national telecoms
monopoly. He is also indirectly taking
on the German state, which controls
32pc of the operator’s shares.
Tim Hoettges, Deutsche Telekom’s
chief executive, who also sits on the
BT board, began his lobbying
campaign against Vodafone’s plans
months ago. Yesterday morning he
branded the deal “totally
unacceptable” and signalled that he
will target the strong position it will
hand Vodafone in television
distribution. The Liberty Global and
Vodafone cable networks do not
overlap, which undermines any
arguments Hoettges might make
around consumer choice.
In a television interview he instead
warned that Vodafone could
“monopolise” the cable TV market,
which accounts for around 40pc of
German pay-TV. “Is this good for
democracy? Is this good for the media
companies in this society? I question
that,” Hoettges said.
Colao was dismissive. He said that
Vodafone had no ambitions in the
media market and that it is a “best
friend” to broadcasters, streaming
services and anyone else who wants to
distribute programming via its cables.
“It is a little bit amusing that
Hoettges is trying to talk about
‘re-monopolisation’ when in reality he
is trying to keep his own dominance as
a single nationwide player,” said Colao.
“The bad news for him is that now
there will be a second nationwide
player. I find his argument frankly
self-serving. The transaction will not
3
***
Future perfect A new show at the V&A, The Future Starts
Here, explores the impact of more than 100 objects on the
body, the home, politics, cities and the wider planet. It
opens on Saturday and runs until November.
CONCERNS over the costs of a £1.3bn
tidal lagoon project planned for Swansea have resurfaced after its developer
admitted that they remain well above
the price of other energy technologies.
Mark Shorrock, the boss of Tidal
Lagoon Power, told a committee of MPs
that he would need a deal offering
financial support of £89.50 for every
mega-watt of electricity produced in
order to build the ground-breaking
320MW project.
However, under questioning he
admitted that this could only be
achieved with extra financial help from
the Welsh Government, and a contract
almost double the length than what is
typically offered to developers of new
nuclear or renewable energy projects.
On a like-for-like basis the Swansea
tidal project would need a contract
price of £150/MWh.
The sum is well above the price of
the Hinkley Point C nuclear power project which will cost bill payers £92.50
for every megawatt produced over 35
years. It is also almost triple the price of
the newest offshore wind power pro-
jects which will be built for £57.50/
MWh.
Mr Shorrock told MPs that the price
of the project is justified by the fact that
it is a “pathfinder” scheme which could
pioneer a new industry for the UK and
benefit from cost falls, as seen in the
offshore wind sector.
Richard Howard, a researcher from
Aurora Energy who also appeared
An artist’s impression
of how Swansea’s
new tidal lagoon
could look if given
the go-ahead
by officials
before the committee, cast doubt on
whether tidal lagoon power would be
able to follow in the steps of the offshore wind industry.
He pointed out that a major factor in
the heady fall in costs by almost half in
recent years was in large part due to
competition between developers as
they vied for contracts in an auction
setting.
4
Thursday 10 May 2018 The Daily Telegraph
***
Technology Intelligence
What the shopping experience is like at
Amazon when the tech giant goes offline
James Titcomb is
caught on camera
as he checks out
the online retail
group’s till-free
store in Seattle
A
mazon Go, the internet
retail giant’s first-of-akind till-free store in
Seattle, is occupied
mainly by two types of
people: Amazon
employees, and tourists.
The shop sits on the ground floor of
Amazon’s 37-storey headquarters in
Seattle, making it the closest grocery
store in range of its thousands of
employees (a special door between the
store and the office means they need
not even go into the street). Outside, a
small throng of tourists pose for
selfies, probably the only convenience
store in the world where this is the
case. To be fair, there’s more to see
here than the average Tesco Express.
Amazon Go, which opened to the
public in January, is the company’s
first checkout-free store. There are no
queues, no cash, and no unexpected
item in bagging area. Instead, there are
smartphone-controlled gates, and a lot
of cameras.
Entering the store requires
shoppers to download a special app,
which links to your Amazon account
and credit card. Your phone then
generates a code which a tube-style
automatic gate will scan to let you in.
From that moment, every one of your
movements is being tracked by an
array of what seems like hundreds of
cameras attached to the ceiling.
A combination of those cameras and
pressure plates on the store’s shelves
detect when you have picked up an
item, adding it to your virtual
shopping cart. When you put
something back, it deducts it again
(when setting up the app, Amazon
warns you not to pick stuff up for
another shopper, as it would recognise
you as taking it). The shelves stock
typical American supermarket fare:
enormous sandwiches, 900 different
energy drinks and instant mac ‘n’
cheese.
When you’re done grabbing stuff,
you’re done: walk out of the electronic
gates and a few minutes later, a receipt
pops up on your phone.
Nobody checks your bag on the way
out; the only staff in sight were one
attendant monitoring the gates and
another to check IDs around the
people taking alcohol (that, at least,
has not been cracked by technology). I
have never knowingly shoplifted, but I
imagine it would feel something like
this. Tricking the system proved
impossible, and I tried. I picked
cupcakes up and put them down
repeatedly. I carried things around the
store for a few minutes before putting
them back. I grabbed stuff behind my
back. By the end of it, I was starting to
‘I have never knowingly
shoplifted, but I would
imagine it would feel
something very like this’
worry that the technology wouldn’t
work, and that I’d end up with a
gargantuan bill. Luckily, the app
correctly totted up my modest haul: a
bottle of water, an energy bar, a cookie
and a packet of gummy bears.
There is one way to game the
system: when you get a receipt, you
can dispute that you took a certain
item, presumably resulting in a refund.
But one suspects that trying this more
than a couple of times would raise
suspicions. Considering Amazon’s
apparent teething troubles getting the
store to work (it took over a year
between it opening to staff and the
general public), the whole thing was
eerily convenient. The one thing that
struck me about the shop was the
sheer number of cameras above
your head.
You know that statistic about the
average Briton being caught on CCTV
70 times a day? At Amazon Go, you
surpass that in a few seconds. This is
surveillance shopping at its finest.
Will this stop Amazon? None of the
shoppers around me seemed
uncomfortable with being constantly
monitored from all angles. There’s an
argument that we shouldn’t be
worried: we have given away our
shopping data via loyalty cards for
years, after all.
On the other hand, Amazon Go
knows more than what we buy, in
particular what we don’t. If I pick up a
bottle of wine and put it down in a
moment of strength, what are the
chances of wine adverts popping into
my Facebook feed on the way home?
But the ones who should be really
concerned are the rest of the retail
industry, and the people who work in
it. Amazon’s assault on the grocery
market has been slower than many
expected, but last year’s acquisition of
Whole Foods, and reports that it
considered a move for Waitrose,
suggest it is picking up steam.
Expansion plans for Amazon Go are
under way, and last year it
trademarked related slogans in the UK
and Europe.
If the company can eliminate the
majority of staff from stores, it cuts out
one of the biggest costs to
supermarkets, allowing Amazon to
lower prices in a low margin business
that others could not compete with.
Hundreds of cameras, and the
server power required to process their
data, do not come cheap. Surveillance
concerns may put some consumers off.
But I suspect for most people,
convenience would trump privacy.
LILLIAN GIPSON/NASA/COVER IMAGES
Blue sky thinking
A Nasa artist’s
conception of a city
in the future as the
US space agency
partners up with
the ride-hailing
company Uber in
an attempt to make
flying taxis a reality.
The two bodies
signed a second
space act
agreement
yesterday that will
allow Nasa to use
Uber data to create
computer models
as it examines how
airspace could be
managed in such a
future.
Apple software update may be a barrier to police, experts predict
By Margi Murphy
APPLE’S latest iOS update could make
it a lot harder for police and security
services to access files on a suspect’s
phone, a security researcher has
claimed.
The new security feature was spotted in an early beta preview of iOS 11.4,
which is expected to be released in the
next few weeks.
It works by disabling the “lightning”
port, which is used for both charging
and to sync an iPhone to a Mac or PC, if
the phone has not been unlocked for
seven days.
If it arrives, the feature might be a
welcome deterrent for thieves, but will
deal a blow to forensics experts as it
may spell the end of iPhone “cracking”,
a method that has been used by law enforcement to break into phones, according to cyber security experts
Elcomsoft.
Police and forensics officials in the
US are understood to be using a piece
of hardware called GrayKey, which
takes around three to six days to work
‘At what point is it just
trying to one-up things
and at what point is it to
thwart law enforcement?’
out a six-digit passcode. The small grey
box uses lightning cables sticking out
of the front to connect two iPhones at a
time. The device, created by the Israeli
cyber security company Cellebrite, is
reported to cost around $15,000
(£11,000). Any phones with the latest
Toyota chief warns of ‘life-or-death’ battle
with tech firms as its profits surge 36.2pc
By Alan Tovey
TOYOTA’S president has underlined
the danger technology companies present to established carmakers as the
Japanese business reported a jump in
turnover and profits.
Akio Toyoda, president of the automotive giant spelt out the dangers
faced by Toyota and its rivals from the
changing transport market and new
entrants to the field. “Technology companies, who are our new rivals, are
continuing to aggressively invest in
new technologies,” he said.
“The automotive industry is hurtling
into an era of profound transformation,
the likes of which come only once
every 100 years. With even our rivals
and the rules of competition also
changing, a life-or-death battle has begun in a world of unknowns.”
Toyota battles with Germany’s Volkswagen for the title of the world’s biggest car business. The company posted
revenues 6.5pc higher at 23.4 trillion
yen (£16bn) on sales flat at 8.96m vehicles. Profits for the year to end of March
surged 36.2pc to 2.4 trillion yen, largely
driven by the yen’s weakness, which
boosted profits on cars sold abroad,
and cost-cutting measures. It is fore-
8.96m
The number of vehicles Toyota sold last
year, a figure that was flat compared to
the year before, the carmaker said
casting a 15pc profit fall for the coming
year as the yen strengthens. It is slashing costs but increasing investment in
new technologies and fields as well as
forming new alliances.
Toyota, which introduced the first
mass-market hybrid car with its Prius
and is also a strong backer of hydrogen
fuel cells, would not rush to get technological breakthroughs on the road,
Mr Toyoda added.
“What is more important than being
the first to introduce new technologies
to the world is developing technologies
that can most contribute to the realisation of a society of mobility in which all
people can move freely, safely, and enjoyably,” he said.
Last week, fears were raised about
Toyota making further investments in
the UK because of concerns a Brexit
deal would not allow cars to be exported to Europe tariff-free.
