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BUSINESS WITH PERSONALITY THURSDAY 13 SEPTEMBER 2018

ISSUE 3,208

CITYAM.COM

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Sports Direct AGM fuels Debenhams and House of Fraser merger talk SEBASTIAN MCCARTHY @SebMcCarthy THE PROSPECT of a merger between troubled high street giants Debenhams and House of Fraser arose at the annual shareholders’ meeting yesterday of retailer Sports Direct, which owns the former and has a major stake in the latter.

Debenhams’ share price rose nine per cent at the suggestion of a linkup, which came after a question about the idea was put to Sports Direct’s senior non-executive director, Simon Bentley. Bentley’s reply to the original question from a reporter was: “It’s been discussed,” Reuters reported. However, Bentley, who announced

yesterday he was stepping down from the board along with chairman Keith Hellawell, later denied he had said that. “I was asked a general question about whether or not we discuss our strategic investments, and in particular Debenhams, to which I replied in the positive,” he said. “I made no mention of any merger between House of Fraser and

BEARS TAKE BITE OUT OF SNAP STOCK JAMES BOOTH AND JOSH MINES

@Jamesdbooth1 @Josh_Mines TECH giant Snap saw its shares dive to another record low last night after a damning note from an influential analyst described the company’s performance as “embarrassing”. The owner of the Snapchat messaging app was blasted by BTIG analyst Richard Greenfield, who urged investors to sell their shares in the firm. Snap’s shares closed at $9.89 on Tuesday night, before plunging seven per cent to $9.20 at the close of trading yesterday. BTIG cut its target price for the share to $5, saying: “We do not believe the pain is over; we see the stock being cut in half again over the

coming year.” If the share price did hit $5 it would mark a precipitous fall from a peak of $27-a-share following Snap’s March 2017 initial public offering (IPO). BTIG’s note said: “We find it embarrassing how far short Snapchat has fallen from levels we, and more importantly management, [were] confident in achieving at the time of their IPO. “We are tired of Snapchat’s excuses for missing numbers and are no longer willing to give management ‘time’ to figure out monetisation.” Jefferies analyst Brent Thill also disparaged Snap’s performance yesterday, but gave it a more generous target price of $11, still a drop from its previous $14 target. He said Snap’s user figures were a

worry, with both daily-active-user counts and time spent on the Snapchat app continuing to “trend negatively”. He also cited the resignation this week of Snap’s chief strategy officer Imran Khan as “troubling given how early on it is in the business transition”. In January, Snap unveiled a redesign that was aimed at helping it monetise its service by including more adverts. The redesign was widely panned by users with more than 1m signing a survey calling for the changes to be rolled back. Kardashian clan member Kylie Jenner tweeted in February that she no longer opened Snapchat following the changes, wiping $1.3bn (£1bn) from its value.

Debenhams, nor did I intend my answer to infer that.” The UK’s largest sports-goods retailer Sports Direct International – majority-owned by the colourful chairman of Newcastle United FC Mike Ashley – bought department store chain House of Fraser out of administration in August. The firm already had a 29 per cent

stake in the Debenhams store group. Ashley also survived a potential shareholder backlash at the company’s AGM yesterday, with just under 10 per cent of investors voting against the re-election of the billionaire retail magnate as chief executive. £ THE CITY VIEW: P2

WHO’S THE DADDY? Dimon says Trump merely inherited his cash

JAMES BOOTH @Jamesdbooth1 JP MORGAN chief executive Jamie Dimon attacked US President Donald Trump yesterday, saying he could beat him in an election. “I think I could beat Trump... because I’m as tough as he is, I’m smarter than he is,” Dimon said. The bank boss, 62, whose role at JP

Morgan has made him a billionaire, also attacked Trump for inheriting his wealth. “And by the way this wealthy New Yorker actually earned his money,” Dimon said, pointing at himself, adding: “It wasn’t a gift from Daddy.” Shortly after his comments, the bank rushed out a statement from Dimon, saying: “I should not have said it. I’m not running for president.”

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CITYAM.COM

THURSDAY 13 SEPTEMBER 2018

CORE PRODUCT Apple’s chief exec cooks up plans for more profits with the launch of three new iPhone models last night

THE CITY VIEW

Mike Ashley must stop playing the clown

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MPTYING his pockets of wads of £50 notes at a security check, telling a select committee about vomiting in a fireplace at board meetings – Sports Direct boss Mike Ashley is clearly not afraid of theatre. Against type, he has now chosen to play the part of white knight of the high street, but yesterday’s events reminded the City that his transformation to slick tycoon isn’t yet complete. The firm has bowed to heavy investor pressure and removed chair Keith Hellawell – a welcome step. Yet later in the same day their outgoing senior independent director casually let slip that the firm considered merging the recently rescued House of Fraser with its struggling rival Debenhams, in which Sports Direct holds a 30 per cent stake. Shares in Debenhams duly surged, forcing a hastily-put-together statement that, in fact, Sports Direct is not going to make an offer – another farcical scene in the Ashley story. Ashley clearly knows how to run a successful business. He started Sports Direct in 1982 from a single Maidenhead store, and perfected the American-style pile-it-high, sell-it-cheap strategy, with canny acquisitions of sporting brands to supply the chain. Yet questions remain over his broader strategy of taking punts on companies seemingly on the basis that the chief executive fancies they’re a bit undervalued. It remains to be seen if he can pull off his next big strategic play, taking the bargain basement upmarket. House of Fraser is a very different prospect indeed, with customers valuing their in-store experience and the brand’s cachet as much as price. Investors have a job to do too. Firms like Royal London Asset Management are to be applauded for their vocal criticisms of the leadership on show at the Shirebrook-headquartered firm. However, Sports Direct’s corporate governance practices still appear better-suited to a billionaire’s private plaything than a company that is – lest we forget – partly owned by pensioners as a constituent of the FTSE 250. If Ashley is to be the saviour of the high street he and his board will have to up their game. Laddish behaviour, colourful characters and general buffoonery make for good viewing from afar, but they are no way to run a public business.

Ashley clearly knows how to run a successful business

Follow us on Twitter @cityam FINANCIAL TIMES

HERSHEY GRABS PIRATE BRANDS IN $420M DEAL

US candy giant Hershey is scooping up Pirate Brands, the maker of cheese puff snack Pirate’s Booty, in an effort to boost its line-up of healthier products. Pennsylvania-based Hershey – whose sweet treats include Reese’s, Twizzlers and Kit Kats – said yesterday that it would pay $420m (£322m), or $360m net of tax benefits, to B&G Foods for Pirate Brands, financing the transaction primarily through cash and short-term borrowings.

DEAL TO END FRANCE-UK ‘SCALLOP WAR’ FLOUNDERS

Talks between French and British fisherman over a deal to end the

WHAT THE OTHER PAPERS SAY THIS MORNING

“scallop war” in the English Channel have failed, according to a statement yesterday from French food and agriculture minister Stephane Travert which acknowledged the failure.

APPLE chief executive Steve Cook (pictured) last night unveiled three new versions of its iPhone X and a new Apple Watch at an event in California. “Today we’re going to take iPhone X to the next level,” Cook said. The new XR, XS and XS Max models will be priced at $749, $999 and $1,099 respectively in the US. The Apple Series 4 Watch will start at £399. MORE IN TECHNOLOGY: P21

UK never ‘ordinary third country’, says Juncker CATHERINE NEILAN @CatNeilan THE UK will “never be an ordinary third country” for the EU, Jean-Claude Juncker said in yesterday’s State of the Union address – but indicated that the Chequers proposal of a Single Market for goods is a non-starter. Giving his annual speech, the European Commission president told MEPs in Strasbourg that the UK would “always be a very close neighbour and partner, in political, economic and security terms”. Sterling rose against both the euro and the dollar as Juncker promised the EU would work “night and day” to reach an agreement, wiping out losses from early

THE TIMES

CHINA FREEZES OUT NEW US BUSINESS AMID TENSIONS

Beijing has suspended licence applications from American companies amid escalating trade tensions. Jacob Parker, of the US-China Business Council, said that he had been told by cabinet-level Chinese officials that the suspension would continue “until the trajectory of the US-China relationship improves and stabilises”.

BA THE WORST POLLUTER ON TRANSATLANTIC ROUTE

British Airways has been named as the most-polluting transatlantic airline, amid concerns over its reliance on “inefficient” long-haul aircraft such as the jumbo jet.

yesterday morning. He added: “In the past months, whenever we needed unity in the union, Britain was at our side, driven by the same values and principles as all other Europeans. This is why I welcome Prime Minister May’s proposal to develop an ambitious new partnership for the future, after Brexit. “We agree with the statement made in Chequers that the starting point for such a partnership should be a free trade area between the United Kingdom and the European Union... The Commission’s negotiators stand ready to work day and night to reach a deal.” Juncker, who Jean-Claude Juncker

THE DAILY TELEGRAPH

FARMERS WARN OF HORSE MEAT RISK FROM REFORMS

Michael Gove’s reforms to agricultural subsidies risks seeing the return of horse meat into the food chain. Minette Batters, the president of the National Farmers’ Union, warned that encouraging cheaper food imports could see horse meat mixed into meat supplies by overseas suppliers.

HAY FESTIVAL DELIVERS £70M LOCAL BOOST

The Hay literature festival delivered a £70m boost to the local economy over the last three years, research revealed. In 2018, the early-summer event generated £25.8m alone, according to analysis by data consultancy QPS.

did not comment on the state of negotiations, stressed that the EU was committed to finding a “creative solution that prevents a hard border in Northern Ireland”, saying the Commission would be “very outspoken should the British government walk away from its responsibilities under the Good Friday Agreement”. The Luxembourgian politician added: “It is not the European Union, it is Brexit that risks making the border more visible in Northern Ireland.” But he also indicated that a key part of May’s Chequers proposal – the Single Market for goods – would not fly. “The UK government must understand that a country leaving can’t be in the same privileged state as a member,” Juncker said. “If you leave the union, you are of course no longer part of our Single Market, and certainly not only in parts of it you choose.”

THE WALL STREET JOURNAL

AT&T EXPECTS BETTER RESULTS NEXT YEAR

AT&T chief executive Randall Stephenson said he expects some divisions’ profitability to improve next year as the telecom company digests its record-setting acquisition of media company Time Warner.

CHIEF EXEC OF MDC PARTNERS STEPS DOWN

MDC Partners has said that Scott Kauffman will step down from his role as chairman and chief executive of the advertising company. The New Yorkbased firm, which owns agencies such as 72andSunny and Crispin Porter + Bogusky has struggled with client cutbacks and a business slowdown.


THURSDAY 13 SEPTEMBER 2018

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European assets managed in UK up 30 per cent JESS CLARK @jclarkjourno ANALYSTS have called for the final Brexit deal to protect the asset management industry as it emerged that the value of investments managed in the UK for European clients increased by 29 per cent last year. A total of £3.2 trillion is managed in the UK for overseas investors, of which £1.8 trillion is from European clients, figures from the Investment Association revealed today. The UK remains the largest centre of asset management in Europe, with its sector bigger than those of Germany, France and Switzerland combined. Investment Association chief executive Chris Cummings said the statistics showed “the urgent need for a Brexit deal to be completed by March 2019 which protects our industry”. The news came as UK-based asset managers pick up the pace with Brexit planning, and begin to strengthen their presence in Europe.

“A good Brexit for the fund management industry would involve some sort of deal which allowed them to continue servicing European clients from the UK,” said Hargreaves Lansdown analyst Laith Khalaf. “In the event that doesn’t happen, it’s likely firms will find ways to sell into Europe, though that may involve setting up businesses on the continent rather than trading across borders.” Luxembourg is set to benefit as firms seek regulatory permissions to continue to trade after the UK leaves the EU in March next year. Jupiter and M&G have both recently bolstered their Luxembourg base. “The softer the Brexit, the less scope for disruption to the existing arrangements in place,” AJ Bell chief investment officer Kevin Doran said. “The immediate priorities ought to be a focus on providing greater clarity around the Temporary Permissions Regime and ensuring a reciprocal arrangement applies to funds operating in the UK.”

END OF THE ROGUE Time running out as Adoboli is transferred before deportation

FORMER UBS rogue trader Kweku Adoboli has been moved to a high-security facility ahead of his deportation to Ghana, as nearly 100 MPs called for the Home Office to reconsider. He has already been detained for 10 days. “Deporting Kweku to Ghana, a country he left at 4, is inhumane and pointless,” tweeted Labour MP David Lammy.

Coutts boss says it will feel only small impact from Brexit result JAMES BOOTH @Jamesdbooth1 THE CHIEF executive of private bank Coutts said yesterday that Brexit would have little impact on the bank or its customers. Coutts boss Peter Flavel said: “The impact [of Brexit] on us as a business is not great,” in an interview on Bloomberg TV. He said the majority of the bank’s wealthy clients were UK-based, with smaller numbers coming from Europe.

He said Coutts also serves 20,000 entrepreneurs who “don’t wait around for politicians to make decisions”. “Quite a lot of them are putting their investment plans to one side until they can see what the decision is,” he said. “Quite a lot of others have simply exited Europe and said ‘we’re not there’.” “A lot of others are already trying to look for markets outside of Europe because they’re entrepreneurs,” he added.

NEWS

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Sorrell squares up with WPP as new firm unveils major expansion plan JOSH MINES @Josh_Mines AD GURU Sir Martin Sorrell yesterday laid out ambitious plans to expand new venture S4 Capital after it starts trading shares later this month, in a move which could step on the toes of his former employer WPP. The founder of the advertising goliath is using a shell company, Derriston Capital, to launch his new

business back onto the market. Shares in Derriston were suspended in May, but after a board meeting on 27 September rubber stamps its reverse takeover of S4 Capital and merger with Dutch digital agency MediaMonks, it will resume trading. Sorrell said S4 had ambitions to provide: “global, multi-national, regional, local clients and influencer-driven millennial brands with new age digital marketing

services” as he gave more details on the new areas it plans to move into. He said the company was looking at “high potential growth territories, such as Germany, India and Japan”. WPP agencies including Kantar and GroupM already operate in data analytics and media planning, so Sorrell’s statement may represent another step into his former company’s territory, despite previous assertions they would not compete.


THURSDAY 13 SEPTEMBER 2018

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REINING IT IN Lloyds announces more job cuts as retail landscape shift continues

DEUTSCHE Bank is considering an overhaul to loosen the bond between its retail and investment banks, according to three people with knowledge of the matter – a move that could make it easier to merge some or all of the group with rivals. The German lender is examining creating a holding company structure, a step that would give it

Risks moving to shadows warns RBS chairman JASPER JOLLY @jjpjolly RISKS to the financial system are being pushed out of the regulated banking sector to less regulated areas, according to the chair of the Royal Bank of Scotland (RBS). Sir Howard Davies highlighted peerto-peer lenders and the shadow banking system as areas where systemic risks could build up, in a speech yesterday at King’s College London. While standards have been raised among banks, “strengthen[ing] the regulated financial system”, the consequent increase in lending by unregulated firms is “pushing risks into the shadows”, he said. “Whenever you squeeze the regulated sector... you create incentives for activities outside the regulated sector,” he added. Davies’ warnings come almost 10 years exactly after the collapse of Lehman Brothers – the point usually thought of as the start of the financial crisis, during which RBS was partnationalised. The bank failures a

decade ago followed a mortgage market bubble, after which exposed lenders took big losses and the interbank lending market froze. “Indebtedness, the total of debt, has continued to go up,” Davies said, with the UK still “addicted to debt”. Money market funds, hedge funds and other asset managers have stepped in to keep debt growing. The total global debt load in the non-financial sector has risen steadily in recent years, reaching 234 per cent of GDP in 2016, according to the latest data from the Bank for International Settlements. The marketing of peer-to-peer lending to retail customers has also proven problematic, Davies said, while also highlighting cryptocurrencies as a potential source of danger. Davies said the British banking landscape will become much more diverse in the coming years, but mergers of the biggest UK lenders are unlikely. He added that it is “difficult to see any merger possibility”, but said “there will be a lot of movement below the top level”.

Perella Weinberg bankers split £16m profits after bumper year JESS CLARK @jclarkjourno BANKERS at M&A advisory firm Perella Weinberg took home a slice of its over-£16m profit last year. Operating profit for last year was £16.4m, almost double the £8.4m reported in 2016, and was divided between eight partners working for the company in the City. The highest-paid partner at the advisory boutique pocketed a £3.2m share of the profits, up from the largest share last year, which was

£1.7m, it revealed in accounts to the end of December 2017. Last year’s deals included advising on the Alstom-Siemens merger, Linde’s merger with Praxair and Caxiabank’s purchase of a stake in Banco BPI. Profits were down by a third in 2016, from £11.5m in 2015, after the firm missed out on roles advising on some of the biggest European mergers. In April, Perella Weinberg announced it was planning to open an office in Paris.

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Deutsche Bank weighs restructuring plan that could facilitate new deals ANDREAS FRAMKE

LLOYDS Banking Group announced the closure of another 15 branches yesterday as the steady whittling down of the British retail bank network carries on. There are 23 jobs at risk, with Lloyds aiming for no workers to leave via compulsory redundancy.

NEWS

more flexibility to strike merger deals, as it seeks to regain its footing following several years of heavy losses and multi-billion-dollar penalties. The possibility is likely to be discussed at a meeting of management later this week in Hamburg, other people familiar with the matter told Reuters, as the bank’s new chief executive, Christian Sewing, sets a new course for the

struggling lender. “I gravitate to the holding structure,” said one of the people with direct knowledge of the debate. Deutsche Bank declined to comment. The structure, which would act as an umbrella over separate entities including its investment and retail banks, would see Deutsche following the example of US rivals. No decision Reuters has yet been made.


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US insurance sector could take $20bn Perfect storm in losses from Hurricane Florence CALLUM KEOWN @CallumKeown1 HURRICANE Florence could cost the insurance industry more than $20bn (£15.33bn) as millions of people and businesses begin evacuating from the east coast of the US. The storm could hit North and South Carolina later today and cause devastation along the coastline. Catastrophe risk modelling

company, Risk Management Solutions, said the category 4 storm could cause covered losses of $15bn–20bn based on historical hurricanes and the present day make-up of property and businesses along the coastline. The company warned that estimate did not include the flooding potential of the impending storm. The most recent category 4 storm

to hit the area – Hurricane Hugo – caused $20.5bn in damage when translated into present day values. JP Morgan’s property and casualty insurance team estimated insurers could lose $8bn-20bn, while some analysts said the figure could exceed $20bn. The insurance sector on the S&P 500 dropped 0.5 per cent yesterday and has dropped by around 1.5 per cent since Monday.

pushes oil over $80 per barrel CALLUM KEOWN @CallumKeown1 OIL PRICES have risen above $80 per barrel for the first time since July as US crude inventories dropping, impending sanctions against Iran, and Hurricane Florence created a perfect storm. The price of Brent crude oil rose to $80 per barrel yesterday, its highest since the middle of July and close to a three-year high. The Energy Information Administration said US crude oil inventories had dropped by 5.3m barrels last week, contributing to the rise. The threat of sanctions looming over the Iranian oil sector and an impending hurricane expected to hit the US east coast as early as today also drove the price up. More than a million people, as well as businesses, have already begun evacuating following a national weather warning. Hurricane Florence, expected to be

the most powerful storm to hit North and South Carolina in almost 30 years, is not expected to affect production but the evacuation of more than a million residents could lead to a short-term spike in demand. The Organisation of the Petroleum Exporting Countries cut its forecast for oil demand growth in 2019 in its monthly report and said that challenges in emerging countries could hinder global economic growth. Phil Flynn, an analyst at Price Futures Group, said: “A drawdown in crude oil inventories isn’t very comforting when you’re going to lose a lot of Iranian crude in a couple of weeks.” Research group JBC Energy said: “Iran is increasingly becoming the preoccupation of the crude market. The last couple of weeks have seen the expected squeeze on Iranian crude flows taking shape, with overall outflows down markedly.” Russian energy minister Alexander Novak yesterday warned of the impact of US sanctions against Iran.

VLAD THE IMPLORER Russian President calls for Salisbury attackers to speak out

VLADIMIR Putin has encouraged two Russian men allegedly sent to kill former Soviet military officer Sergei Skripal to defend themselves publicly, saying the men identified by the UK are “civilians” and claiming “there is nothing criminal here”.

Top bosses believe that Brexit should simply be scrapped CATHERINE NEILAN @CatNeilan LEADERS of some of the UK’s biggest companies, including banks RBS, HSBC and TSB, have spoken out about their fear of a hard Brexit. A poll of 100 business leaders at Tuesday’s annual Odgers Berndtson dinner for chairs and chief executives found that just one per cent believed a deal akin to that touted by the Economists for Free Trade this week would be good for their firms.

More than half (57 per cent) of the top UK bosses, representing groups such as Sainsbury’s, BT, Aon and Dixons Carphone, said they were not confident about the medium-term economic outlook. Three per cent described themselves as “terrified”. Some 53 per cent of executives said they wanted to stop the Brexit process altogether, while 41 per cent stressed the need for a transition. Three-quarters said that a hard Brexit or leaving without a deal would impose “material disruption and cost” to their businesses.


THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

ELECTION MEDDLING Trump signs order to sanction foreign interference in voting

@city_amrogers CROSSRAIL chairman Terry Morgan has said he will not step down in the wake of the nine-month delay to the Elizabeth Line. The £15.4bn project was scheduled to open in December this year, but its launch has been pushed back until autumn 2019 following delays to signalling testing and safety

Ryanair warns of grounded flights with hard Brexit

ALEXANDRA ROGERS

@city_amrogers RYANAIR’S chief executive Michael O’Leary has ramped up his warnings about a hard Brexit, saying the UK had received “no assurances” from the EU that flights could continue after Britain leaves the bloc. At a press conference yesterday, the colourful chief executive said the transport secretary, Chris Grayling, had received “no assurances” from the EU on continued flying, and claimed that the likelihood of a no-deal Brexit was growing. “If it’s not a 21-month transition period, the thing that is not being well explained by the Brexiters is that flights to and from the EU will be stopped in a hard Brexit,” O’Leary told reporters. “Chris Grayling has yet to explain

what else is going to be put in its place.” While he said he was confident the UK would reach a deal with the EU on flying rights, he said it would not be in time for April next year in the event of no deal being struck. O’Leary warned earlier this year that flights could be grounded in March 2019, the deadline for when the UK leaves the EU. If that happened a no-flights scenario would last no longer than “two days or two weeks” because it would be “politically unsellable”, he claimed. A Department for Transport spokesperson said: “Aviation is absolutely crucial to the UK’s economy and we are committed to getting the best deal possible for Britain. “We believe that it is in the interests of both sides to ensure continuity – but it is only sensible to prepare for a range of scenarios.”

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ACCA There is an important role for new city mayors to play in Britain HELEN BRAND ON THE POWER OF DEVOLUTION PAGE 15

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Crossrail boss will not step down despite delay to Elizabeth Line ALEXANDRA ROGERS

IN A MOVE intended to protect the United States from interference in elections, US President Donald Trump set out a process to punish foreign groups that attempt to interfere. Sanctions could include freezing assets and limiting access to US business.

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concerns. The delay was roundly criticised by business groups and leaders who received assurances from Crossrail that the project would be delivered “on time and on budget”. Transport for London’s (TfL) commissioner Mike Brown admitted the transport body would miss out on £20m of additional revenue. Chair of the London Assembly transport committee, Caroline

Pidgeon, yesterday asked Morgan if he had reconsidered his role in light of the problems, to which he replied: “My determination is to finish the job.” He added that he had not come under any pressure to leave his post. Heidi Alexander, the deputy mayor for transport, said she was not informed of delays until August, and that there had been “undue optimism” at Crossrail regarding the December 2018 deadline.