Business Secretary Greg Clark said
that a customs partnership deal was
crucial to protect “just-in-time” manufacturing. He raised concerns that foreign firms could locate new factories in
Europe, warning that some 3,500 jobs
at Toyota’s plants in Derbyshire and
North Wales could be under threat.
Toyota shares rose 4pc in response
to the results.
software update may no longer be able
to sync, if they are unlocked, using the
cable, meaning law enforcement will
have just one week to connect a suspect’s phone to GrayKey or cracking
devices to access files.
Apple and law enforcement have
long been locked in a standoff over the
tech giant’s responsibility when it
comes to a citizen’s right to privacy and
assisting the police.
Earlier this year, FBI forensic expert
Stephen Flatley branded the company
“jerks” for making phones that were
too difficult to break into. The Silicon
Valley giant, which has sold billions of
iPhones since their launch in 2007, has
made it increasingly difficult to break
into its devices, claiming that its priority is keeping customers’ data safe.
But government officials say these
measures are getting in the way of justice by blocking potential evidence
from suspected criminals.
“At what point is it just trying to oneup things and at what point is it to
thwart law enforcement?” said Mr Flatley, during the International Confer-
ence on Cyber Security in Manhattan
in January.
The issue became particularly divisive after it emerged that the FBI was
struggling to access the iPhone of the
San Bernardino terrorist, Syed Rizwan
Farook, in 2015. Observers said that Apple aided and abetted a criminal by refusing to create an iOS with a backdoor
to access a phone’s data, while others
felt it was more important to secure the
privacy of the law-abiding majority.
Apple has been contacted for
comment.
DeepMind co-founder leads trio of Britons
on WEF’s list of Young Global Leaders
By Sophie Christie
THE World Economic
omic Forum (WEF)
has announced its latest cohort of
aders, with Mustafa
Young Global Leaders,
o-founder of DeepSuleyman, the co-founder
e Britons joining the
Mind, one of three
ranks of what hass been described as
e private social netthe “most exclusive
”.
work in the world”.
The majority off this year’s group of
100 individuals, all under the age of
ging economies
40, are from emerging
a, Argentina
including Malaysia,
and India, and more than
half are women.
Along with Mr Suleycial intelman, whose artificial
Mind was
ligence lab DeepMind
ogle in
acquired by Google
eported
2014 for a reported
ons in£400m, the Britons
Mustafa Suleyman, the
co-founder of DeepMind
clude human rights campaigner Maya
Foa and Paralympic swimmer Susannah Rodgers, who is now on the board
of the British Athletes Commission.
The group, whose alumni inc de Facebook founder
clu
clude
Mark Zuckerberg and actor
Mark
Leonardo DiCaprio, “repreLeonardo
sent the very best potential
of their generation and are
advancing new models of
sustainable social innovation”, according to the
WEF, which organises the annual
convention
of business
and political
leaders
in
Davos each
January. The candidates must dedicate
part of their time to jointly address
global challenges such as the environment, edu
education and poverty.
Among the most well-known names
201 list are Leo Varadkar, the
on the 2018
Taoiseach of Ireland, Kanika Tekriwal,
exec
chief executive
of JetSetGo, India’s
pri
largest private
jet company often nick“th Uber of air travel”, and Sanamed “the
Su
rah Al Suhaimi,
the first woman to
Saud Arabia’s stock exchange,
chair Saudi
Ya
Huiyan Yang,
China’s richest woman,
actres Priyanka Chopra.
and actress
fo
The former
Arsenal midfielder
P
Mathieu Pierre
Flamini is included for
enviro
his environmental
work through his
G
company GFBiochemicals,
which prolevu
duces levulinic
acid, a substance that
could be aan alternative to petrol.
Many of the individuals are involved
in charitable
charitab initiatives, like American
philanthro
philanthropist Alexander Soros, son of
billionaire George Soros. He heads up
the Alexan
Alexander Soros Foundation which
promotes civil
c
rights and social justice.
The Daily Telegraph Thursday 10 May 2018
***
5
Business
Eurozone struggles may delay plans to raise rates and rein in QE
By Tim Wallace
FRENCH manufacturers are struggling
to grow as hopes of a boom have turned
into modest disappointment.
Manufacturing output is stagnating,
growing by 0.1pc on the month in
March after four consecutive months
of decline. Industrial production –
which covers manufacturing as well as
sectors such as utilities and mining –
contracted by 0.4pc in the month.
Economists had anticipated a rise of
at the same time, with the ECB uncertain about the origins of this trend, any
perceived equivocation over policy
does little to bolster confidence,” said
Neil Mellor at BNY Mellon.
“The bottom line is that there are
justifiable doubts as to whether quantitative easing (QE) can be repealed in
September as planned.”
The ECB is currently buying €30bn
(£26bn) of bonds – predominantly government debts – every month under
the scheme. QE began in the eurozone
0.4pc. Italian retail sales also dipped by
0.2pc by value in the month to March
and 0.3pc in the first quarter as a whole,
though the annual increase of 2.9pc
was more sturdy.
The numbers add to worries that the
European economy is performing less
strongly than hoped. As a result the European Central Bank may delay plans
to rein in some of its crisis-era economic stimulus.
“A weaker run of eurozone data
comes after a stellar fourth quarter; but
in 2015. At the end of April the ECB
held €2.7 trillion-worth of assets purchased under the scheme
Any rises in interest rates may also
take longer to appear. “Less buoyant
eurozone activity data and continued
weak inflation have reinforced the expectation that it may be some time before the ECB hikes rates,” said Jane
Foley at Rabobank.
“There may be no ECB rate hike before September 2019 at the earliest.”
The longer-term outlook may also be
less positive than previously hoped. After a strong start to his labour reforms,
French President Macron could struggle to shake up the jobs market and
benefits system to the same extent as
Germany achieved in the early 2000s,
HSBC analysts believe.
Known as the Hartz reforms, cuts to
benefits and improved incentives to
seek work are credited with revolutionising Germany’s long-term economic prospects.
But economist Simon Wells warns
The ‘unreliable
boyfriend’
strikes again
B
orrowers are set to dodge a
bullet today. After months
of planning for an interest
rate rise – the first to take
British monetary policy
away from emergency
levels – the Bank of England has pulled
a handbrake turn in recent weeks.
Rates are expected to stay flat at
0.5pc at today’s Monetary Policy
Committee (MPC) meeting.
The reasons shine a light on the
intense uncertainty over the outlook
for the UK economy, as well as the
bafflement economists feel at the
unusual combination of very low
unemployment, weak wage growth
and sluggish underlying inflation.
Mark Carney, the Bank’s Governor,
has a tough task on his hands
explaining his latest thoughts on that
puzzle. He must also carefully guide
markets, households and businesses
on the likely path of interest rates if he
wants to avoid surprising the country.
Why are rates not going up?
A month ago, a rate rise was deemed to
be almost a certainty. The economy
had picked up pace, unemployment
was at record lows and the UK looked
set to follow the US in raising rates.
But that all changed with an
interview Carney gave in which he
warned that “mixed data” on the
economy would affect the policy
decision. Instead of allowing markets
to continue to expect a May rate rise,
he dodged giving a precise answer,
and steered the conversation away
from today’s meeting.
“I don’t want to get too focused on
the precise timing, it is more about the
general path,” he said, adding he was
“conscious that there are other
meetings over the course of this year”.
His warning was well-timed. Since
then it has emerged the economy grew
far slower than expected in the first
quarter of the year – far slower than
the Bank would usually deem merits a
rate rise. If the economy is weak, the
Bank does not want to cause any
further trouble by raising rates.
What does it mean?
For borrowers, this is a reprieve.
Home buyers can enjoy record low
rates. Those on variable mortgages
will dodge an increase in repayments.
Business groups will cheer too.
They have warned any rate increases
will be bad at a time of caution over
the economic outlook, as it would
push up the cost of borrowing to
invest.
But it is less important for those
using credit cards or consumer loans
– those have interest rates which are
well above the base rate and so little
affected by the Bank of England’s
pricing. Savers might curse the Bank,
as they suffer often on below-inflation
the Bank to raise rates is the idea that
there is little spare capacity in the UK
economy – that GDP can only grow
slowly without reaching the limits of
the country’s productive capabilities,
and any more than this will cause
inflation to pick up.
Assuming the Bank has not radically
changed its forecast, the UK should
butt up against that limit soon,
requiring modestly higher interest
rates even for unimpressive growth
rates.
However, inflation is currently on
the way down, and economists believe
it might fall back to the Bank’s 2pc
target by the end of the year. It will be
tricky to argue in favour of higher
rates at that point.
Officially the MPC targets inflation
in the medium term – around two
years in the future. On February’s
Carney has been accused of
being an ‘unreliable
boyfriend’. This will not
help him to shake that label
BLOOMBERG
Last month markets
were sure that rates
would rise today.
Then they listened
to Mark Carney.
Tim Wallace reports
Expectations of a rate hike have plunged
Probability of hike
Probability of no change (0.5)
tober 2016 to upgrade Iran’s rail
network. Companies with commercial
deals in Iran have either 90 or 180 days
to wind down their activities depending on the sector. It is possible that certain waivers can be negotiated. But so
far the US has not provided any information on which goods might qualify.
Donald Trump with
the memorandum
reintroducing
sanctions on Iran
Dr Matthew Kroenig, a former CIA
and Department of Defence official,
said the US government has sent a clear
signal to international companies. “European governments have said they
will uphold the [nuclear] deal but their
businesses aren’t going to be able to do
business with Iran so they’re going to
have very little choice but to get on
London house prices fall at
fastest pace for nine years
By Anna Isaac
HOUSE prices in April were falling at
their fastest rate since February 2009
in London, amid expectations that the
rest of the UK housing market will hold
steady in the next year, an industry survey has found.
Across the UK, the most expensive
homes were seeing the highest level of
below-asking sales prices. Some 69pc
of respondents reported that houses
with a price tag of over £1m were being
sold for less than hoped. This was a rise
from the 66pc reported in January this
year and follows a range of data suggesting that cracks may be appearing
in the housing market.
Signs of a softer market were spreading to lower priced properties too.
There was a sharp rise from 56pc in
January, to 74pc in April, in sales prices
coming in lower for houses listed between £1m and £500,000.
By contrast, the cheaper end of the
market was holding firm. Properties on
offer for £500,000 or less were either
selling at their advertised level or
above, according to 59pc of respondents. Different regions were seeing
contrasting rates of house price inflation. Drops in prices were reported in
the South East and South West, for the
first time since May 2013. Wales, Northern Ireland and Scotland saw rises,
however.