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THURSDAY 13 SEPTEMBER 2018

Rents set to rise amid lull in new houses on offer SEBASTIAN MCCARTHY @SebMcCarthy LONDON rents are projected to creep back up following months of decline on the back of growing tenant demand and a drop in the number of properties coming onto the market. According to a closely-followed survey from the Royal Institution of Chartered Surveyors (Rics) out today, five per cent more respondents expected rents to rise rather than fall over the three months ahead. The forecast is driven by the fact that 19 per cent more respondents saw a drip rather than rise in property being put on the rental market over the month, while 35 per cent more saw a rise as opposed to a fall in tenant demand. Brian Murphy, head of lending at the Mortgage Advice Bureau, said: “On the lettings side, the lack of new landlord instructions as reported by Rics is, one might suggest, a double-

edged sword; good news for those investors who still have ‘skin in the game’, however potentially not so positive for tenants given the increasing lack of choice and upwards pressure on rents.” The survey also underlines the increasing gap in house prices across the country, with the London market remaining “downbeat” while Scotland and Northern Ireland show a “healthy market”. Simon Rubinsohn, Rics chief economist, said: “It is clearly very difficult to talk about the housing market at the moment without being acutely aware of the marked differences in trends across the UK. As the latest Rics results highlights, in many parts of the country the housing market actually remains quite firm.” He added: “While a combination of a lack of stock and some level of uncertainty... has had an impact on activity, the overall picture in these areas is still encouraging.”

CITYAM.COM

TAKING FLIGHT British Airways on verge of £4bn deal to insure pension liabilities

EU Parliament backs divisive copyright rules JOE CURTIS

AIRLINE British Airways is close to closing a buy-in deal to insure more than £4bn of its historical pension liabilities, Sky News reported. Trustees of the BA-sponsored Airways Pension Scheme (APS) are reportedly near to a deal with Legal & General.

Spirits in the sky: Wetherspoons’ Brexiteer boss to scrap EU booze SEBASTIAN MCCARTHY @SebMcCarthy WETHERSPOONS will ditch European spirits such as Jaegermeister for nonEU equivalents in a bid to lower prices across its 880 UK pubs. Its pro-Brexit boss Tim Martin told City A.M. “there will definitely be more steps in this direction.” Replacing the ousted continental

brands, which also include several French brandies, will be US drink E&J Brandy, Australia’s Black Bottle and Strika, a herbal liqueur produced in England. Martin added he thought Prime Minister Theresa May was a “hopeless” negotiator. Lending his support to Boris Johnson, he said: “Providing he [Johnson] stops putting it about so much, he’s got my vote.”

@joe_r_curtis THE EUROPEAN Parliament yesterday voted in favour of copyright reforms that could dramatically change the fortunes of both artists and businesses. The rules, which will force tech giants to pay for the work of artists and journalists that they use, passed by 438 votes to 226, with 39 abstentions. MEPs voted for amendments to the original directive that force online platforms to pay creators to link to their content, even if they are only using “snippets”. The Copyright Directive will not affect Wikipedia, and open source platforms such as software codesharing site Github. Vice-president for the Digital Single Market, Andrus Ansip, and commissioner for the digital economy and society, Mariya Gabriel, called the vote “an essential step” to modernise copyright rules in the EU. However, critics called the vote “hugely disappointing”, with technology industry trade body TechUK claiming it “represents a setback”.

Profits bounce back at Galliford Try Goals scores a rebound but Aberdeen bypass woes loom large despite tough season SEBASTIAN MCCARTHY

10.51%

@SebMcCarthy GALLIFORD Try yesterday posted a 145 per cent profit rise over the last 12 months, in a sign that the construction group is recovering from a series of setbacks it suffered earlier in the year. Pre-tax profits jumped from £58.7m to £143.7m in the year leading up to the end of June 2018. Government incentives such as

Help to Buy and the cut in first-time buyer stamp duty have both helped the FTSE 250 firm bounce back after a challenging start to the year, when it was hit by a spate of poor weather and the liquidation of Carillion. However, the group has taken an additional £20m hit on its flagging Aberdeen bypass venture, which it had been jointly contracted to build with Carillion, taking the firm’s losses on the project to £45m for the full financial year.

Galliford Try boss Peter Truscott said: “The underlying construction business performed well and continues to see a pipeline of suitable opportunities. We have made good progress towards completion of the [Aberdeen Bypass] contract, with significant sections of the road open to traffic and the final section expected to be open by late autumn 2018.” Shares closed up more than 10 per cent in trading yesterday.

CALLUM KEOWN @CallumKeown1 FIVE-A-SIDE football operator Goals Soccer Centres has recovered from bad weather and a slump during the World Cup in its recent trading. The company, which operates 49 sites, including three in the US, said it swung to a £1.1m loss in the first half of the year – compared with a £2.6m profit the previous year as bad weather led to many games

being re-scheduled. Sales declined by 2.8 per cent to £16.2m for the six months ending 30 June. Goals said snow hitting the UK in the early part of the year meant amateur 11-a-side games were moved to midweek slots, when players normally played five-a-side, carrying the problems over into the second quarter of 2018. The Scottish firm said it had seen improved performance in recent weeks.

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NEWS

Carlyle Group buys insurance SSE posts profit The service firm Sedgwick for $6.7bn warning after hot weather losses JESS CLARK

JOE CURTIS @joe_r_curtis SSE DELIVERED a profit warning yesterday, sending shares plunging eight per cent as it blamed a combination of warm weather and higher-than-expected gas prices. Operating profit for the first five months of the year will be £190m lower than predicted, SSE said in a trading update. SSE expects its profit for the six months ending 30 September to be only around half the £586.2m it delivered in the same period of 2017, itself an eight per cent reduction on the year before. CEO Alistair Phillips-Davies called the news “disappointing and regrettable”. While retail and networks revenues are

anticipated to remain flat, SSE expects its wholesale energy arm to post a loss, with its energy portfolio management division falling £100m into the red and a drop in profits predicted for its generation business.

@jclarkjourno PRIVATE equity firm The Carlyle Group has acquired US insurance claims service provider Sedgwick for $6.7bn (£5.1bn). Current majority shareholder KKR will exit the group and Stone Point Capital, CDPQ and Sedgwick management will remain minority shareholders when the deal closes

later this year. Sedgwick currently handles more than 3.6m claims a year, which are worth more than $19.5bn in total. The Carlyle Group managing director and head of healthcare Stephen Wise said yesterday: “Dave North and Sedgwick’s world-class management team have built the company into an industry leader over the last two decades.

“We are excited to collaborate with Sedgwick, which has distinguished itself by constantly improving the claims management and loss adjusting process to the benefit of all key stakeholders, including its colleagues, customers, insurance companies and brokers.” Equity capital for the investment will come from Carlyle Partners VII, an $18.5bn fund.

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THURSDAY 13 SEPTEMBER 2018

Bank of England to hold policy on Brexit approach JASPER JOLLY @jjpjolly CITY economists are all-but-certain that the Bank of England will hold interest rates steady today, only six weeks after raising interest rates and with the Brexit endgame fast approaching. The Bank’s rate-setting Monetary Policy Committee (MPC), led by governor Mark Carney, whose term was extended until 2020 this week, will announce its latest decision at midday, with all eyes on any tweaks to guidance on the future path of interest rates. Carney is expected to lead a unanimous vote to hold policy, as reflected by our shadow MPC. Data since the MPC last met has for the most part strengthened the Bank’s justification for raising interest rates, with regular pay growth accelerating to the joint fastest annual rate since 2015, at 2.9 per cent. Mean-

while, July growth figures showed a stronger-than-expected expansion in output from the UK economy. Economists will read the MPC’s statement closely for guidance on spare capacity in the economy. Meanwhile, a message that inflation will accelerate further would likely be taken as hawkish by investors. The MPC was criticised in August for raising bank rate, the rate at which it lends to banks, to 0.75 per cent, with business groups concerned that a higher cost of borrowing could be damaging amid continued uncertainty on how trade will function after the UK leaves the EU on 29 March 2019. The Bank has warned repeatedly that a no-deal Brexit, in which EU-UK trade defaults to World Trade Organization terms overnight, would be highly damaging to the British economy – in line with the vast majority of economists.

CITY A.M.’S SHADOW MONETARY POLICY COMMITTEE OUR MPC VOTES UNANIMOUSLY TO HOLD OUR PANEL’S GUEST CHAIR FOR THIS MONTH: JEAVON LOLAY LLOYDS BANK COMMERCIAL BANKING HOLD Data since the August meeting has been broadly in line with the latest economic projections. In particular, GDP growth has rebounded and consumer price index (CPI) inflation was slightly higher in July, at 2.5 per cent. Furthermore, labour market figures suggest the economy has a very limited degree of slack, with average earnings growth noticeably higher in the three months to July. After last month’s increase in bank rate to 0.75 per cent, should the economy continue to develop in line with the Bank’s inflation report projections from August, further increases are likely in the future to return inflation sustainably to the two per cent medium-term target.

SIMON WARD JANUS HENDERSON INVESTORS

JACOB NELL MORGAN STANLEY

HOLD Growth was boosted by weather effects. Money trends remain soft and the global economy is slowing. Faster pay growth is likely to squeeze profits rather than boost inflation.

HOLD While letting the impact of the recent August hike sink in and against the backdrop of Brexit endgame uncertainty, keep rates on hold until we have more clarity.

VICKY PRYCE CEBR

RUTH GREGORY CAPITAL ECONOMICS

HOLD Activity and wages have picked up but manufacturing is in recession, business confidence is still weak, and growth forecasts continue to be downgraded on Brexit uncertainty.

HOLD While the economy regained some momentum at the start of the third quarter and earnings growth gathered pace, ongoing Brexit uncertainty provides a good reason to sit tight.

KALLUM PICKERING BERENBERG

SIMON FRENCH PANMURE GORDON

HOLD Although recent wage and consumer spending data have surprised to the upside, it’s sensible to wait until after the UK leaves the EU on 29 March before hiking bank rates again.

HOLD There is considerable uncertainty whether economic momentum held up in August. Inflation expectations also remain well-anchored around two per cent. Wait and see the Brexit outcome.

TEJ PARIKH INSTITUTE OF DIRECTORS

MIKE BELL JP MORGAN ASSET MANAGEMENT

HOLD Businesses and households will be looking for stability and support as Brexit negotiations go to the wire in the next few months. Now’s not the time for boat-rocking.

HOLD There’s no need for another rate hike so soon after the last one. It’s worth keeping an eye on wages though, with unemployment at such historically low levels.


THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

Erdogan flexes exec powers with wealth fund role CALLUM KEOWN @CallumKeown1 TURKISH President Recep Tayyip Erdogan has appointed himself chairman of the country’s sovereign wealth fund as he extends the executive powers of his presidency. Erdogan also named finance minister Berat Albayrak – his son-in-law – as his deputy in the role. He criticised the multi-billion-dollar Turkey Wealth Fund last year, dismissing its head Mehmet Bostan and calling for a complete reorganisation.

Erdogan became the country’s first ever executive president following his election win in June. The $50bn (£38.4bn) wealth fund, formed in 2016, has stakes in Turkish Airlines, state oil and pipeline companies,

CALLUM KEOWN @CallumKeown1 EU LAWMAKERS have voted in favour of action against Hungary for eroding democracy. The European Parliament backed a motion that could lead to sanctions against the country after growing concerns over the state of its democracy and rule of law. A report by Dutch MEP Judith

Sargentini found Hungarian Prime Minister Viktor Orban’s attacks on the judiciary, the media, migrants and refugees posed a “systematic threat” to the EU’s principles. The Article 7 motion passed with 448 votes in favour, 197 against and 48 abstentions, the first time the procedure has been used against an EU member state. It will now pass to the leaders of

Erdogan, 64, has been the President of Turkey since 2014 and Turkey’s stock exchange, among others. The Turkish lira gained against the dollar yesterday ahead of a decision by the country’s central bank today over whether to hike interest rates.

Assessing apprenticeships in the City

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The City of London Corporation has published the results of a new survey into how London’s Financial and Professional Services firms are using the apprenticeships levy.

The City Corporation can offer advice on how to make apprenticeships work for firms: cityoflondon.gov.uk/ apprenticeshipsinthecity

Food for thought YOU can leave your packed lunch at home today as the historic Guildhall Yard is once again hosting its monthly Lunch Market.

From Greek wraps to American burgers, Italian meatless meatballs to Ethiopian vegan food, there is something for everyone to enjoy. And if you have still

Whatever your savings are for, we’ll help you to make the most of them. At Skipton we have a wide range of savings products to suit a variety of needs. It’s why generations have trusted us since 1853.

From 12noon to 2.30pm more than 20 stalls will be serving up mouth-watering cuisine from around the world to offer a change from the usual sandwich options. have room for dessert, there are plenty of sweet treats on offer.

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skipton.co.uk/save

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MEPs set course for sanctions on Hungary in move against Orban

City of London update

50% of businesses said the levy has incentivised them to look at apprenticeships as a new recruitment and development option; 59% expect the number of apprentices they hire in the next 12 months to increase; However 63% of businesses do not expect to use their full levy payments before they expire; and 48% of firms who pay, but do not use the levy, reported that the system is too complex.

NEWS

the bloc’s 28 member states for approval and could result in Hungary’s voting rights being suspended and sanctions imposed. Orban is leader of Hungary’s national-conservative Fidesz party, and has been Prime Minister since 2010. His advocacy for an “illiberal state” and attacks on state institutions have alarmed many international observers.


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NEWS

THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

Sales creep up at Zara owner Inditex as it anticipates second-half boom JOSH MINES @Josh_Mines THE SPANISH owner of high street store Zara, Inditex, yesterday reported a steady increase in sales in the first half of the year. The world’s biggest clothing retail group said sales rose three per cent in the first six months of 2018, just surpassing €12bn (£10.7bn) for the first time.

Net profit beat first half records, topping €1.4bn, a three per cent yearon-year increase. It said Zara’s autumn/winter collections including products like printed dresses and corduroy coats had been well received by customers, as it told investors it would boost profitability in the second half. The company, which also owns upmarket brand Massimo Dutti and underwear label Oyshow, is

controlled by Europe’s richest man, Amancio Ortega. It has had a difficult year so far, with stocks down by 12 per cent, taking a big hit in August when Morgan Stanley slapped it with an “underweight” rating for the first time in the bank’s 17-year history of covering the stock. The results also follow Inditex saying it would sell all of its brands online globally by 2020.

Luxury fashion group Hermes has expanded its workforce and opened new stores

EAT, VOTE, ENJOY

Hermes bags a record margin from Asia boost JOE CURTIS @joe_r_curtis HERMES delivered a record operating margin for the first half of 2018 yesterday, as well as posting a 17 per cent jump in profit to reach €708m (£631m). The French luxury handbag maker saw group revenue rise by five per cent year-on-year to €2.9bn for the six months ending 30 June, and its recurring operating income by six per cent to hit €985m, or 34.5 per cent of sales. Operating cash flow grew to €849m, enabling the firm to finance €120m of capital expenditure, while net cash stood at €2.7bn, down slightly on its €2.9bn treasure chest at the end of 2017 after paying a €521m dividend. It also paid €51m to redeem 88,000 shares. Revenue increased in all regions for the firm, which sells handbags in the region of £8,000. Demand in China pushed its performance in Asia up 15 per cent, where consumers are considered key drivers of the luxury handbag

business, accounting for a third of industry sales. Meanwhile Japan rose seven per cent. America also scored 12 per cent growth, with Hermes opening its 34th US store in Silicon Valley. Closer to home, France achieved an eight per cent increase with the rest of Europe not far behind, at seven per cent growth. It continued to grow its workforce, adding 280 employees over the first half of the year to a headcount of 13,764 in total. Axel Dumas, chief executive of Hermes, said: “Hermes achieved an exceptional performance in the first half of the year. “Our commitment to the quality of know-how, the spirit of innovation as well as the creativity, always renewed, and the dedication of the women and men of Hermes, base the singularity and the integrity of our economic model; a strong model in a worldwide context that remains uncertain and unstable.” Many luxury brands have reported strong results this year on the back of high Asian sales.

Chief exec of online plus-size retailer N Brown to step down JESS CLARK

The Eat Game Awards dinner will be held at Boisdale of Canary Wharf on 9th October 2018. Vote for your favourite game heroes and book your tickets now on

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@jclarkjourno DIGITAL fashion retailer N Brown Group has announced chief executive Angela Spindler will step down at the end of the month. Current chief executive of the firm’s financial business, Steve Johnson, will step into the job until a permanent replacement is found. The online outlet, which stocks plus-size brands such as Simply Be and Jacamo, said Spindler had led the business through a period of

significant change since she took on the role in July 2013. She previously held senior roles at Coca-Cola, Mars, Asda, Debenhams and the Original Factory Shop. Group chairman Matt Davies said: “We recognise that now is an appropriate time to search for a new leader who can take the business forward through the next phase of its development.” Davies said Spindler had to “contend with significant legacy issues and a challenging retail backdrop” during her tenure.


CITYAM.COM

THURSDAY 13 SEPTEMBER 2018

John Laing fund issues shares to raise £100m JESS CLARK @jclarkjourno INFRASTRUCTURE investment group John Laing is raising up to £100m for its environmental assets fund in order to target further diversification, it announced yesterday. Recent acquisitions of three anaerobic digestion projects, representing 17 per cent of the fund’s portfolio, were made using the company’s revolving credit facility – which is now “substantially drawn down”, it said. Money raised will allow the fund to pay the revolving credit and invest in future opportunities across anaerobic digestion – which is the breakdown of biodegradable material to produce biogas – waste-to-energy assets and biomass plants to further diversify income streams. It is targeting £50m, but could raise up to £100m through a share placing, subscription and intermediaries offer at a issue price of 102p per share. John Laing Capital Management director Chris Tanner told City A.M: “We’re targeting £50m in response to recent success that we have had in the anaerobic digestion sector, as we have made a number of investments in that space. “It’s a diversified fund across wind,

solar, waste and water and now anaerobic digestion, so that there’s the broadest spread across renewables. “The fund benefits from the diversification as we are not reliant on any one energy resource, the wind blowing or the sun shining.” “If you think about this summer, it has been good for solar but wind speeds have been right down, but back in 2017 it was the opposite,” he said. “Anaerobic digestion just increases that diversification of risk and the returns are higher than for wind and solar as well.” The fund investment policy is to invest in “projects with long-term, predictable, wholly or partially inflation linked cash flows supported by long-term contracts”.

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@SebMcCarthy THE NUMBER of homeowners remortgaging their houses spiked to its highest level in more than a decade in July, amid a rush to lock in fixed-rate mortgage deals before the latest Bank of England rate rise. Roughly 46,900 new homeowner remortgages were completed in July, rising 23.1 per cent compared with the same month a year earlier, according to UK Finance data out yesterday. First-time buyer mortgages

completed in July also edged up one per cent to 31,400, underlining evidence that the market for buyers looking to get on the property ladder has returned to modest yearon-year growth. The statistics suggest that the rise in remortgages jumped in the run-up to the Bank of England’s decision in early August to raise the interest rate from 0.5 per cent to 0.75 per cent – the highest level since March 2009. Mike Scott, property analyst at estate agent Yopa, said: “This is the strongest remortgaging market for

JOSH MINES

Home furnishings company Dunelm has 150 stores in the UK

Dunelm simplifies business to compete with online retailers CALLUM KEOWN

11.86%

@CallumKeown1 HOMEWARE retailer Dunelm will simplify its business following a “difficult and disappointing” year, which saw profits fall nearly seven per cent. The company said revenue for the year ending 30 June was £1.05bn – 10 per cent up on the previous year (£955.6m). But its underlying profits of £102m were 6.7 per cent down on the year to 1 July 2017. Home delivery sales growth as a

result of online purchases was up following its acquisition of online retailer Worldstores. Dunelm is the latest in a number of retail firms to find 2018 tough going, blaming its issues on the “challenging” retail environment. Its acquisition of online retailer Worldstores also hit its profits. The company said it had taken steps to “simplify”, with one web platform and an integrated supply chain, to allow it to adapt and compete with online retailers. Its share prices closed up almost 12 per cent at 570.5p.

a decade, presumably driven by borrowers who want to lock into current low interest rates before they rise further. However, this is unlikely to have much effect on the housing market, since it’s not money that will be used for buying a house.” Kevin Roberts, director of Legal & General Mortgage Club, added: “Increased innovation coupled with competitive solutions continues to drive the mortgage market forward, with the number of products surpassing 5,000 for the first time in over a decade.”

Troubled HS2 pledges 15,000 jobs by 2020 in skills strategy

Vodafone ads banned by watchdog over misleading claims

ALEXANDRA ROGERS

JOSH MINES

However, the government admitted earlier this month that the second phase of the project, which links Birmingham to Leeds and Crewe to Wigan and Manchester, will be delayed because the bill allowing the line to be built will not be tabled until 2020. The Department for Transport said the overall deadline of 2033 will still be hit. The jobs boost comes as HS2 announces its skills strategy, which it says will deliver a pipeline of jobs in the UK.

@Josh_Mines VODAFONE ads featuring actor Martin Freeman were yesterday banned by the industry watchdog for including misleading claims about broadband speeds and bill reductions. The TV and radio ads claim: “Vodafone guarantee your home broadband speeds or money off until it’s fixed.” Consumers and rival telco BT challenged the claim, saying it could not be substantiated.

@Josh_Mines SHARED office provider IWG said yesterday its chief financial and operating officer Dominik de Daniel will leave the company to pursue other opportunities. The FTSE 250 firm ended speculation over a potential takeover last month, halting talks with suitors and sending shares toppling. The Regus owner said it had appointed Eric Hageman as interim chief financial officer. Hageman has experience as head of finance at a number of listed companies, including TeleCity Group. De Daniel’s exit also follows the firm issuing a profit warning in June, saying the cost of new sites and a downturn in its British business due to Brexit uncertainty had hit the company. Doug Sutherland, chairman of IWG, said: “On behalf of the board I would like to take this opportunity to thank Dominik for his leadership and significant contributions during his time at IWG. “Completing his third year, Dominik leaves the group with a strong balance sheet to support our growth ambitions.” De Daniel said: “IWG has a bright future in what has become a hugely exciting growth sector. IWG’s market-leading position, unique national networks and global footprint, coupled with recent investments, will allow the group to further realise its full potential.”

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@LMAPPEAL #CGD #GoRed #peoplematter

Supporting City Giving Day Why are you supporting CGD? Investec has always wanted to live ‘in’ and not ‘off’ society. Our core values include making an unselfish contribution to the community, nurturing an entrepreneurial spirit, embracing diversity, and respecting others. City Giving Day is another opportunity for us to live these values.

Which charities do you support?

@city_amrogers UNDER-FIRE high speed rail line HS2 has said it will create 15,000 UK jobs by 2020 at 30,000 at “peak construction”. The company said the £56bn project, which will link London to the north, has already supported over 7,000 roles and awarded 2,000 businesses with work. The first phase of the project, linking London to Birmingham, is due to open in December 2026.

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IWG financial chief exits after halted takeover

Remortgaging hits 10-year high SEBASTIAN MCCARTHY

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We partner with community charities and organisations local to our offices. We focus our efforts in three areas: education,

entrepreneurship and the environment. In London we work with Arrival Education, Morpeth School, Trees for Cities, and the Bromley by Bow Centre – with whom we run our flagship programme, Beyond Business, a social enterprise incubator.

How will you celebrate CGD? This year we’re celebrating 10 years of partnership with Arrival Education and the Bromley by Bow Centre. We’ll host students and entrepreneurs from the programmes we run together for a fun and interactive day at our offices. Last year our people used 4,400 paid hours to volunteer with our UK community partners. With this event, we hope even more people will sign up!