Aside from London, almost all parts
of the UK are expected to see higher
prices in a year’s time. The amount of
activity in the housing market seemed
69pc
The proportion of respondents to the
survey with houses worth more than
£1m that sold for less than hoped
to show signs of stabilising after four
months of decline. New buyer inquiries were largely unchanged in April.
However, the number of instructions
to sell properties continued to fall.
Simon Rubinsohn of the Royal Institution of Chartered Surveyors, which
oversaw the research, said that, allowing for seasonal variation, the “underlying trend remains broadly flat”.
Probability of cut
100
80
returns. The impact on the Bank’s
reputation is also one to watch. Carney
has been accused of being an
“unreliable boyfriend” in the past for
changing expectations on rate rises.
This latest change will not help him to
shake that label.
60
When might rates rise next?
40
20
SOURCE: BLOOMBERG
0
May
2017
Dec Jan
Airbus and Rolls-Royce may be
hard hit by US move over Iran
Continued from Page 1
of orders between them. The Iran deal
with the Obama administration paved
the way for the country’s airlines to renew their ageing aviation fleet. The imposition of sanctions means that the
licences for the deal will be revoked.
Airbus looks to be hardest hit, with it
losing sales of 98 jets to Iran. Of these
only three have been delivered. Boeing
has 80 aircraft at stake.
Rolls-Royce was a beneficiary of the
Airbus deal as it was due to provide the
Trent XWB engines for 16 Airbus A350s
and Trent 7000 engines for 38 Airbus
A330s.
Other European companies to have
made a push into Iran since 2016 include VW, which started exporting
cars to Iran last year; Peugeot owner
Groupe PSA; and Renault. Peugeot is
understood to have signed production
deals worth €700m and Renault has
ramped up its investment in the country in order to produce around 350,000
cars a year. Siemens, the German engineering company, signed a deal in Oc-
the signals in France are less promising. “Mr Macron’s agenda contains
many of the elements of the Hartz reforms, such as moves to cut firms’ dismissal costs and a toughening of
unemployment benefit rules,” he said.
“But he is unlikely to benefit from
such a favourable environment. Global
growth is not as strong as it was in the
mid-2000s. After a decade of weak
wage growth, French workers may be
unwilling to accept sluggish income
growth.”
board,” he said. “The Trump administration has a grace period to give foreign companies time to wind down
their business but yes after that point
they will be subject to sanctions.”
Ambassador Robert Joseph, a former
member of the National Security Council, said: “The imposition of sanctions is
immediate in the sense that no new
contracts in these commercial periods
will be permitted. There will be a winddown period depending on the specific
contract.”
While European countries may be
happy for their companies to continue
doing business with Iran, the size of the
US market and America’s control of the
mostly dollar-denominated global financial system mean that companies
with global operations cannot afford to
anger it.
Some European politicians have
raised the prospect of using a “blocking regulation” to counteract US sanctions. However, trade experts have
warned that this would be largely symbolic and may have little practical use.
UK trade defences
may not be in place
by Brexit, warn MPs
By Anna Isaac
THE UK may not have the trade
defences it needs in place ahead of the
Brexit deadline in March next year,
MPs have warned.
Members of the Commons’ International Trade Committee (ITC) have
called for action from the Government
to ensure that the Trade Remedies
Authority (TRA) will be ready in time.
Post-Brexit, UK companies and producers will no longer be protected by
the European Commission’s trade
defence regulations.
Under World Trade Organisation
rules, countries must have an appeals
process in place. This allows a country
to challenge any steps, known as trade
defence measures, taken by another
country against its goods.
Trade experts said: “red”, “amber”,
“red”, when asked by MPs on the select
committee to offer a traffic light assessment of readiness for the UK’s trade
protection body, once it leaves the EU.
Angus MacNeil, chairman of the ITC,
said: “If you don’t have a TRA you won’t
last beyond the first battle in a trade
war.”
2018
May
The Governor is expected to stick with
his pledge that any rise in rates will be
“limited and gradual”, and that we
should expect a couple of rises in the
next couple of years. The timing is
trickier, however. One factor pushing
Mark Carney has a
tough task guiding
the expectations of
markets and
households amid
uncertainty over
the outlook for the
UK’s economy
forecasts, the most recent set, the
Bank thought inflation would fall to
2.1pc in three years’ time even with
several rate rises.
But now inflation has fallen back
unexpectedly quickly, it may have to
move those forecasts down, again
reducing the urgency of hiking.
John Wraith at UBS said this “could
make the MPC’s message harder to
communicate”.
“We expect the MPC to predict an
earlier, more rapid return of CPI
towards target, but to anticipate
stronger domestic inflation pressures
putting renewed upward pressure on
the rate at the two to three-year
forecast horizon,” he said.
Carney does not have to be bound
by his previous comments – he has
proven that by rowing back from
earlier expectations of a May hike.
The current position has left
markets a little confused, however, so
economists and traders will be looking
for any firmer guidance on the path of
policy.
Most economists surveyed by
Reuters expect a rate rise in August.
Bloomberg’s consensus indicates a
roughly even chance of a hike in
August or September.
6
Thursday 10 May 2018 The Daily Telegraph
***
Business
Keep buying BlackRock
Smallers: it has now beaten
the index for 15 straight years
BlackRock Smaller Companies
 Market value:
£684.7m
 Year of listing:
1906 (as the
North British
Canadian
Investment
Company)
 Discount:
11.2pc
 Ave discount
over past year:
12pc
 Yield: 1.8pc
 Most recent
year’s dividend:
26p
 Gearing: 9.9pc
 Annual charge
(2018): 0.67pc
14
13
12
11
10
Questor
Trust Bargains
Richard Evans
The BlackRock
Smaller Companies
trust has an ‘almost
unparalleled’ record
of outperformance
over a 15-year period
IN JUNE last year we tipped the
share grew by 22.8pc with dividends
BlackRock Smaller Companies
reinvested, comfortably ahead of the
trust, partly on the basis of its
11.1pc gain of the benchmark, a smaller
excellent record of beating the index
companies index compiled by Numis,
against which it measures its
the broker. Our tip has produced
performance. We pointed
a 20pc rise for readers in
BlackRock
out that the trust’s returns
capital terms.
Smaller Companies
had exceeded those of its
Longer-term
benchmark index for the
performance is even more
Buy
previous 14 years, which
impressive: the trust’s
Experienced
one team of analysts
NAV total return has
management
team
called “a truly remarkable
grown by 19pc a year for
and excellent
achievement”.
15 years, against 10.8pc a
long-term returns
The portfolio has
year for the benchmark.
now outperformed for
“The power of
another year, prompting those
compounding results in a 15-year
analysts, from the indefatigable
NAV total return of 1,255pc against
investment trust team at Canaccord
364pc and 283pc for the benchmark
Genuity, to admit to “running out of
and FTSE All Share respectively,” the
superlatives” about it.
broker added.
“The company has now
Canaccord also pointed out that
outperformed its benchmark
BlackRock Smallers had the best
for 15 consecutive years. This
risk-adjusted returns, as measured by
is an almost unparalleled
the “information ratio”, of any equity
achievement,” they said.
investment company over 10 years.
In the last financial
It highlighted the experience of the
year, the trust’s net
fund manager’s UK small and midasset value (NAV) per
cap team, saying “the considerable
co-manager when she returns from
maternity leave in September.
Ian Barrass, co-manager of
Henderson Alternative Strategies, is
to retire through ill health. James de
Bunsen, co-manager since 2014, will
continue in his role and Peter Webster
will replace Barrass.
The board of Ranger Direct Lending
has proposed the appointment of a
new management firm, Ares, and has
served 12 months’ notice on the existing
manager. However, some shareholders
oppose the new appointment and
Numis said it expected the vote on the
matter to be “close”.
Aberdeen New Thai has announced
a number of changes designed to
improve performance. It will increase
exposure to smaller stocks, allow
limited investments in unquoted
firms about to list, charge more costs
to capital rather than income, pay an
interim dividend, starting in the third
quarter, cut the annual management
fee to 0.9pc from 1pc, and make more
proactive use of “gearing” (borrowing).
Lazard World Trust Fund has
changed its dividend policy. It will
now pay a total of 6pc of its NAV at the
start of the financial year in quarterly
instalments. Previously it paid a total of
3.5pc in two instalments.
Numis estimated this year’s
quarterly payment at 5.7675p, with the
first instalment due in August. That
would make the yield 6.2pc at the
current share price.
A dividend of 6.4925p under the old
policy will be paid on June 8.
Key
numbers
Close: £14.30
15
£
9
8
7
6
2013
2014
2015
2016
resources of BlackRock, including the
risk team, and its network of contacts
are a competitive advantage with
which to exploit inefficiencies in an
under-researched part of the market”.
The portfolio is highly diversified,
with about 170 holdings.
The trust recently gained a new
co-manager, Roland Arnold, to work
alongside Mike Prentis. It has also
scrapped its performance fee.
The discount has narrowed slightly
over the past year to 11.2pc, compared
with 13.5pc at the time of our tip.
Questor says: buy
Ticker: BRSC
Share price at close: £14.30
2017
2018
Investment trust news
Tetragon Financial, tipped here in
October last year, has introduced a
sterling quotation for its London-listed
shares. The new shares trade under
the ticker symbol TFGS. Dividends will
continue to be declared in US dollars
but the company intends to make
future dividends available in sterling
for shareholders who request it.