CHARITY IN ACTION Through Beyond Business, we’ll help launch five new social enterprises on City Giving Day, contributing to economic regeneration and providing jobs in some of London’s most deprived areas

The partnership we have with Investec is extraordinary. It goes way beyond the parameters of a normal charity-corporate relationship. Instead, it focuses entirely on building long-term sustainable change. Rob Trimble, CEO of the Bromley by Bow Centre

JOIN US AND REGISTER NOW AT

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THURSDAY 13 SEPTEMBER 2018

Rolls-Royce shares dip after plane engine fails WHISKY INVESTMENT: ROLL OUT THE BARREL Richard Ellis discusses the current shortage in supply due to the significant growth in demand for whisky

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ollowing on from last week’s dip into the world of premium spirits investment, we’re taking the full plunge this week. For those for whom a bottle, or even a case of great whisky is not enough, there is a more alluring option available: buying a whole cask. Whilst there are over 200 million casks of maturing whisky in Scotland, only a small proportion are single malt – the most valuable and sought-after production style. Given the period of time it takes to mature a fine malt before it is ready either for release or addition to a premium blend the market is naturally susceptible to swings in availability; there is currently a shortage of supply due to the significant growth in demand for whisky both in the context of cocktail culture and luxury collectables. Exports of Scotch reached record highs in 2017, with a strong combination of desire for ultra-premium whiskies and rapidly growing demand from Asia. In fact supplies of single malt whisky are running at their lowest level for years with older whiskies (10 years +) particularly hit. The impact of this demand on distilleries has led to an increase in the amount of spirit produced – but there is a key funding gap. The maturing spirit isn’t officially classified as whisky until it reaches 3 years of age and as we know, casks destined for serious whiskies will need to remain in stasis for considerably longer than that. Generally speaking, there are three opportunities to invest in the maturing whisky cask market: newmake spirit (less than the legal minimum age of 3 years), 3 years +, and 10 years+. Whilst age doesn’t always equate to higher quality, the naturally slow and occasionally unpredictable process of maturation does require a degree of flexibility in the investor. Furthermore, one must consider ‘the Angel’s Share’: a maturing cask of whisky will lose an average of 1-2% volume annually through evaporation. Those looking to turn a relatively fast profit at a moderate investment value

Single malt whisky is the most valuable and sought-after could look to new-make spirit. Typically the distiller will buy casks back after they reach the minimum 3 years of ageing. This can be offered by large established distilleries as well as exciting new producers looking to get a new whisky off the ground, so the choice depends on your risk/reward appetite. After 3 years of age, casks which have not immediately made their way into a young blend are most likely destined for 8-10 years’ ageing, or more. After a flat period, demand begins again for casks approaching 10 years of age and thus an inflexion point is reached where the investment outperforms. Casks which have not been used post-10 years of age may well be destined for 18, 25 year or even older malts – or may even make special single-cask bottlings in their own right. These are of course fewer and further between and require a considerably greater initial investment; however the alpha opportunities are considerable. The best cask of the most sought-after distillers can reach seven figures! As with all investments, a specialist is required to give the right level of service and advice. Both the initial sourcing and a thoroughly thought out exit strategy are key, not to mention the importance of understanding when to buy and sell. Outsize value potential is only possible if the stock selection, selection and distribution are correctly managed. £Richard Ellis is Head of Spirits, BI Wines and Spirits Ltd

INDEXED VALUE OF A SINGLE CASK FROM NEW TO 10 YEARS* 350 300 250 200 150 100 50 New make 3 years 10 years 5 years * Initial investment £1233.64. Values rebased to 100 after all costs. Analysis illustrative only

JESS CLARK

1.09%

@jclarkjourno SHARES in Rolls-Royce fell yesterday following a technical failure that forced a pilot to carry out an emergency landing on a flight from New York to Madrid. The engine manufacturer said Iberia Airlines flight 6252 landed safely at Boston Logan airport after the pilot had to abandon the trip around 90 minutes after take-off from John F Kennedy Airport. Traders responded to safety concerns as shares fell by more than four per cent, which was the biggest fall in more than a year. Shares dropped from 973.8p to a low of 928.8p early yesterday

before recovering to 964.4p when markets closed. The British company said it had not yet received any feedback on what went wrong with the engine. A Rolls-Royce spokesperson said: “We are aware of the issue and will be working closely with the airline to support them. “The Trent XWB has enjoyed the smoothest entry into service of any widebody engine and we continue to see the engine achieving market-leading levels of reliability.”

Rolls-Royce said it was a “normal” in-flight shutdown carried out by the crew, although such events are “incredibly rare”. It added that the type of engine, a Trent CXWB, had been operating for a total of 2m flying hours The Trent CXWB engine had to be shut down on the flight yesterday without any shutdowns. The fault was not related to troubles with the Trent 1000 engine, discovered to have durability issues after around 160 models were found to have cracked.

SUPER-CHARGED Superdry nabs former Tommy Hilfiger executive SUPERDRY has hired former Tommy Hilfiger executive Brigitte Danielmeyer, as the fashion label looks to expand its brand digitally and develop new ranges. Danielmeyer was global head of womenswear at Tommy Hilfiger for four years to 2016. She has also held executive roles at Esprit, and was most recently at Liebeskind Berlin. The new role of chief product officer has been created for her as Superdry signals its intent to strengthen its brand image and drive “creative innovation” in the business. Supergroup chief executive Euan Sutherland said the company would still be delivering products at price points that “can’t be matched”.

VW boss refuses to testify in shareholder case on emissions

Carlyle teams up with Investindustrial for £500m design group

ILONA WISSENBACH

FRANCESCA LANDINI

FORMER Volkswagen (VW) chief executive Martin Winterkorn and Bosch boss Volkmar Denner are no longer expected to testify in a trial brought against VW’s main shareholder Porsche SE by investors, according to a judge. Most of the two dozen witnesses called in the case have invoked their right to refuse to give evidence, judge Fabian Richter Reuschle said in the opening of the trial in a regional court in Stuttgart. “We have to accept that we cannot force them to incriminate themselves,” Richter Reuschle said, adding the trial dates set aside for witness testimony through mid-November had been cancelled. Shareholders represented by law firm TILP are seeking

compensation from Porsche SE, alleging the company did not inform markets quickly enough about the scale of potential liabilities VW faced over its use of illegal software to cheat US emissions tests, disclosed in September 2015. The start of proceedings in Stuttgart comes two days after a separate investor suit launched in the northern German city of Braunschweig, in which the plaintiffs are seeking billions of euros in damages from VW itself as well as from Porsche SE. VW has admitted to cheating diesel emissions tests, but denies it failed to inform investors in a timely fashion. Bosch supplied key parts for VW’s diesel engines, but says the integration of them was the responsibility of the Reuters manufacturer.

PRIVATE equity firms Investindustrial and Carlyle Group have joined up to create a high-end interior design group, with total sales of more than €500m (£445.39m). The venture will target both expansion for the existing brands and the acquisition of new ones. In a joint statement, the Italy and US-based firms said the group would initially consist of furniture maker B&B Italia together with Flos and Luis Poulsen lighting. The companies, which are owned by Investindustrial, boast products such as B&B Italia’s armchair “Up”, designed by artist Gaetano Pesce. All three companies will be transferred to the new group, in which investment bodies controlled by Carlyle and Investindustrial will own equal Reuters stakes.


THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

FEATURE

15

ACCA

MAYOR POWER Helen Brand explains why devolution is good for the country

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ITH the distraction of Brexit, one could be forgiven for believing that devolution policy has been dormant since 2016. Indeed, as Westminster negotiates feverishly for optimal European and international status come 30 March, it can seem that domestic policy has been effectively on hold since the referendum. But in that time, a quiet revolution has been in process, and shifts to devolve substantial parts of regional policymaking from Westminster have been in full swing. Last year, six new city mayors were elected to lead several combined authorities in England – Andy Burnham (Greater Manchester), Andy Street (West Midlands), Steve Rotheram (Liverpool), Tim Bowles (West of England), James Palmer (Cambridgeshire and Peterborough), and Ben Houchen (Tees Valley). In May this year, they were joined by Dan Jarvis (Sheffield City), and together these mayors represent approximately 11m people – or more than 20 per cent of England’s population. Each mayor took control of devolved powers from central government over matters such as transport, housing, planning, skills, and economic development. The election of these new mayors could not have come at a more important time. New mayors can kick-start the policymaking process on key matters in their respective patches. They will also be well placed to navigate their constituencies through the choppy waters of Brexit over the next few years – at a time when regional England will need especially strong local leadership to ensure that no cityregion is left behind. With councils and boroughs retaining control over local services, the metro mayors represent a high profile, bigger-picture approach to regional issues; their broader remit allows them to take a leadership and advocacy role within the structures of government, and a more forwardlooking view of major issues and prospects for their area. The allocation of a 30-year investment fund to these mayoralties takes at least part of their funding and fiscal planning out of short-term political cycles, allowing for longer-term initiatives to target region-specific issues. Already, city mayors have done a huge amount to promote their constituencies internationally, forging important global links and reputations that will be extremely valuable postBrexit. Liverpool and Shanghai, to take just one example, have further strengthened their relationship as

Seven new city mayors have been elected since 2017, with devolved powers over transport, housing, planning, skills and economic development

“twin cities” over recent months, with trade, investment, and creative partnerships and missions. This type of connectivity – and the related opportunities for international trade – will only increase in value as a more global Britain seeks to find its feet after our departure from the European Union. Moreover, an interesting phenomenon is taking place, with metro mayors from different parties showing early signs of collaborating with one another in order to ensure that lessons are learned and successes and benefits shared. Given the party lines that dominate British politics at every level, this could be indicative of a major shift away from the bunker politics, which have sometimes come into play at the national level on matters such as education and transport. This more joined-up approach to plans and delivery will only become more important as local services engage with digital technologies – where the government will need cohesive ways of working together to facilitate information flows and safeguard against data misuse and other risks. At a nation level, Scotland, Wales and Northern Ireland have reached maturity when it comes to devolution.

The election of new city mayors could not have come at a more important time for the UK Each tells its own story of the highs and lows of devolution, but most would agree that, on balance, devolution has been a positive move. The new city mayors mark the next phase of devolution, and both the city and regional leaders and the national leaders can and will learn a lot from each other. With Brexit comes new challenges and opportunities for the leaders of devolved administrations. Front of mind will be ensuring that any deal does not impact negatively on any one region or nation. Also, with duties and tasks returning from Brussels, the devolved administrations will be keen to ensure that they get their share of responsibilities – especially where this means jobs and funding. The UK government has thus far shown a willingness to work closely and cohesively with the city mayors on some of the major post-Brexit issues. In the government’s industrial strategy, for example, mayors and their regions received additional funding for 2018-19 and 2019-20 to

bolster local leadership, along with a proportion of the Transforming Cities Fund. Effective deployment of these resources on transport and other infrastructure will be crucial for achieving the increased productivity levels that our nation so badly needs. With some of the new city mayors heralding from a private sector background (most notably Andy Street, ex-managing director of John Lewis), there are some real opportunities for greater connectivity between policymaking and the business world as they settle into their roles – and between the regions and London, the public and private sec-

tors, and the UK and the world. Within the mayoral offices, sound financial management will be a key aspect to ensuring the success of both current and future growth plans. To make a lasting impact for their regions, city mayors will need to build up these roles and offices – in both scope and reputation – and ensure that they have the necessary talent to develop and succeed at strategic and long-term initiatives. Good fiscal management will not only set up the regions for success, but will also have a positive effect in raising standards at a national level. Clearly, there is an important role

for these city mayors to play in Britain, both today and into the future. All eyes may be focused on our Brexit planning at an international level, but domestic policymaking shouldn’t be overlooked. For the private and public sectors alike, now is the optimal time to work with our devolved powers on opportunities like international trade and economic development; these will give the UK the best possible prospects over the next 200 days and beyond. £ Helen Brand OBE is chief executive of Association of Chartered Certified Accountants.


16

MARKETS

CITYAM.COM

THURSDAY 13 SEPTEMBER 2018

CITY DASHBOARD LONDON REPORT

Oil and tobacco stocks pump up the FTSE 100

S

TRONGER crude prices and a rally in tobacco stocks gave a boost to Britain’s top share index yesterday, while a profit warning hit energy provider SSE. The FTSE 100 ended up 0.55 per cent at 7,313.36 points, having hit its lowest point in five months in the previous session. The internationally-exposed index has lost ground in recent weeks as the pound strengthened, on the back of growing optimism over a Brexit deal, and worries over trade and emerging markets kept investors wary. However, sterling saw some weakness yesterday on reports of a potential challenge to Prime Minister Theresa May. BP and Shell rose 1.6 per cent and one per cent respectively, after Brent prices reached $80 following a largerthan-expected drop in US crude inventories and as sanctions on Iran added to concerns over global oil supply. SSE tumbled 8.3 per cent to its lowest since February 2011 after it warned first-half profit would halve due to the impact of dry, still and warm weather, and persistently high

TOP RISERS 1. BAT up 5.87 per cent 2. Imperial Brands up 3.18 per cent 3. Glencore up 2.86 per cent

TOP FALLERS 1. SSE down 8.28 per cent 2. Centrica down 3.61 per cent 3. Ocado down 2.3 per cent

gas prices. The SSE warning weighed on other utilities. Tobacco stocks were in focus after the US Food and Drug Administration (FDA) said it was considering a ban on flavoured e-cigarettes in response to an “epidemic” of young people using them. After the news, BAT and Imperial Brands turned higher to end up 5.8 and 3.2 per cent respectively. The FDA’s leader announced a number of steps the agency planned to take as part of a broader crackMajor London-listed oil stocks lifted yesterday as crude prices rose down on the sale and marketing of e-cigarettes to kids. Traders said the action was not as harsh as feared. Among mid-caps, furniture retailer Dunelm Group reported flat annual profits after taking an £8.9m charge in its efforts to complete the integration of loss-making internet business Worldstores. Its shares rose 11.8 per cent. Construction company Galliford Try rose 10.5 per cent after its full-year pre-tax profit jumped 145 per cent.

YOUR ONE-STOP SHOP FOR BROKER VIEWS AND MARKET REPORTS

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P

12 Sept

255

258 257 256 255 254 253

6 Sep

7 Sept

10 Sept

11 Sept

12 Sept

The 10-pin bowling operator Ten Entertainment has enjoyed rising profits on the back of increased footfall at its growing site portfolio. Analyst reckon yesterday’s results for Ten Entertainment were “good... given that quarter two had an unfavourably dry period of weather”. Investors might not have been bowled over, but a combination of stable market supply, refurbishment investment and ongoing innovation is giving confidence to the market. As a result, Peel Hunt has reiterated its “buy” rating with a target price of 325p.

CHARLES TAYLOR P

12 Sept

290

266

285 280 275 270

6 Sep

7 Sept

10 Sept

11 Sept

12 Sept

Insurance services provider Charles Taylor posted a slump in profits yesterday, but the firm was keen to remind investors that it was largely the result of a one-off cost of combining three London office locations into one. Two of the firm’s three divisions posted a rise in revenue, with the company being on track to deliver both profit and dividend expectations. Analysts therefore forecast that Charles Taylor is “well positioned to deliver material growth going forward”. Liberum reiterates its “buy” rating with a target price of 385p.

MANX TELECOM 172

P

170 168 166

169

164

FTSE

Dow and S&P eke out gains on trade news

TEN ENTERTAINMENT 259

12 Sept

162

7,400 7,375 7,350 7,325

7,313.36 12 Sept

7,300 7,275 7,250 7,225

6 Sept 7 Sept 10 Sept 11 Sept 12 Sept

6 Sep

7 Sept

10 Sept

11 Sept

NEW YORK REPORT

12 Sept

Alternative Investment Market-listed broadbrand provider Manx Telecom unveiled a partnership with BT and EE to create a hearing loss product for its UK market alongside its results yesterday. City consensus is that the firm is showing “resilient delivery” across its range telecoms services, which are aimed at consumers on the Isle of Man. While share prices are back to near four-year lows, analysts predict that they offer “increasing levers to accelerate group growth and long-term cash returns.” Peel Hunt reiterated its “buy” rating with a target price of 225p.

T

HE DOW and S&P 500 ended slightly higher yesterday after news of a fresh round of USChina trade talks, while the Nasdaq fell following a decline in Apple as it unveiled larger iPhones but made just minor changes to its offerings. The Trump administration has reached out to China for a new round of trade talks as it prepares to activate punitive US tariffs on $200bn (£153bn) worth of Chinese goods, according to two people familiar with the matter. Trade-sensitive stocks rose, including Boeing, up 2.4 per cent. Apple shares were down 1.2 per cent. The company also unveiled health-oriented watches based on the design of current models. Shares of fitness device rival Fitbit fell 6.9 per cent while shares of Garmin lost some earlier gains and were flat after the launch of Apple’s latest Apple Watch. The S&P technology index was down 0.5 per cent, reversing Tuesday’s gains, with fears of further deregulation also hurting Apple as well as social media names. The Dow Jones Industrial Average rose 27.86 points, or 0.11 per cent, to 25,998.92, the S&P 500 gained 1.03 points, or 0.04 per cent, to 2,888.92 and the Nasdaq Composite dropped 18.25 points, or 0.23 per cent, to 7,954.23. Six major Web and Internet service companies, including Apple, are to detail their consumer data privacy practices to a US Senate panel on 26 September, raising the spectre of the possibility of stricter regulation. Among the six companies to testify later this month, Twitter shares were down 3.7 per cent, while Alphabet was down 1.5 per cent. Facebook, not among the companies to testify, was down 2.4 per cent. The Philadelphia Semiconductor index was down 1.2 per cent after Goldman Sachs became the latest brokerage to warn of lower prices for memory chips due to an oversupply of DRAM and NAND chips. Micron slid 4.3 per cent, while Applied Materials was down two per cent.

CITY MOVES WHO’S SWITCHING JOBS PUNTER SOUTHALL ASPIRE

Punter Southall Aspire, a leading investment, savings and workplace pensions company, has appointed Peter Selby as its new managing director of retail advice to manage its fast-growing financial planning business. Peter joins from Scottish Widows, where he was strategic relationship manager and enjoyed a successful 25-year career. As managing director of retail advice, Peter will lead and develop the financial planning business and shape the design and

implementation of the Punter Southall Aspire retail service proposition. Peter brings over 30 years’ experience of working in intermediated life, pension and investment sales. Over the years, he built an extensive network of personal, profitable and enduring relationships with leading employee benefits consultants and independent financial advisers across the UK – relationships he will leverage in his new role.

NOMANINI

Nomanini has announced the appointment of Reg Swart to its board of directors. Reg will be based in London and tasked with expanding the fintech company’s commercial strategy to target major financial institutions expanding into Africa and other

To appear in CITYMOVES please email your career updates and pictures to citymoves@cityam.com

emerging markets. During his tenure at Visa as VP emerging markets digital, Reg led mobile and digital go-to-market strategy across emerging markets globally. Previously, in his role as head of global business development at Fundamo, Reg defined new commercial models and led Fundamo’s international expansion. Reg is also managing partner at fintech growth accelerator CTC Africa, and is a board member of Sochitel UK. Nomanini is a UK-based fintech company that provides banking, merchant and payment technology, primarily in emerging markets, to boost financial inclusion via digital platforms.

OFCOM

Ofcom has appointed Mansoor Hanif as its new chief

technology officer. The chief technology officer helps to ensure that Ofcom’s work for people and businesses is informed by current developments in networks and other technology. Mansoor was most recently director of the Converged Networks Research Lab at BT, leading research into both landline and mobile networks. Before joining BT in 2016, he held a number of positions at the mobile operator EE. These roles included overarching responsibility for integrating the Orange and T-Mobile networks, which together formed the EE network; and leading the technical launch of the UK’s first 4G network. Mansoor’s previous roles include positions at other European mobile phone networks, including Vodafone Italy and various operators in the Orange Group.


THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

FTSE 100

FTSE 250

7313.36 39.82

FTSE ALL SHARE

20380.53 154.11    



GILTS Tsy 4.500 19 . . . . . . .101.85 Tsy 3.750 19 . . . . . . .102.92 Tsy 4.750 20 . . . . . .105.85 Tsy 3.750 20 . . . . . .105.82 Tsy 2.500 20 . . . . . .360.76 Tsy 8.000 21 . . . . . . .119.35 Tsy 4.000 22 . . . . . .110.62 Tsy 0.500 22 . . . . . . .98.23 Tsy 1.875 22 . . . . . . . .117.32 Tsy 2.250 23 . . . . . . .105.71 Tsy 2.500 24 . . . . . .360.20 Tsy 0.125 24 . . . . . . .111.44 Tsy 5.000 25 . . . . . .123.79 Tsy 4.250 27 . . . . . . .125.17 Tsy 1.250 27 . . . . . . .129.49 Tsy 6.000 28 . . . . . .143.43 Tsy 0.125 29 . . . . . . .119.86 Tsy 4.750 30 . . . . . .135.50 Tsy 4.125 30 . . . . . . .358.88 Tsy 4.250 32 . . . . . . .132.07 Tsy 1.250 32 . . . . . . .145.73 Tsy 0.125 36 . . . . . . .135.13 Tsy 4.250 36 . . . . . . .137.40 Tsy 4.750 38 . . . . . .149.95 Tsy 0.625 40 . . . . . .154.82 Tsy 4.500 42 . . . . . . .151.77 Tsy 3.500 45 . . . . . .133.76 Tsy 4.250 46 . . . . . .152.48 Tsy 4.025 49 . . . . . . .157.43 Tsy 0.500 50 . . . . . .178.93 Tsy 0.250 52 . . . . . . .174.53

-0.02 -0.02 -0.04 -0.05 -0.02 -0.08 -0.10 -0.11 -0.08 -0.14 -0.07 -0.07 -0.18 -0.20 -0.03 -0.22 -0.04 -0.24 -0.04 -0.27 0.00 0.01 -0.30 -0.31 -0.05 -0.32 -0.35 -0.34 -0.41 0.04 0.20

106.3 107.0 111.1 110.2 370.2 128.4 115.8 99.7 124.4 109.2 370.4 116.6 130.2 129.9 135.8 150.4 125.1 140.4 371.5 136.2 152.8 141.4 141.5 154.5 163.4 156.9 138.9 158.3 164.0 190.9 187.1

101.8 102.9 105.9 105.8 360.6 119.4 110.6 97.3 117.2 105.3 355.4 111.0 123.7 123.4 128.6 142.2 118.7 133.0 353.9 129.3 144.7 133.7 134.3 146.2 154.2 147.2 129.4 147.5 152.5 176.5 171.7

AEROSPACE & DEFENCE BAE Systems . . . . . . . . .618.6 Cobham . . . . . . . . . . . . .120.9 Meggitt . . . . . . . . . . . . .533.8 QinetiQ Group . . . . . . . .288.7 Rolls-Royce Holdi . . . . .964.4 Senior . . . . . . . . . . . . . .315.4 Ultra Electronics . . . . .1650.0

-1.6 -1.8 -6.4 9.6 -10.6 -0.2 6.0

676.4 148.0 572.0 291.0 1094.0 334.4 1861.0

535.5 113.5 417.1 195.5 814.0 250.0 1142.0

BANKS Bank of Georgia G . . . .1735.2 Barclays . . . . . . . . . . . . .172.2 Close Brothers Gr . . . . .1576.0 CYBG . . . . . . . . . . . . . . .335.8 HSBC Holdings . . . . . . .652.2 Lloyds Banking Gr . . . . .58.9 Metro Bank . . . . . . . . .2780.0 Royal Bank of Sco . . . . .244.8 Standard Chartere . . . . .611.9 TBC Bank Group . . . . . .1616.0 Virgin Money Hold . . . .398.0

17.0 -2.5 1.0 -1.0 1.4 -0.4 20.0 -1.5 -4.9 16.0 3.5

3868.0 1593.0 217.0 171.7 1613.0 1316.0 364.2 286.0 796.0 647.1 72.1 58.6 4040.0 2680.0 302.4 239.6 849.2 607.8 1896.0 1530.0 421.8 258.6

BEVERAGES Barr (A.G.) . . . . . . . . . . .739.0 Britvic . . . . . . . . . . . . . .803.0 Coca-Cola HBC AG . . .2566.0 Diageo . . . . . . . . . . . . .2678.5

-6.0 11.0 17.0 -4.5

748.0 834.5 2801.0 2883.5

50.0 6.6 14.0 0.4 3.0 18.0

5270.0 3675.0 315.6 240.6 3823.0 2820.0 38.7 22.0 575.5 460.0 3236.0 2275.0

600.0 661.5 2216.0 2354.5

CHEMICALS Croda Internation . . . .5104.0 Elementis . . . . . . . . . . .253.2 Johnson Matthey& MATERIALS . . . . .3517.0 CONSTRUCTION Sirius Minerals . . . . . . . . .27.2 Synthomer . . . . . . . . . . .551.5 Victrex plc . . . . . . . . . .3178.0