Colin Hughes, co-manager of
Henderson Opportunities, tipped
here in March 2017, is to retire. James
Henderson continues as the lead
manager, assisted by Laura Foll and
Charlotte Greville. Foll will become
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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1555 +15 3.2 1652
1746
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1299½* +22½ 2.3 23.2
654⅜
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646¼ +4¾ 2.5
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2145
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680 Alliance Trust ●
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780
311
270 Majedie
289
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329
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88
243
— 1.7
244
337⅝
186⅛ Hochschild Mng ●
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318¾
266 Town Centre
296
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1782 +19 5.7
8.6
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81⅝ JP Morgan Ch $
112¾ +1¾ 2.0
3.2
375.00 353.40 Treas 4⅛% IL 30 357.37 -1.03 2.36 0.00
1697
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151⅜
139⅜ Tritax Big Box ●
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141
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729½ GVC Hldgs ●
872½ -2½ 3.4 -76.9
148⅜
121¼ Johnson&John $
123⅛ +½ 2.7
0.1
274.84 263.31 Treas 2% IL 35 263.08 -0.98 1.19 0.00
565
846½* +8½ 2.7
10-year Government Bonds
Spread vs
Spread vs
Bunds
T-Bonds
Yield%
France
0.79
+0.23
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1684 Mondi
677
59 Severfield
78½
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1370
950 Allianz Tech Trust
1370 +15 — 1349
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1354 Smiths Gp
1655
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927
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882
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1885 Mercantile InvTr ● 2195* +20 2.4 2397
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650 Biotech Growth
700
—
742
522
450 Merchants Tst
522* +12 4.8
543
351¾
205 Kenmare Res
240
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—
18.1
848½
618 Unite ●
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81¾ +2⅝ 4.9
86
826½
654½ Monks ●
811
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786
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49⅞
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325
237 Urban&Civic
5090 Spirax ●
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393
311 BlackRck Emer Euro 341½ +½ 3.2
359
825
710 Murray Income
786 +10 4.5
854
1074
577¾ Polymetal ●
732⅜ +10⅜ 4.4 12.1
871 Vitec
1230* — 2.5 20.0
169½
144 BlckRock FroInv
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156
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1127 Murray Intl ●
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8255
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1696 Weir ●
2256* +26 2.0
346
305⅝ BlckRck Grt Euro
332½* +1½ 1.6
353
77
61½ Northern 2 VCT
63
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66
4226½ 2931½ Rio Tinto
4127 +103 5.2 11.4
214
185 BlckRck Inc&Grth Inv 199
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212
102
88½ Northern 3 VCT
89½
— 11.7
95
981¾
742
Oil & Gas +3.51%
6155
1320
2326
3.1
Food producers +0.68%
163
–
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501½
400½ BlackRock Latin
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523
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67
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70
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3387
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2741 +7 1.5 18.1
171
144 BlckRck NrthAmerInc 162 +2¾ 4.9
168
268
234 Pacific Assets
259
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269
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1.46
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154
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1446¼ 1155 BlackRock Small
1430 +25 1.8 1587
2000
1720 Pantheon ●
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2711
2159 Coca-Cola HBC
2466
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536
416¼ BlkRk Throg Tst
530
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586
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329½ Perpetual Inc & Gr ● 370 +4½ 3.7
395 +5½ 3.9
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446
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555½ Edin Worldwide
816 +12 —
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136
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122
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340
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276⅛ +2⅞ —
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649⅜
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574
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387⅛ Santander
474⅜ +3¼ 3.3 13.7
158⅜
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139¼ +3¼ —
2000* -20 4.0 18.6
620
430 Liontrust
41 Lon. Fin. & Inv.
2454¾ 1485¼ Secure Trust Bk
408¼
352 Fidelity Asian V
401 +2½ 1.2
411
263
191⅛ Fidlty Chna Sp Sits ● 247½ +½ 1.0
286
235
199¾ Fidelity Euro V ●
220* +1½ 2.0
160
108 Fidelity Japan V
157
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274
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272
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570
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678
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345
250¼ Virgin Money ●
332* -11¼ 1.8
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4402* +51 1.2 30.1
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305 F&C Cap & Inc
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337
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148⅝ Man Group ●
190⅛* +1¾ 4.2 16.7
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133⅞ F&C ComProp ●
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142
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2.8
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204
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2735½ 2234 Diageo
2659½ -1 2.4 25.1
556
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2436* +46 2.5 26.3
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2790
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94½ F&C UKHighIncTst
101
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4691
3612 Croda
4597* +22 1.8 25.4
3511
2681 Johnson Mat
3407 +66 2.2 16.9
2772
1826 Victrex ●
2742 +26 2.0 23.6
115 Alumasc
311¾
252½ Balfour Beatty ●
705½
6¼ Barratt Dev
74 Breedon Group
419½ Costain
648½
429¾ Crest Nicholson ●
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High Low (p) Stock
41680
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Price (p) +/- Yld
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133
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274⅝ -4¾ 1.8 18.2
97⅞
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96
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414⅛
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210¾
151¾ Rockwell $
177
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0.9
199⅝ +6⅝ 7.1 45.3
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224¾
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571⅞ Dairy Farm
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349⅝
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270
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260
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1400¼ 1024⅞ Greggs ●
1075* -192 3.0 19.0
386¾
374¾
305⅜ Halfords ●
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596¾
282 Howden Joinery ●
513⅝ -6⅜ 2.2 17.2
369¾
277¼ Kingfisher
288¼* +½ 3.8 13.0
131½
78½ Lookers
100⅜* -⅝ 3.9
397¾
262 Marks & Spen
293¼ +1¾ 6.4 40.7
254⅜
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245⅜ -1¾ 2.5 18.5
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19⅝
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5246 +68 4.7 12.6
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559⅜ -2⅝ —
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424⅜
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408⅞ +1⅝ —
242¾
165⅜ Tesco
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844
376½ Hunting ●
100½ +5¼ —
383⅛
289¼ Schroder Asian TR
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670 Playtech ●
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312⅝ -1¼ 5.6 19.0
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135⅜
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1192 Travis P ●
1324⅜ 1010 Young & Co - N/V 1220 — 1.6 22.1
The Alternative Investment Market is for young and growing
companies. Shares may carry higher risks than those with a full
quotation, and may be difficult to sell.
1304½* -3 3.5 14.0
1286 Young & Co - A
1575 -15 1.2 25.6
983½
722 Big Yellow Gp ●
977 +13 3.0
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1709
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589 Brit Land
684¾ +4⅜ 4.4
—
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day’s close see www.Morningstar.co.uk.
256⅜
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118
326⅛
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865
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Price +/- GrsYd Cvr
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Americans +0.68%
52 week
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2184
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52 week
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—
—
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—
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55
1265
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830
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128 Volkswagen €
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2840
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5722
416
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1922½ +45 2.2 44.8
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588½
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2580
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97
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8110⅜ 4973⅜ Reckitt Benck
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109
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4270
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3417 +27 3.3 15.9
7.5
138
3805
354
3069 Schroders
546
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349⅛
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189⅞
3784
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203
320
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246
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399⅜
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409
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156
201
1671
62¼ Lloyds Bk Gp
—
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798⅝
73⅝
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205½
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824
2488 Caledonia ●
162 Chemring
220⅛
+4 1.6
796
Gas & Water +0.90%
213
660 British Empire Trust ● 735
3020
533½ BAE Systems
Banks +1.13%
-6.4
223
601⅜ +3⅜ 4.7 10.9
219
-3.6
—
—
4093½* +40 3.1 21.7
682½
—
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910
4557½ 3678½ Unilever
Price (p) +/- Yld
34
83
0.56
52 week
High Low (p) Stock
Hummingbird
540¼ +¾ 2.9 24.4
2053 Smurfit Kappa
Germany
Aerospace & defence -0.25%
⅜
3092* +4 2.5 20.0
3254
Japan
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.
40
-7 2.5 21.4
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.
98
The Daily Telegraph Thursday 10 May 2018
7
**
Business
Burberry slumps as Frere dumps stake
TOM
REES
PORT
MARKET REPORT
Results roundup
Company
Compass Group
Int – (–)
421k (50k)
715k (561k)
Int 11.4bn (11.5bn)
792.0m (831.0m)
Fin 5.9m (6.3m)
-2.1m (-2.5m)
Int 14.3bn (14.3bn)
600.0m (804.0m)
Fin 874k (711k)
-11.3m (-7.3m)
Int 296k (581k)
Deltex Medical Group
Imperial Brands
Pre-tax (£)
Int 336k (284k)
Cardiff Property
BURBERRY slumped to the bottom of
the FTSE 100 after revered activist
investor Albert Frère dumped his
entire 6.6pc stake in the fashion house.
The Belgian billionaire known for
shaking up companies ditched his
shares just 15 months after first
disclosing his stake, unnerving
investors still unconvinced by
Burberry’s transformation plan.
The fashion firm’s shares have been
out of vogue since new boss Marco
Gobbetti revealed in November an
upmarket strategy designed to tap the
luxury market. The early disposal by
Mr Frère’s firm Groupe Bruxelles
Lambert, which also holds stakes in
Adidas and Pernod Ricard, bucked its
normal long-term investment strategy
but the market should not see the sale
as an “indicator of any deterioration”
in Burberry, Berenberg insisted.
Mr Frère building his stake
following the strategy shake-up lifted
investor confidence in the trench coat
maker. But the huge £498m stake sale
reignited doubts over the shift to halt
Burberry’s share price recovery. Its
shares slid 114.5p, or 6.1pc, to £17.70.
Elsewhere, impatient investors
punished G4S after the security
outsourcer admitted they would have
Winners and losers (pc)
Turnover (£)
Baring Emerging Europe
Mirriad Advertising
MXC Capital
TUI €
BUSINESS BULLETIN
EPS (p)
DIV (p)
Pay day
XD
2.18 (0.21) 14.000 (13.000)
Jun 27
May 17
4.400 (4.000)
Jul 05
May 31
37.70 (37.50) 12.300 (11.200)
52.40 (39.20)
Jul 30
Jun 21
0.000 (0.000)
–
–
51.70 (70.70) 28.435 (25.850)
0.70 (0.90)
Jun 29
May 24
-19.00 (-18.00)
0.000 (0.000)
–
–
-6.1m (-16.8m)
-0.17 (-0.49)
n/a (n/a)
–
–
Int 6.8bn (6.4bn) -247.2m (-310.8m)
-46.00 (-51.00)
n/a (n/a)
–
–
Vertu Motors
Fin 2.8bn (2.8bn)
30.4m (29.8m)
6.31 (6.14)
0.950 (0.900)
Jul 30
Jun 21
Vipera €
Fin 10.1m (7.9m)
-900k (-1.5m)
-0.38 (-0.62)
0.000 (0.000)
–
–
Ç Electricals
6.21
Ç Oil & Gas
3.51
Ç Tobaccos
3.43
Ç Mining
2.31
Ç Chemicals
1.21
Ç Banks
1.13
Ç General financial
1.05
914.2p after Exane BNP Paribas moved
it down to “neutral”.
The FTSE 100’s oil majors, BP and
Shell, led the index 96.77 points higher
to 7,662.52 after their earnings
potential was bolstered by the surge in
oil prices to a fresh three-and-a-halfyear high. Italian stocks clawed back
lost ground after the leaders of
populist parties Northern League and
Five Star Movement asked president
Sergio Mattarella to delay his plan to
install a “neutral” government by 24
hours to hold crunch coalition talks.
Hopes that Italians would not have
to return to the polling booths for a
second time this year to break the
political deadlock boosted the FTSE
MIB, Milan’s blue-chip index, as much
as 1.2pc before optimism faded slightly.
But credit markets remained
cautious, with Italian government
bond yields nudging higher.