CONSTRUCTION & MATERIALS Balfour Beatty . . . . . . .284.0 1.9 311.1 253.5 CRH . . . . . . . . . . . . . . .2437.0 -48.0 2861.0 2338.0 Galliford Try . . . . . . . . .1104.0 105.0 1247.9 719.8

4042.22 22.94

   

 Ibstock . . . . . . . . . . . . .243.0 Keller Group . . . . . . . .1038.0 Kier Group . . . . . . . . . .950.0 Marshalls . . . . . . . . . . . .433.0 Polypipe Group . . . . . . .376.6

-1.0 18.0 14.5 3.8 3.6

305.4 1120.0 1176.0 483.4 425.6

225.6 798.0 898.0 384.8 348.0

ELECTRICITY Contour Global . . . . . . .210.0 3.8 300.0 201.6 Drax Group . . . . . . . . . .382.8 5.4 385.0 221.4 SSE . . . . . . . . . . . . . . . .1147.0 -103.5 1440.5 1127.5

ELECTRONIC & ELECTRICAL EQ. Halma . . . . . . . . . . . . .1388.0 Morgan Advanced M . . .327.4 Renishaw . . . . . . . . . .4988.0 Spectris . . . . . . . . . . . .2374.0

-5.0 -0.8 38.0 40.0

1456.0 1075.0 366.2 291.1 5775.0 4434.0 2908.0 2229.0

EQUITY INVESTMENT INSTRUM. Aberforth Smaller . . . .1338.0 0.0 1442.0 1254.0 Alliance Trust . . . . . . . .759.0 4.0 785.0 689.0 Baillie Gifford J . . . . . . .839.0 4.0 882.0 683.0 Bankers Inv Trust . . . . .877.0 4.0 923.0 800.5 British Empire Tr . . . . . .758.0 8.0 767.0 681.0 Caledonia Investm . . .2840.0 40.0 2890.0 2600.0 City of London In . . . . .418.0 3.5 443.0 393.5 Edinburgh Dragon . . . .355.0 6.0 394.0 343.0 Edinburgh Inv Tru . . . .684.0 9.0 724.0 616.0 F&C Global Smalle . . . .1485.0 5.0 1495.0 1265.0 Fidelity China Sp . . . . .206.5 2.5 268.0 201.6 Fidelity European . . . . .230.5 4.5 239.0 202.5 Fidelity Special . . . . . . .274.0 4.0 280.0 236.8 Finsbury Growth & . . . .832.0 6.0 854.0 721.0 Foreign and Colon . . . . .721.0 7.0 741.0 595.0 GCP Infrastructur . . . . . .125.0 1.4 129.0 115.0 Genesis Emerging . . . .664.0 -2.0 750.0 656.0 Greencoat UK Wind . . .128.4 0.0 128.6 117.8 HarbourVest Globa . . .1386.0 10.0 1390.5 1178.0 Herald Investment . . .1355.0 15.0 1370.0 1080.0 HICL Infrastructu . . . . . .155.6 0.0 163.5 133.5 International Pub . . . . .155.2 -1.2 166.6 138.2 John Laing Infras . . . . .142.0 0.0 146.0 109.6 JPMorgan American . . .470.0 6.5 472.0 368.5 JPMorgan Emerging . .834.0 14.0 930.0 814.0 JPMorgan Indian I . . . . .677.0 14.0 785.0 644.0 JPMorgan Japanese . . .454.0 -1.0 472.0 368.0 Jupiter European . . . . .867.0 7.0 895.0 670.0 Mercantile Invest . . . . . .212.5 2.8 226.0 198.8 Monks Inv Trust . . . . . .823.0 1.0 872.0 690.0 Murray Internatio . . . .1124.0 20.0 1307.0 1104.0 NB Global Floatin . . . . . .92.8 0.0 95.6 91.3 Pantheon Internat . . .2100.0 0.0 2100.0 1757.5 Perpetual Income . . . .358.0 7.0 392.0 333.5 Pershing Square H . . . .1168.0 16.0 1208.0 856.0 Personal Assets T . . .39900.0 150.0 41050.038750.0 Polar Capital Tec . . . . .1344.0 18.0 1386.0 999.0 RIT Capital Partn . . . .2085.0 15.0 2130.0 1844.0 Riverstone Energy . . .1248.0 -2.0 1330.0 1170.0 Schroder Asia Pac . . . .424.0 3.0 484.0 415.0 Scottish Inv Trus . . . . . .859.0 8.0 902.0 771.0 Scottish Mortgage . . . .533.2 2.6 568.3 407.6 Sequoia Economic . . . .112.5 1.5 114.5 104.5 Syncona Limited N . . . .280.5 -1.0 290.0 165.0 Temple Bar Inv Tr . . . .1268.0 12.0 1354.0 1180.0 Templeton Emergin . . .683.0 7.0 825.0 674.0 The Renewables In . . . . .111.4 0.4 112.0 101.4 TR Property Inv T . . . . .419.0 3.5 433.5 362.0 Vietnam Enterpris . . . .450.0 9.0 499.0 387.8 VinaCapital Vietn . . . . .340.0 2.0 367.0 295.0 Witan Inv Trust . . . . . .1102.0 8.0 1138.0 995.0 Worldwide Healthc . .2830.0 25.0 2910.0 2330.0

FINANCIAL SERVICES 3i Group . . . . . . . . . . . . .916.2 3.0 1029.5 853.0 3i Infrastructure . . . . . .245.7 -0.8 248.5 191.3

188.0 73.6 458.8 218.5 433.2 332.3 393.0 332.2 314.0 238.0 363.6 228.8 454.0 366.0 206.0 146.8 90.0 73.3 1233.4 975.0 2227.0 1396.0 954.5 617.0 401.0 253.5 1203.0 841.0 254.8 184.3 648.6 461.4 154.5 102.0 316.2 239.9 410.0 295.0 631.4 402.2 688.0 470.0 52.8 45.3 45.5 42.5 4798.0 3649.0 217.7 161.5 449.6 362.8 552.5 408.1 733.2 430.2 154.7 131.3 2772.0 2284.0 175.0 159.0 52.5 37.8 392.0 250.0 2790.0 1925.0 830.0 594.0 3773.0 2954.0 446.3 304.2 553.6 259.7 84.4 74.3 48.5 33.0 194.0 165.8

FIXED LINE TELECOMS BT Group . . . . . . . . . . . .224.1 0.4 287.6 203.0 TalkTalk Telecom . . . . .129.9 3.2 218.0 94.5 Telecom Plus . . . . . . . .1042.0 2.0 1280.0 1010.0

NASDAQ

S&P 500

/â‚Ź 1.1223

0.0003 â‚Ź/$ 1.1629

0.0029

25998.92 27.86

7954.23 18.24

2888.92 1.03

/$ 1.3053

0.0036 â‚Ź/ÂŁ 0.8909

0.0001

/ÂĽ 145.21

0.0006 â‚Ź/ÂĽ 129.36

0.0012

  Paddy Power Betfa . .6880.0 Rank Group . . . . . . . . . .176.0 Stagecoach Group . . . .164.2 Thomas Cook Group . . . .75.9 TUI AG Reg Shs (D . . . .1331.5 Wetherspoon (J.D. . . .1279.0 Whitbread . . . . . . . . .4640.0 William Hill . . . . . . . . . .263.6 Wizz Air Holdings . . . .3119.0

 

 50.0 9110.0 6745.0 2.6 248.5 155.0 1.7 182.5 129.6 0.8 146.1 73.9 10.5 1810.5 1262.0 0.0 1325.0 1036.0 -8.0 4711.0 3512.0 7.1 338.0 243.6 87.0 3797.0 2799.0

   

 United Utilities . . . . . . .710.4 -5.8 904.5 656.0

GENERAL INDUSTRIALS RPC Group . . . . . . . . . . .820.4 1.8 993.0 648.6 Smith (DS) . . . . . . . . . .487.0 -1.2 538.9 427.8 Smiths Group . . . . . . . .1567.5 1.5 1801.0 1444.0 SmurďŹ t Kappa Gro . . .3128.0 -32.0 3292.0 2150.0 Vesuvius . . . . . . . . . . . .600.0 1.0 652.5 544.0

GENERAL RETAILERS Auto Trader Group . . . .438.5 B&M European Valu . . .418.2 Card Factory . . . . . . . . .193.3 Dixons Carphone . . . . . .161.7 Dunelm Group . . . . . . .570.5 Halfords Group . . . . . . .352.0 Inchcape . . . . . . . . . . . .671.5 JD Sports Fashion . . . . .521.4 Just Eat . . . . . . . . . . . . .719.0 KingďŹ sher . . . . . . . . . . .263.0 Marks & Spencer G . . . .293.3 Next . . . . . . . . . . . . . .5468.0 Saga . . . . . . . . . . . . . . . .125.6 Sports Direct Int . . . . . .352.7 Ted Baker . . . . . . . . . .2200.0 WH Smith . . . . . . . . . .2066.0

-0.5 7.9 4.1 0.7 60.5 5.4 -2.0 2.2 4.4 -2.0 4.4 44.0 -0.7 11.8 2.0 22.0

457.0 319.0 434.8 364.2 355.0 177.4 234.7 149.1 753.5 484.0 388.0 310.8 880.5 668.5 539.4 318.0 890.0 661.0 362.5 262.9 354.1 264.5 6202.0 4230.0 200.5 109.5 436.1 340.9 3214.0 2096.0 2347.0 1859.0

942.0 204.1 238.7 224.8 499.6 176.0 666.5

FOOD PRODUCERS Associated Britis . . . . .2229.0 Bakkavor Group . . . . . .172.4 Cranswick . . . . . . . . . .3294.0 Dairy Crest Group . . . . .462.0 Greencore Group . . . . . .191.8 Hilton Food Group . . .1005.0 Tate & Lyle . . . . . . . . . . .667.4 Unilever . . . . . . . . . . .4325.0

2.0 1.2 36.0 0.0 12.3 15.0 4.4 25.0

3371.0 2211.0 212.5 170.0 3460.0 2780.0 625.5 455.4 230.6 127.0 1005.0 726.0 710.0 526.0 4548.5 3695.0

FORESTRY & PAPER Mondi . . . . . . . . . . . . .2070.0 -8.0 2236.0 1693.0

GAS, WATER & MULTIUTILITIES Centrica . . . . . . . . . . . . .144.4 National Grid . . . . . . . .802.8 Pennon Group . . . . . . .740.4 Severn Trent . . . . . . . .1933.5

-5.4 -5.1 3.8 -8.5

193.8 958.6 821.5 2240.0

124.1 736.8 583.4 1703.0

2.0 1.5 60.0 0.4 70.0 15.0

1443.0 1013.0 247.0 198.8 5350.0 3249.0 361.4 241.7 7270.0 5410.0 2325.0 1562.1

INDUSTRIAL METALS & MINING Evraz . . . . . . . . . . . . . . .475.3 8.3 560.4 279.1 Ferrexpo . . . . . . . . . . . . .148.1 4.6 323.2 142.9

INDUSTRIAL TRANSPORTATION BBA Aviation . . . . . . . .296.6 Clarkson . . . . . . . . . . .2805.0 Fisher (James) & . . . .1858.0 Royal Mail . . . . . . . . . . .477.4 Stobart Group Ltd . . . .246.0

1.2 50.0 90.0 7.0 6.5

368.8 292.5 3450.0 2300.0 1930.0 1360.0 631.0 369.9 302.5 214.0

2.0 0.5 -3.0 0.0 0.2 -5.0 -12.0

2118.0 619.5 393.2 283.9 320.0 1711.0 1496.0

NON LIFE INSURANCE Admiral Group . . . . . . .2017.0 Beazley . . . . . . . . . . . . .567.5 Direct Line Insur . . . . . .323.8 esure Group . . . . . . . . .278.4 Hastings Group Ho . . . .269.4 Hiscox Limited (D . . . .1616.0 Jardine Lloyd Tho . . . .1432.0

1784.0 452.8 322.5 192.5 233.8 1214.0 1182.0

MAIN CHANGES UK 350   

 