Ç Gas & Water
0.9
Ç Information technology
0.85
Ç Construction
0.83
Ç Electricity
0.73
Ç Investment trusts
GlaxoSmithKline finance
boss to leave next year
21st Century Fox posted weaker-thanexpected earnings late last night, with
profit coming in at 51 cents per share,
excluding certain items, for the third
quarter, lower than analyst expectations
for 53 cents. The results came as the
media group confirmed it is buying
seven US local TV stations, mostly
based across the west coast, bolstering
its presence in the region.
GlaxoSmithKline’s chief financial
officer, Simon Dingemans, is planning
to retire next year, becoming the latest
name to step down from the group amid
a management reshuffle. News of Mr
Dingemans’ departure comes just over a
year after Emma Walmsley became
chief executive. Recent appointments
also include a new head of drug
research and a head of pharmaceuticals.
G4S expects growth to
British Land sells series
rise after productivity lift of contracts to Savills
www.theice.com/data
to wait until the second half of the year
for an acceleration in growth. The
blue-chip firm’s shares tumbled 3.9p to
257p as organic revenue growth
missed City estimates, slipping 2pc.
London-focused property
investment company Urban Exposure
floated on the Aim market with its
£150m fundraise becoming the largest
IPO on the junior market in 2018. Its
shares closed 5p higher at 105p on its
first day of dealing.
Health tech firm Renishaw surged
688p to £54.40 after lifting its
earnings forecasts while Smith &
Nephew nudged down 5.5p to £12.99
despite its new boss Namal Nawana
snapping up just under £3m of shares.
Troubled outsourcer Interserve
inched down 1p to 85p after Liberum
warned in a downgrade to “hold” that
“salvation requires a right issue”.
Publisher Pearson dropped 3.2p to
Fox misses on profit as it
buys up US TV stations
Security group G4S said it expects
growth to accelerate in the second half
of 2018 after organic revenue slipped in
the first quarter, down 2pc year on year.
G4S said stronger comparatives in the
first half of 2017 were partly to blame for
the sales dip, and said its performance
would be boosted by new contracts and
a productivity lift.
British Land has sold property
management contracts to real estate
group Savills, in a deal which will also
see the FTSE 100 company also transfer
around 160 employees to Savills. The
portfolio of contracts being sold to
Savills span across 28 locations in
London and Liverpool. The terms of the
deal were not disclosed.
Walmart pays $16bn for
77pc of India’s Flipkart
Marshalls sales take £9m
hit from severe weather
Walmart has splashed out $16bn
(£12bn) on India’s largest online
retailer Flipkart, strengthening its
fight against US rival Amazon. The US
grocer’s deal to buy 77pc of the firm
was revealed yesterday by Softbank
founder Masayoshi Son, who let slip
that his vision fund sold its stake in
Flipkart, netting a 60pc return.
FTSE 250 landscape product company
Marshalls said severe UK weather
conditions, including the Beast from the
East earlier this year, dented sales by
around £9m in the first four months of
2018. It said the snow and ice forced it
to close its factories for a number of
days and made ground working
difficult.
0.7
Ç Food producers
0.68
Ç Americans
0.68
È Beverages
-0.04
È Aerospace & defence
-0.25
È Household goods
-0.83
È Travel & Leisure
-1.41
Market data
Unit trusts & open-ended investment companies prices www.telegraph.co.uk/funds
World market indices
Name
Index
Ç Australia
+1309.44
3159.15
-2.35
-0.07pc
5534.63
+12.70
+0.23pc
DAX
12943.06
+30.85
+0.24pc
Hang Seng
30536.14
+133.33
+0.44pc
È India
S&P CNX500
9418.90
-0.95
-0.01pc
È Japan
Nikkei
22408.88
-99.81
-0.44pc
Æ Russia
RTS
1142.13
Straits Times
3548.54
Ç Spain
Madrid SE
Ç Switzerland
SMI Index
Ç USA
Ç USA
+0.15pc
1034.85
+5.16
+0.50pc
8984.10
+39.20
+0.44pc
Dow Jones
24542.54
+182.33
Nasdaq
7339.91
+73.01
616.3
-1.20
Biotech Acc
5.50
169.3
-1.90
+0.75pc
Emerg Mkts Acc
5.25
271.9
-1.00
130 Tonbridge Road, Tonbridge, Kent TN11 9DZ
Call free: Private Clients 0800 414161
Broker Dealings 0800 414181
+1.00pc
European Acc
5.25
907.7
-0.80
Unit Trust
Financial Acc
5.25
*686.0
+2.80
Global Opp Acc
5.25
*1453.0
-5.00
Wealthbuilder
Global Opp Inc
5.25
*1282.0
-4.00
Investment Funds (OEIC)
Change
-1.79
-0.14pc
È Aluminium
È Wheat
Ç Brent Crude
-1.20
M&G Dividend A Acc
4.00
691.87
+2.6
177.3000
+0.30
JPM Global Macro Opps A Inc 3.00
73.57
+0.55
Jupiter Emerg Euro Opps
–
204.94
+1.17
M&G Episode Growth A Inc
4.00
*61.37
+0.11
-0.23
Name
Init chge
Sell
Mid
Change
Buy on day
Multi-Mgr Inc&Gwth A Inc
5.25
155.1000
+0.20
JPM Global Uncons Eq A Acc 3.00
1343.0000
-4.0000
Jupiter European
–
2227.56
-1.70
M&G Episode Income A Inc
4.00
*129.42
Multi-Mgr Mangd A Acc†
5.00
*281.1000
+0.10
JPM Global Uncons Eq A Inc 3.00
99.7100
-0.2900
Jupiter Euro Inc Acc
–
82.62
-0.11
M&G Episode Income A Acc
4.00
*170.63
-0.3
Multi-Mgr Mangd A Inc†
5.00
*273.9000
+0.10
JPM Japan A Acc
3.00
476.4000
-6.8000
Jupiter Euro Inc Inc
–
56.68
-0.08
M&G Global Dividend A Inc
4.00
*208.58
+1.07
Sterling Bond Acc†
4.25 *219.1900 228.6500
…
JPM Japan A Inc
3.00
114.7000
-1.6000
Jupiter Euro Special Sits
–
424.97
+0.30
M&G Global Dividend A Acc
4.00
*286.52
+1.48
Sterling Bond Inc†
4.25 *64.4400 67.2200
…
JPM Multi-Asset Income A Acc 3.00
*94.8900
-0.1000
Jupiter Fin Opp
–
*634.68
+2.10
M&G Glbl Emrgng Mkts A Inc 4.00
267.24
-0.75
Strategic Bond A Inc
4.00
*122.3000
-0.20
JPM Multi-Asset Income A Inc 3.00
*64.7400
-0.0700
Jupiter Fund Of Inv Trusts
–
*259.08
+0.63
M&G Glbl Emrgng Mkts A Acc 4.00
289.29
-0.81
UK Absolute Return A Acc
5.00
158.5000
…
JPM Multi-Asset Inc A Mth Inc 3.00
*64.7100
-0.0700
Jupiter Global Emg Acc
–
70.20
-0.42
M&G Glbl High Yld Bd A Inc
3.00
*49.84
-0.04
UK Alpha A Acc†
5.25
155.8000
+0.50
JPM Multi-Man Gwth A Acc
3.00
1017.0000
+3.0000
Jupiter Global Eq Inc Acc
–
71.87
-0.02
M&G Glbl High Yld Bd A Acc
3.00
*130.96
-0.11
UK & Irish Small Co A Acc
5.00
681.3000
+2.40
JPM Multi-Man Gwth A Inc
3.00
930.6000
+3.0000
Jupiter Global Eq Inc Inc
–
62.91
-0.02
M&G Global Macro Bd A Inc
3.00
*82.46
-0.61
UK Equity Income A Inc
5.00
*650.4000
+3.60
JPM Natural Res A Acc
3.00
643.6000
+2.1000
Jupiter Global Managed Acc
–
234.09
-0.48
M&G Global Macro Bd A Acc
3.00
*125.38
-0.92
UK Index A Acc
–
640.6000
+2.10
JPM Natural Res A Inc
3.00
45.1000
+0.1400
Jupiter Global Managed Inc
–
225.01
-0.45
M&G Global Themes A Inc
4.00
890.71
-0.31
UK Tracker A Acc
–
287.9000
+1.20
JPM Sterling Corp Bd A Grs Acc 3.00
*92.2800
-0.3600
Jupiter Growth & Inc
–
*103.35
+0.22
M&G Global Themes A Acc
4.00
1384.65
-0.48
US Growth A Acc
5.00
1036.0000
-3.00
JPM Sterling Corp Bd A Grs Inc 3.00
*55.0700
-0.2200
Jupiter Income
–
587.16
+2.11
M&G Managed Growth A Inc 4.00
*111.17
+0.13
114.9
+0.20
JPM UK Dynamic A Acc
3.00
211.3000
+1.0000
Jupiter India Fd
–
124.01
-1.28
M&G Optimal Income A Inc
3.00
*149.05
-0.15
5.50
*1798.0
-21.00
Cash Fd Y
–
100.01
…
JPM UK Dynamic A Inc
3.00
166.6000
+0.7000
Jupiter Int Financials
–
99.55
+0.31
M&G Optimal Income A Acc
3.00
*210.61
-0.23
Japan Acc
5.25
604.2
-11.40
Cash Fd Y Accum.Units
–
100.37
…
JPM UK Equity Core E Acc
–
*370.7000
+1.2000
Jupiter Japan Inc Fd Acc
–
119.24
-1.39
M&G Property Portfolio A Inc
Managed Balanced Acc
5.25
395.6
-0.20
Income Funds
JPM UK Equity Core E Inc
–
*63.4400
+0.2000
Jupiter Japan Inc Fd Inc
–
93.37
-1.09
M&G Recovery A Inc
4.00
146.88
JPM UK Equity Gwth A Acc
3.00
148.1000
+0.5000
Jupiter Merlin Bal Prtfo Acc
–
185.06
-0.21
M&G Recovery A Acc
4.00
343.6
+1.3
JPM UK Equity Gwth A Inc
3.00
132.9000
+0.5000
Jupiter Merlin Bal Prtfo Inc
–
129.27
-0.15
M&G Strategic Corp Bd A Inc 3.00
75.05
-0.25
JPM UK Higher Inc A Acc
3.00
1118.0000
+3.0000
Jupiter Merlin Conserv Prtfo Acc–
58.30
+0.08
M&G Strategic Corp Bd A Acc 3.00
116.06
-0.4
JPM UK Higher Inc A Inc
3.00
582.0000
+1.6000
Jupiter Merlin Conserv Prtfo Inc–
50.43
+0.08
M&G UK Inc Distribution A Inc 4.00
795.49
+1.43
unch
£664.70
†Available as an ISA
£717.57
+4.05
+0.57pc
Managed Income Inc
5.25
*142.0
-0.20
£5019.15
-21.54
-0.43pc
Managed Income Acc
5.25
*994.6
-1.40
Enhanced Inc Fd
3.50
high grade
£15571.84
+0.01
0pc
£1687.53
-9.46
-0.56pc
Monthly Inc Inc
5.25
*261.6
+1.10
Extra Income Fd
3.50
27.49
-0.05
£2275.94
+1.20
+0.05pc
Monthly Inc Acc
5.25
*636.2
+2.80
Moneybuilder Bal
–
49.66
-0.03
-0.43pc
UK Growth Acc
5.25
312.0
+1.40
Moneybuilder Inc
–
36.32
-0.15
UK Select Opps R Inc
5.25
*1964.0
+8.00
Growth & Income Funds
high grade
*384.17
Sell
5.25
per oz
-7.46
£1734.30
È Nickel
–
Init chge
Global Tech
grade A
£10269.53
-20.45
-0.20pc
1465.00
+33.00
+2.30pc
per tonne
£146.50
-0.10
-0.07pc
UK Select Opps R Acc
5.25
*3603.0
+14.00
Jul settlement
$77.21
+2.36
+3.15pc
UK Smllr Cos Acc
5.25
*313.1
+0.50
Ç Baltic Dry Index*
Jupiter Eco Inc
Name
Health Acc
-0.78pc
special high grade
Change
Buy on day
+0.55
Sell
-0.27pc
-0.55pc
Ç Zinc
Mid
74.26
Init chge
-0.60pc
-1.75
È Lead
Change
Buy on day
JPM Global Macro Opps A Acc 3.00
Name
-0.03
-5.32
Ç Tin
Mid
+0.02
-5.85
£223.14
per oz
-0.3
138.3
Change
Buy on day
£12.14
£965.46
È Copper
3.50
Mid
85.6000
Sell
£969.36
È New Sovereign
Æ Platinum
Fidelity International
5.25
È Maples
Ç Palladium
7 Newgate Street, London, EC1A 7NX
www.axaframlington.com Cust Svs: 0845 777 5511
Amer Gwth Acc
Commodities summary
$1312.50
3.00 2422.01 2572.33 +13.16
AXA Investment Managers UK
Limited
closed
+5.37
per oz
Init chge
Maitland Discretionary Inc
84265.49
per troy oz
Name
+1.58pc
Bovespa
È Gold
Change
Buy on day
5.00
CAC General
È Silver
Mid
Multi-Mgr Inc&Gwth A Acc
Shanghai Composite
È Krugerrand
Sell
No 1, Poultry, London EC2R 8JR. 020 7415 4130
Ç Brazil
Price
Init chge
+0.34pc
Change
È China
Ç Singapore
Name
–
+21.20
Ç Hong Kong
Change
Buy on day
Multi-Mgr Divrsfd A Acc
6204.40
Ç Germany
Mid
Sell
Discretionary Unit Fund
All Ordinaries
Ç France
Init chge
*Copyright Baltic Exchange Information Services Ltd.
AXA IM Funds www.axa-im.co.uk
109.1
…
J.P. Morgan Asset Management
60 Victoria Embankment, London, EC4Y 0JP
Clients:0800 204020.Brokerline 0800 727770
£ > € Rate 1.1454 Change +0.51¢ £ > $ Rate 1.3579 Change +0.60¢
Tourist £1= Sterling £1=
1 Euro =
1 Dollar =
Pan Euro HY Bond Inc
5.25
*32.18
-0.02
Pan Euro HY Bond Acc
5.25
*104.8
…
JPM UK Sm Cos A Acc
3.00
503.1000
+1.5000
Jupiter Merlin Grth Prtfo Acc –
410.93
+0.22
M&G UK Inc Distribution A Acc 4.00
7237.48
+12.99
-0.3800
JPM UK Sm Cos A Inc
3.00
96.0600
+0.3000
Jupiter Merlin Grth Prtfo Inc –
399.37
+0.22
M&G UK Infl Lkd Corp A Inc
3.00
*114.72
-0.08
JPM America Eq A Inc
3.00
90.5000
-0.3800
JPM UK Strat Eq Inc A Acc
3.00
*195.5000
+0.6000
Jupiter Merlin Inc Prtfo Acc
–
*299.20
+0.17
M&G UK Infl Lkd Corp A Acc 3.00
*118.34
-0.09
JPM UK Strat Eq Inc A Inc
3.00
*115.0000
+0.3000
Jupiter Merlin Inc Prtfo Inc
–
*134.44
+0.08
N.A.A.C.I.F. Inc
–
*87.34
+0.15
JPM Uncons Bond A Acc
3.00
*71.7700
-0.2300
–
*8684.85
+15.19
258.6
+0.3
JPM Asia Growth A Acc
3.00
213.0000
-0.1000
Moneybldr Gwth
–
80.92
+0.29
JPM Asia Growth A Inc
3.00
117.4000
…
3780
-12
1518
-3
…
+0.55
90.5100
3.50
3.50
117.38
3.00
Moneybldr Div
American
117.38
JPM America Eq A Acc
Growth Funds
Exchange rates
–
Jupiter Merlin WW Prtfo Acc –
294.22
+0.20
N.A.A.C.I.F. Acc
Jupiter Merlin WW Prtfo Inc –
294.20
+0.19
†CAR - Net Income reinvested.
Jupiter Monthly Inc Acc
–
*117.63
+0.03
Jupiter Monthly Inc Inc
–
*31.19
+0.01
Jupiter N.American Inc Acc
–
149.25
-0.41
Jupiter N.American Inc Inc
-0.34
Natwest Investment Funds
(RBS Collective Investment Funds Ltd)
PO Box 249, York YO90 1ZY
0117 940 3848
Aus $
1.7236
1.8201
1.5891
1.3404
Amer Sp Sits
3.50
Canada
Can $
1.6660
1.7469
1.5252
1.2865
European
3.50
2286
+3
–
124.36
Denmark
Krone
8.0855
8.5334
7.4503
6.2843
European Opps
3.50
522.4
+1.3
Jupiter Responsible Inc Fd Acc –
*116.73
-0.04
Balanced Inc
5.00
*328.90
Global Special Sits
3.50
3895
-12
Jupiter Responsible Inc Fd Inc –
*74.05
-0.03
Balanced Acc
5.00
*422.00
…
Japan
3.50
370.1
-4.1
Jupiter Strategic Bond Acc
–
*97.15
-0.28
Equity Income
5.00
*349.80
…
…
Australia
Euro
€
1.0897
1.1454
…
0.8435
HK $
10.0600
10.6593
9.3064
7.8498
India
Rupee
80.2100
91.3680
79.7712
67.2862
Israel
Shekels
Hong Kong
4.4085
4.8743
4.2557
3.5896
Yen
140.9300
148.9481
130.0429
109.6900
Kuwait
Dinar
…
0.4095
0.3575
0.3015
New Zealand
NZ $
1.8071
1.9436
1.6969
1.4313
Japan
BNY Mellon Fund Managers
Japan Smaller Cos
3.50
322.7
-4.0
Jupiter Strategic Bond Inc
–
*63.81
-0.18
Extra Income
5.00
*108.60
Investors: 0800 614330 Brokers: 08085 660000
www.bnymellonim.co.uk,
clientservices@bnymellon.com
Global Focus
3.50
1964
-7
Jupiter Strategic Res Acc
–
53.48
-0.03
Growth
5.00
*392.70
…
Index UK A Acc
–
110.0200
+0.2500
Jupiter Strategic Res Inc
–
52.05
-0.04
High Yield
5.00
*126.60
…
Jupiter UK Growth
–
348.48
+1.03
Intntl Growth
5.00
*499.60
…
Jupiter UK Smaller Cos
–
373.18
+0.83
Jupiter UK Special Sits Inc
Norway
Krone
10.5000
10.9686
9.5764
8.0776
Pakistan
3.50
4119
+24
146.9100
156.9529
137.0318
115.5850
BNY Mellon Investment Funds (ICVC)
Special Sits
Rupee
Riyal
4.7326
5.0925
4.4461
3.7502
Sterling Income Shares
South East Asia
3.50
1393
-2
Boston Co US Opp Fund
0%
123.90
+0.23
UK Select Acc
3.50
300.1
+0.4
Insight Corporate Bd
0%
92.38
-0.53
Target Funds
Insight Eq Inc Fund
0%
179.93
+0.66
Insight Eq Inc Booster
0%
130.32
+0.28
Target 2020
Insight Glob Abs Ret Inc
0%
110.61
-0.01
†CAR - Net income reinvested
Insight Glob Multi-Strat Fd
0%
*123.74
+0.04
PO BOX 23850, Edinburgh EH7 5FY
Dealing and Admin 0330 123 3822
Insight Inflat-Link Corp Bd
0%
*107.20
-0.29
Glob Income
5.00
157.81
166.29
-0.28
Long-Term Global Equity
0%
255.36
-1.08
Growth Fd
5.00
430.14
454.92
+2.46
Saudi Arabia
Singapore
South Africa
$
1.6909
1.8223
1.5911
1.3420
Rand
16.0600
17.0858
14.9171
12.5825
Sweden
Krona
11.4100
11.8246
10.3238
8.7080
Switzerland
Franc
1.2908
1.3637
1.1906
1.0043
Thailand
Baht
38.7500
43.5614
38.0324
32.0800
Dirham
4.6518
4.9878
4.3547
3.6732
£
…
…
0.8730
0.7364
UAE
UK
USA
$
1.2890
1.3579
1.1856
…
Tourist rates for indication use only. www.travelex.co.uk
Rates
Inflation
Change on month
Year
+3.3pc
3.50
66.01
-0.19
Newton Asian Income
0%
196.9
-0.80
Fundsmith LLP
Newton Cont European
0%
271.47
-0.27
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%
101.59
-0.12
Mar 278.80
CPI (2015=100 target 2pc)
Mar 105.00
+0.10
+2.5pc
Newton Glb High Yld Bd
0%
59.62
-0.13
Halifax house price index
Apr 715.10
-3.1pc
+2.2pc
Newton Glb Inc Stg Inc
0%
192.82
-0.94
Fundsmith Equity T Acc
–
362.07
-0.80
JPM Div Gth A Net ACC
3.00
*261.3000
-0.2000
JPM Uncons Bond A Inc
Newton Glb Opps
0%
284.91
-1.37
Fundsmith Equity T Inc
–
336.16
-0.74
JPM Emg Euro Eq A Acc
3.00
192.9000
+0.5000
JPM US Eq Inc £ Hdg A Inc
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
0.52pc
European repo rate
1.25pc
3 months
0.68pc
European base rate
0.00pc
6 months
0.79pc
Overnight
1.50-1.75pc
Major price changes FTSE 100
Risers 77
Ç Imp Brands
Ç BP
Ç Evraz
Volume
Close
Change
Fallers 22
Volume
Close
Change
6.13m
2780
6.17pc
È Burberry
6.29m
1770
-6.08pc
64.27m
572
3.92pc
È Compass
9.39m
1508
-4.77pc
2.43m
507¾
3.51pc
È Rolls Royce
5.92m
830
-1.54pc
Ç BHP Billiton
8.46m
1631¾
3.49pc
È G4S
14.75m
257
-1.49pc
Ç Royal D Shell B
6.50m
2722
3.38pc
È TUI AG
1.59m
1727½
-1.45pc
Ç Brit Amer Tob
6.63m
3909
2.63pc
È Shire
4.51m
3978
-1.40pc
Ç Rio Tinto
4.37m
4127
2.56pc
È NMC Health
0.79m
3518
-1.29pc
Ç Glencore
*197.39
+0.78
74.71
+0.31
Jupiter US Sm&Md Cap Ret Acc –
68.91
+0.27
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
Init chge
Sell
Mid
Change
Buy on day
Name
Kings Meadow, Chester, CH99 9UT
0870 333 1835
Mid
Change
Buy on day
3.00
*56.4400
-0.1800
High Income Inc
–
*111.2
111.2
-0.3
3.00
*115.9000
…
High Income Acc
–
*255.6
255.6
-0.7
Init chge
Sell
Newton Intnl Bond
0%
232.82
-1.55
JPM Emg Euro Eq A Inc
3.00
42.6100
+0.1200
JPM US Eq Inc A Acc
3.00
*172.1000
-0.6000
UK Select Port Inc
–
354.6
354.6
…
Newton Multi-Asset Bal
0%
196.01
-0.32
JPM Emg Markets A Acc
3.00
225.3000
-0.9000
JPM US Eq Inc A Inc
3.00
*138.4000
-0.5000
UK Selection Port
–
642.6
642.6
-0.1
Newton Mult-Asset Div Ret
0%
155.16
-0.08
JPM Emg Markets A Inc
3.00
95.9500
-0.3900
JPM US Select A Acc
3.00
163.2000
-0.4000
UK 100 Co’s Fund Inc
–
223.6
223.6
…
Newton Mult-Asset Gwth
0%
848.37
+0.60
JPM Emg Mkts Inc A Acc
3.00
*73.3900
-0.2500
JPM US Select A Inc
3.00
161.1000
-0.4000
UK 100 Co’s Fund Acc
–
385.7
385.7
-0.1
Newton Oriental
0%
674.12
-3.08
JPM Emg Mkts Inc A Inc
Newton Real Return A
0%
113.11
-0.29
Newton UK Equity Fund
0%
883.62
+1.26
Newton UK Inc
0%
68
+0.17
Newton UK Opps
0%
335.49
+1.23
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
3.00
*58.0500
-0.2000
JPM US Sm Cos A Acc
3.00
668.3000
+2.2000
W’wide Man Inc
–
510.1
+2.6
JPM Eur Dyn (ex-UK) £ Hg A Acc3.00
221.4000
+1.3000
JPM US Sm Cos A Inc
3.00
175.0000
+0.5000
W’wide Man Acc
–
818.5
+4.2
JPM Euro Dyn (ex-UK) A Acc 3.00
226.1000
+0.6000
JPM Euro Dyn (ex-UK) A Inc
3.00
101.4000
+0.2000
-1.00
JPM Europe A Acc
3.00
1486.0000
+3.0000
…
JPM Europe A Inc
3.00
82.5900
+0.1700
+0.70
JPM Euro Smaller Co A Acc
3.00
789.6000
+3.3000
*153.7000
+0.40
JPM Euro Smaller Co A Inc
3.00
102.3000
+0.5000
5.00
1514.0000
…
JPM Global Bd Opps A Grs Acc –
*54.0000
-0.0500
Emerg Mkts Opps A Acc
5.00
206.2000
-1.00
JPM Global Bd Opps A Grs Inc –
*48.7700
-0.0500
Asia Pac Cap Gwth A Acc
5.00
1130.0000
Asian Dividend Income Inc
5.00 *108.2300 113.7100
Cautious Managed A Acc
5.00
*269.6000
Cautious Managed A Inc
5.00
China Opps A Acc
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
55.07m
366⅞
2.10pc
È RSA Ins
4.65m
635⅜
-1.12pc
Ç PaddyPwrBet
0.14m
7045
2.10pc
È Informa
10.79m
755¾
-0.92pc
FENIX Balanced Fd
5.00
*158.8
…
European Growth A Acc†
5.25
238.2000
+0.40
JPM Global Bond A Gross Acc 3.00
261.9000
-0.1000
Charibond Inc
–
*122.57
-0.32
Ç Antofagasta
3.41m
1013½
2.00pc
È Old Mutual
16.02m
255
-0.86pc
Generation Fd
5.00
787.0
…
European Sel Opps A Acc
5.00
1666.0000
…
JPM Global Bond A Gross Inc 3.00
203.1000
-0.2000
Jupiter Abslt Rtn
–
54.18
-0.04
Charibond Acc
–
*3959.14
-10.42
Consistent Unit Trust
Management Co Ltd
Fixed Int Mthly Inc A Inc
4.25 *21.6400 22.5700
…
JPM Global Eq Inc £ Hdg A Acc 3.00
*83.4500
+0.1100
Jupiter Asian Fd
–
923.11
+1.54
Charifund Inc
–
*1620.35
+2.03
Global Care Growth A Inc
4.50
*294.4000
-1.10
JPM Global Eq Inc £ Hdg A Inc 3.00
*55.4900
+0.0800
Jupiter Asian Inc Fd Acc
–
131.23
-0.55
Charifund Acc
–
*25094.46
+31.4
Admin: Stuart House, St John’s St,
Peterborough PE1 5DD
Dealing & Client Services 0345 850 8818
Global Equity Inc A Inc†
5.25
61.3200
-0.03
JPM Global Eq Inc Fd A Acc
3.00
*98.5000
-0.1600
Jupiter Asian Inc Fd Inc
–
121.30
-0.51
M&G Corp Bond A Inc
3.00
*40.09
-0.17
Global Growth Acc
4.25 3078.7900 3211.4099
…
JPM Global Eq Inc Fd A Inc
3.00
*79.3400
-0.1300
Jupiter China Acc
–
141.99
-0.24
M&G Corp Bond A Acc
3.00
*69.19
-0.29
Global Strategic Cap Acc†
5.00
242.5000
+0.70
JPM Global HiYld Bd A Grs Acc 3.00
*110.2000
-0.1000
Jupiter China Inc
–
136.43
-0.23
M&G Dividend A Inc
4.00
62.13
+0.23
Ç Johnson Matt
0.44m
3407
1.98pc
È Intl Cons Air
8.09m
694⅜
-0.83pc
47.18m
211
1.96pc
È Morrison (Wm) 15.07m
245⅜
-0.69pc
Ç Ashtead Group
1.99m
2200
1.95pc
È Carnival
1.15m
4797
-0.62pc
Ç Fresnillo
0.88m
1299½
1.76pc
È Easyjet
1.85m
1658
-0.42pc
Ç Barclays
22.68m
279¼
1.68pc
È Smith&Neph
6.47m
1299
-0.42pc
Ç 3i
Ç Legal&Gen
2.73m
956⅝
1.64pc
È Whitbread
0.56m
4242
-0.31pc
Ç Randgold Res
0.47m
6100
1.57pc
È Land Secs
2.05m
981⅝
-0.28pc
Ç Barratt Dev
Ç Hargrve Lans
Ç Sainsbury
Ç Sage Group
Ç Next
…
3.86m
568¼
1.43pc
È Melrose Ind
24.60m
233
-0.09pc
Unit Tst Inc
0%
52.85
53.62
-0.06
Global Technology A Acc
5.00
1753.0000
-5.00
JPM Global HiYld Bd A Grs Inc 3.00
*36.3200
-0.0100
Jupiter Corp Bond Inc
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56.40
-0.18
0.61m
1866½
1.39pc
È Coca-Cola HBC
0.81m
2466
-0.08pc
0%
136.3
138.3
-0.1
Multi-Mgr Abs Ret A Acc
5.00
*141.3000
-0.10
JPM Global HiYldBdAGrsMthInc3.00
*36.3200
-0.0200
Jupiter Dstrbtn Acc
–
*102.14
-0.18
299½
1.39pc
È Smiths Gp
Unit Tst Acc
17.76m
1.44m
1655
-0.06pc
3.83m
662¼
1.38pc
È Just Eat
2.79m
796⅜
-0.05pc
Practical Invest Inc
5.00
239.7
256.5
+0.1
Multi-Mgr Active A Acc†
5.00
*226.6000
…
JPM Global Macro Bal A Acc
3.00
*72.5600
+0.1800
Jupiter Dstrbtn Inc
–
*59.07
-0.11
0.67m
5246
1.31pc
È Diageo
4.85m
2659½
-0.04pc
Practical Invest Acc
5.00
1268
1358
…
Multi-Mgr Distbn A Inc
5.25
136.1000
+0.20
JPM Global Macro Bal A Inc
3.00
*63.5600
+0.1600
Jupiter Dstrbtn & Grth Inc
–
*124.25
+0.11
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8
Thursday 10 May 2018 The Daily Telegraph
***
Business
‘We are obsessed with our customers’
The CEO of rising
fitness wear brand
Gymshark tells
Sophie Christie how
quick thinking is the
key to its success
C
‘It’s our USP that we are
able to be agile, and create
and produce new items
within eight to 10 weeks’
Hewitt has been at the helm of the
business since 2014, following a
six-year stint at Reebok, and has led
the way in expanding the company on
a global scale.
When he joined the company,
initially as managing director, he
injected some much-needed
experience into the group of young
friends, who had little knowledge of
how to build a business, let alone one
of the fastest-growing in the UK.
Gymshark’s success can be
attributed to a number of different
factors, Hewitt believes. Its social
media influence (it has 2.2m
GYMSHARK
hances are you’ve never
heard of the fitness
clothing company
Gymshark, but ask your
millennial children and
they’ll enthusiastically
say they have.
The British brand has a dedicated
following of 20-somethings who aspire
to look like the “influencers” they
follow on social media, who are often
kitted out in Gymshark leggings and
sports bras. Since the company was
launched in 2012 by a group of school
friends, it has relied heavily on
bloggers, vloggers and “ambassadors”
(all 75 of them) to advertise its apparel
on platforms such as Instagram and
YouTube.
Ben Francis headed up the group of
school friends that came up with the
idea for Gymshark while at university.
Although some of the group
dropped out to pursue other careers,
Francis, who was around 19 years-old
at the time, stuck with the business,
turning it into an online brand which
has seen triple-digit growth. The
company turned over £40.5m for the
12 months to July 2017, and is on
course to reach £100m this year.
While only £8m of that £40.5m
translated into profit before tax, Steve
Hewitt, the company’s chief executive,
puts this down to the fact that the team
has been focused on growing
Gymshark at a sustainable level.
followers on Instagram) was
undeniably key in getting the brand
in front of its core demographic of
16-25 year-olds early on, but the
business is “less reliant” on this form
of marketing these days, he says.
“Our success is down to many
things: we have invested in the right
people, widened our product range,
focused on expanding into new
markets, such as France and
Germany last year, and we are
getting more commercially savvy,”
Hewitt says.
“We’re much braver about how
much stock we purchase now. Last
year, we were out of stock around
Steve Hewitt, chief
executive of Gymshark,
above left, Ben Francis,
its founder, centre, and
strategic officer Paul
Richardson, right, have
tapped into the power
of social media; the
company prepares
Birmingham’s Bull Ring
for a pop-up event this
weekend, left
40pc of the time, but that’s not the
case any more. We’re much more bold
now when it comes to forecasting the
business.”
The booming popularity of
“athleisure” – when casual clothing
designed to be worn for exercising is
worn in other settings, such as at work
or school – has also boosted the
company’s fortunes. It is able to take
advantage of the latest trends and
develop new products quicker than its
competitors.
“It’s our USP that we are able to be
agile, and create and produce new
items within eight to 10 weeks, when
other fitness and sports brands would
take much longer.
“We’re obsessed with our customer
and we’re very good at knowing
exactly what kind of products they
want, helping us stay one step ahead
of the competition.”
Gymshark boasts of selling its
“aspirational but affordable” apparel
(leggings cost around £35) to
customers in 177 countries, through its
11 online stores in the UK, US and
throughout Europe. The company has
no wholesale stockists, so sells
directly to the consumer.
The brand has struck a chord with
millennials, who are more into fitness
and health than the generations
before them. “A decade ago young
adults would spend their time at the
pub, but that’s changed. Now they’re
in the gym or at a coffee house,” says
Hewitt.
The team plans to expand into other
territories which have a large number
of young, active people, such as China
and Brazil. While 16-25 is the target
age range for Gymshark, younger
teenagers are also fans of the brand
due to its prevalence on social media.
Hewitt admits his own 13-year-old
daughter has become “really popular
at school because all her friends love
the brand”.
The company is based in Solihull,
near Birmingham, and its newly built
42,000 sq ft headquarters houses all
165 of its employees, the majority of
whom are from the West Midlands.
The HQ, which will have a
300-strong workforce by this time
next year, has chill-out zones with
napping pods, and even a cinema.
The absence of bricks-and-mortar
stores means the company does not
face the same challenges as other high
street names. Instead, it hosts pop-up
“events” where consumers can meet
Gymshark ambassadors, buy exclusive
products and “experience the brand”.
The free events, which take place in
cities such as Melbourne and Los
Angeles, and in its home town of
Birmingham this weekend, make the
brand accessible to its fans, Hewitt
says. “That’s not to say we won’t open
any shops in future though. We’re
open to exploring the best
opportunities out there for us.”
Compass plans
to focus on its
catering arm
as profits slide
By Rhiannon Curry
CATERING company Compass plans to
move away from providing cleaning
and security services to concentrate on
its food business as it suffered sliding
half year profits, particularly in Europe.
The company promised an “even
greater focus” on its food services business, which provides meals to the
armed forces, schoolchildren and large
events, rather than winning support
services contracts.
The firm flagged its intention to
move away from support services earlier in the year, but Dominic Blakemore,
chief executive, said he planned to focus on “what the company does well”
in order to maximise profits.
Currently, support services account
for around 15pc of the business’s revenues. “Around half of that 15pc is in
bundled contracts, where we’re providing food and cleaning services, such
as in hospitals,” Mr Blakemore said.
“We’re happy with that model, but
there is around 5pc of that where we’re
just debating whether we are the right
owners of those businesses.”
Kean Marden, equity analyst at Jefferies, said that Compass could be more
4.7pc
The decline in pre-tax profits recorded by
Compass, to £792m, with the stronger
pound impacting the catering group
“aggressive” in moving away from support services work.
“A recalibration would improve earnings quality but could modestly weigh
on group organic revenue growth and
margins for one to two years,” he added.
Compass revealed its first half results yesterday, in which it reported it
had missed its earnings expectations
because of stagnant revenue and a
steep decline in margins in Europe.
Revenue was £11.38bn, down from
£11.47bn a year previously, while pretax profits fell 4.7pc to £792m as a result of a stronger pound, which affected
overseas earnings.
In Europe – which contributes to
about a quarter of Compass’s revenue
– profit fell by 9.6pc on a constant currency basis.
Shares in the FTSE 100 company fell
4.8pc to £115.08 in response, their largest daily percentage decline in three
years.
But Mr Blakemore said the business
was in good shape, pointing to recent
contract wins in the UK to provide catering for Goodwood and Tottenham
Hotspur football club.
Boardroom strife at gold miner
Petropavlovsk takes a new twist
By Jon Yeomans
THE boardroom struggles at gold
miner Petropavlovsk have taken another twist after two mystery investors
demanded the resignation of the entire
board and the reinstatement of three
former directors.
Petropavlovsk, which has three gold
mines in the far east of Russia, revealed
that CABS Platform and Slevin – who
hold 9.11pc of the company between
them – will table motions at the forthcoming annual general meeting.
The investors want to bring back
Pavel Maslovskiy, the company’s former chief executive and co-founder,
and reinstate two other ex-directors:
Sir Roderic Lyne, the UK’s former ambassador to Russia, and Robert Jenkins.
Gibraltar-registered CABS and British West Indies-based Slevin have built
up their stakes in Petropavlovsk since
March. The gold miner said it was “taking advice in relation to the validity of
the requisition” and recommended
that shareholders take no action. It is
thought the new shareholders are “international activist investors” who
spied an opportunity because Petropavlovsk’s shares were undervalued.
The company was founded in 1994
by Dr Maslovskiy and Peter Hambro,
who was ousted last summer by major
shareholder Viktor Vekselberg and
Peter Hambro,
co-founder of gold
miner Petropavlovsk,
who was ousted last
summer by a major
shareholder
funds Sothic and M&G. The trio installed a number of new directors.
Dr Maslovskiy resigned shortly after
the boardroom coup and Mr Vekselberg subsequently sold his stake to Kazakh investor Kenes Rakishev, who
now holds 22pc of the company.
Mr Rakishev had lobbied for Dr Maslovskiy’s return but the board opted to
The ‘Provvy’ back on track,
says boss, after year to forget
By Lucy Burton
EMBATTLED doorstep lender Provident Financial has promised investors
that it has finally turned a corner following the worst year in its history.
The former FTSE 100 company
widely known as “the Provvy” broke a
long spell of bad news yesterday by announcing that its recovery plan was on
Malcolm Le May, the
chief executive of
Provident Financial,
said the group was
now in a strong
capital position
track and all three of its businesses had
performed well. The 138-year-old firm,
which provides credit to families in financial difficulty, is reliant on its doorto-door sales force and was plunged
into crisis last year following a decision
to try to modernise by cutting staff and
relying more on technology.
The botched restructuring led to
two profit warnings, the exit of its for-
mer boss, a cancelled dividend and a
£331m rights issue. It lost around
£1.7bn in value in one day last August,
the biggest one-day fall in the history
of the FTSE 100.
Provident then had to pay a fine and
millions of pounds in compensation to
customers of its Vanquis Bank arm,
which lends money to those who have
been turned down for credit elsewhere, for mis-selling a repayment
plan. Its car lending arm Moneybarn is
also being investigated.
However, Provident said the opening months of 2018 had provided some
hope. It told investors that there had
been “good” performance in its debt
collection business during the critical
post-Christmas period while Vanquis
Bank was performing ahead of plan
and Moneybarn had seen a surge in
customers.
Malcolm Le May, who took the helm
in February, said the recent cash call
had put the group in a strong capital
position. “We are making good progress in strengthening the group’s governance framework,” he said.
Shares in the Yorkshire-based company rose 8.3pc to 695.6p.
appoint Roman Deniskin, who started
last month. Mr Rakishev’s support is
thought crucial to the chances of the
activists’ success. He said he was “keen
to find out more” about the new shareholders and their proposals.
Mr Hambro, who retains a 0.5pc
stake in the miner, said he was “delighted” others had “concluded that the
present board is not the right one to
unlock the huge potential of the company of which I was chairman for 23
years”.
He added: “I believe that it is good
news for all shareholders, if they are allowed to vote for this change, which
shows that my old friend and business
partner, Pavel Maslovskiy, has been selected by them to be the chief executive officer. I also believe that … in
these rather tricky times in Russia’s relationship with the West, it would be
reassuring to have our former ambassador as chairman.”
The firm will hold its AGM by the
end of June. The shares, which were
worth 590p in 2006, rose 1.4pc to 7p.
Rolls loses executive
Simon Kirby as
shake-up continues
By Alan Tovey
A CRACKDOWN on spending at RollsRoyce as boss Warren East leads a
major cost-cutting and restructuring
programme has claimed a high-profile
scalp, with a top executive to go after
less than two years with the blue-chip
engineer.
An internal memo from Mr East
revealed that Simon Kirby, the chief
operating officer, is to leave in June,
after just 19 months in the job.
Mr Kirby was poached from rail project HS2 – where he was paid £750,000,
making him the UK’s best paid civil
servant – to head a shake-up at Rolls.
His appointment was deemed vital
to slimming down Rolls’s bloated structure, which had contributed to a run of
profit warnings that saw the group’s
share price crash and led to Mr East
being parachuted in three years ago to
oversee the company’s recovery.
In the memo, the chief executive
acknowledged Mr Kirby’s contributions, which have included clearing
out several management layers and
reducing the company from five divisions to three.
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