Dunelm Group . . . . . . . . . . . . . .570.5 Galliford Try . . . . . . . . . . . . . . . .1104.0 Energean Oil & Gas . . . . . . . . . .585.0 Greencore Group . . . . . . . . . . . . .191.8 Kaz Minerals . . . . . . . . . . . . . . . .464.6 British American T . . . . . . . . . .3763.0 Premier Oil . . . . . . . . . . . . . . . . .126.4 Fisher (James) & S . . . . . . . . . .1858.0 Centamin (DI) . . . . . . . . . . . . . . .90.4 Wood Group (John) . . . . . . . . . .729.6

11.9 10.5 7.3 6.9 6.4 5.9 5.4 5.1 4.8 4.6

   

 1399.0 269.9 1146.0 341.5 705.2 266.2 959.0

   

 IMI . . . . . . . . . . . . . . . . .1134.0 Melrose Industrie . . . . .219.5 RHI Magnesita N.V . . .4860.0 Rotork . . . . . . . . . . . . . .328.0 Spirax-Sarco Engi . . .7000.0 Weir Group . . . . . . . . .1585.0

   

 Moneysupermarket. . . .281.0 -0.9 Pearson . . . . . . . . . . . . .861.6 -5.0 Reach . . . . . . . . . . . . . . . .71.2 2.6 Relx plc . . . . . . . . . . . .1633.0 -20.5 Rightmove . . . . . . . . . .485.3 -2.0 Sky . . . . . . . . . . . . . . . .1545.0 1.0 STV Group . . . . . . . . . . .405.5 0.5 Tarsus Group . . . . . . . .294.0 -6.0 WPP . . . . . . . . . . . . . . . .1151.5 -12.5

MINING Anglo American . . . . .1486.0 Antofagasta . . . . . . . . .758.8 BHP Billiton . . . . . . . . . .1517.4 Centamin (DI) . . . . . . . . .90.4 Fresnillo . . . . . . . . . . . .800.2 Glencore . . . . . . . . . . . . .295.1 Hochschild Mining . . . .164.0 Kaz Minerals . . . . . . . . .464.6 Polymetal Interna . . . . .611.0 Randgold Resource . .4700.0 Rio Tinto . . . . . . . . . . .3534.5 Vedanta Resources . . . .834.8

AB INBEV..........................................................75.75 ADIDAS N........................................................210.70 AIR LIQUIDE ....................................................105.75 AIRBUS ...........................................................106.70 ALLIANZ..........................................................185.00 ASML HLDG......................................................151.84 AXA...................................................................21.93 BANCO SANTANDER ...........................................4.24 BASF N...............................................................77.16 BAYER N...........................................................70.30 BBVA..................................................................5.22 BMW .................................................................81.32 BNP PARIBAS BR-A..........................................50.60 CRH PLC .............................................................0.00 DAIMLER N........................................................54.53 DANONE...........................................................64.83 DEUTSCHE BANK N.............................................9.53 DEUTSCHE POST N............................................30.98 DEUTSCHE TELEKOM N ......................................13.66 E.ON N................................................................8.82 ENEL N ...............................................................4.56 ENGIE................................................................12.45 ENI N.................................................................16.02 ESSILOR INTL ...................................................121.60 FRESENIUS........................................................63.76 IBERDROLA........................................................6.26 INDITEX.............................................................26.57 ING GROUP.......................................................10.89 INTESA SANPAOLO N ..........................................2.34 KON AH DEL BR.................................................21.04 L'OREAL..........................................................203.50 LVMH..............................................................290.75 MUENCHENER RUECKV N ................................182.70 NOKIA ................................................................4.58 ORANGE............................................................13.69 ROY.PHILIPS .....................................................39.02 SAFRAN............................................................117.80 SAINT-GOBAIN..................................................36.01 SANOFI ..............................................................74.61 SAP I...............................................................104.20 SCHNEIDER EL..................................................68.40 SIEMENS N......................................................109.50 SOCIETE GENERALE............................................35.17 TELEFONICA........................................................6.68 TOTAL................................................................53.88 UNILEVER CERT................................................48.94 VINCI ................................................................80.76 VIVENDI............................................................22.03 VOLKSWAGEN VZ I ..........................................138.40

19.0 18.4 21.6 4.2 6.2 8.2 5.2 27.9 13.8 48.0 48.5 -1.4

1926.4 1286.0 1149.0 738.4 1779.2 1305.5 165.9 86.3 1570.0 783.6 415.0 286.6 271.6 156.2 1076.0 434.7 927.5 591.0 7765.0 4636.0 4492.0 3417.0 954.0 632.4

MOBILE TELECOMS Inmarsat . . . . . . . . . . . .504.6 -0.8 651.0 336.4 Vodafone Group . . . . . .166.6 0.4 238.0 162.9

HEALTH CARE EQUIPMETN & S. Assura . . . . . . . . . . . . . . .56.3 Convatec Group . . . . . . .235.1 Mediclinic Intern . . . . . .477.0 NMC Health . . . . . . . . .3704.0 Smith & Nephew . . . .1403.0 Spire Healthcare . . . . . .172.0

0.3 -1.9 -0.7 46.0 15.0 3.2

64.3 53.9 284.2 182.0 748.5 466.1 4120.0 2645.0 1431.0 1215.0 317.5 160.0

-0.4 31.0 7.0 8.0 5.0 -7.8 3.6 10.0 -3.0 2.0 1.8

700.0 483.0 3792.0 2838.0 4321.0 3468.0 1301.5 1024.0 384.0 298.8 588.5 340.0 171.0 97.5 2890.0 2358.0 7187.0 5443.0 664.5 516.0 211.2 164.3

HHOLD GDS & HOME CONSTR. Barratt Developme . . . .557.0 Bellway . . . . . . . . . . . .2936.0 Berkeley Group Ho . . .3611.0 Bovis Homes Group . . .1138.0 Countryside Prope . . . .343.2 Crest Nicholson H . . . . .359.8 McCarthy & Stone . . . . .122.6 Persimmon . . . . . . . . .2382.0 Reckitt Benckiser . . . .6507.0 Redrow . . . . . . . . . . . . .595.5 Taylor Wimpey . . . . . . .169.6

INDUSTRIAL ENGINEERING Bodycote . . . . . . . . . . .895.0 -10.0 1055.0 835.5 Hill & Smith Hold . . . . .1035.0 5.0 1523.0 1006.0

SSE . . . . . . . . . . . . . . . . . . . . . . .1147.0 Centrica . . . . . . . . . . . . . . . . . . . .144.4 AA . . . . . . . . . . . . . . . . . . . . . . . . .113.9 Ocado Group . . . . . . . . . . . . . . .933.0 Crest Nicholson Ho . . . . . . . . . . .359.8 FirstGroup . . . . . . . . . . . . . . . . . .96.8 Nex Group . . . . . . . . . . . . . . . . .1022.0 Millennium & Copth . . . . . . . . .504.0 CRH . . . . . . . . . . . . . . . . . . . . . .2437.0 Sanne Group . . . . . . . . . . . . . . . .617.0

-8.3 -3.6 -3.3 -2.3 -2.1 -2.0 -2.0 -2.0 -1.9 -1.8

   

 Lancashire Holdin . . . . .576.5 -2.5 759.5 549.0 RSA Insurance Gro . . . .606.0 -5.4 681.8 593.5

LIFE INSURANCE Aviva . . . . . . . . . . . . . . .477.2 Just Group . . . . . . . . . . . .74.0 Legal & General G . . . . .250.9 Phoenix Group Hol . . . .678.0 Prudential . . . . . . . . . .1679.5 St James's Place . . . . .1096.0

-0.7 -0.4 -1.0 -9.0 0.0 -4.5

552.0 170.4 286.2 732.9 1981.0 1270.5

475.0 73.0 249.5 652.4 1671.0 1052.0

MEDIA 4Imprint Group . . . . .2020.0-120.0 Ascential . . . . . . . . . . . .424.0 2.0 Bloomsbury Publis . . . .223.0 3.0 Centaur Media . . . . . . . .42.7 0.6 Entertainment One . . .395.6 6.8 Euromoney Institu . . .1350.0 32.0 Gocompare.com Gro . . .102.4 1.0 Haynes Publishing . . . .204.0 3.0 Huntsworth . . . . . . . . . .114.0 -0.5 Informa . . . . . . . . . . . . .753.2 3.6 ITE Group . . . . . . . . . . . .79.0 1.3 ITV . . . . . . . . . . . . . . . . .162.0 2.5 Johnston Press . . . . . . . . .3.8 0.0

2260.0 465.0 254.0 56.8 398.4 1450.0 139.0 246.0 139.0 859.0 121.0 180.4 17.5

1575.0 335.7 157.3 40.2 247.8 1105.0 91.5 185.0 73.0 659.5 73.2 142.4 2.7

BP . . . . . . . . . . . . . . . . .552.9 Cairn Energy . . . . . . . . .223.2 Energean Oil & Ga . . . .585.0 Premier Oil . . . . . . . . . .126.4 Royal Dutch Shell . . . .2482.5 Royal Dutch Shell . . . .2518.5 Tullow Oil . . . . . . . . . . .232.7

8.9 -2.8 40.0 6.5 24.0 25.5 8.5

592.8 267.6 585.0 134.9 2748.5 2841.0 276.0

448.3 174.8 418.0 58.5 2102.5 2142.5 155.3

OIL EQUIPMENT & SERVICES Hunting . . . . . . . . . . . . .790.5 33.5 914.0 425.0 Petrofac Ltd. . . . . . . . . .620.2 21.8 660.0 397.3 Wood Group (John) . . .729.6 32.2 781.8 521.4

PERSONAL GOODS Burberry Group . . . . . .2122.0 39.0 2325.0 1498.0 PZ Cussons . . . . . . . . . .229.4 -0.2 341.0 216.0 Superdry . . . . . . . . . . .1158.0 10.0 2076.0 1107.0

PHARMACEUTICALS & BIOTECH AstraZeneca . . . . . . . . .5717.0 BTG . . . . . . . . . . . . . . . .570.0 Dechra Pharmaceut . .2510.0 Genus . . . . . . . . . . . . .2488.0 GlaxoSmithKline . . . . .1502.4 Hikma Pharmaceuti . .1954.0 Indivior . . . . . . . . . . . . .271.4 Shire Plc . . . . . . . . . . .4385.0

-15.0 8.0 32.0 6.0 8.2 18.5 0.1 42.5

6107.0 4705.0 779.0 475.0 3168.0 1970.0 2992.0 1979.0 1619.4 1242.8 2016.0 855.6 496.2 258.7 4562.0 2953.5

REAL ESTATE INVEST. & SERV. Capital & Countie . . . . .248.4 CLS Holdings . . . . . . . . .224.5 Daejan Holdings . . . . .5930.0 F&C Commercial Pr . . . .146.6 Grainger . . . . . . . . . . . .298.8 NewRiver REIT . . . . . . .250.5 Safestore Holding . . . .549.5 Savills . . . . . . . . . . . . . .773.5 St. Modwen Proper . . .390.6 UK Commercial Pro . . . .90.0

3.0 2.0 30.0 0.6 1.6 -1.5 16.0 8.5 5.6 0.1

319.9 242.7 255.0 197.5 6400.0 5580.0 155.0 134.5 322.0 254.9 359.2 249.0 577.0 391.3 1034.0 763.3 426.0 368.0 92.0 85.6

REAL ESTATE INVEST. TRUSTS Big Yellow Group . . . . .964.5 17.5 984.0 748.5 British Land Comp . . . . .617.6 -3.6 697.0 590.5 Derwent London . . . . .2981.0 21.0 3235.0 2625.0

   

 Great Portland Es . . . . .703.0 Hammerson . . . . . . . . .459.6 Intu Properties . . . . . . .154.2 Land Securities G . . . . .889.5 LondonMetric Prop . . . .183.2 Primary Health Pr . . . . .113.6 RDI Reit . . . . . . . . . . . . . .32.8 SEGRO . . . . . . . . . . . . . .657.6 Shaftesbury . . . . . . . . .909.0 Tritax Big Box Re . . . . . .149.9 Unite Group . . . . . . . . .902.5 Workspace Group . . . .1047.0





-0.48 4.10 0.15 -0.06 2.16 -5.94 0.08 -0.00 0.86 -0.04 0.01 0.56 -0.03 0.00 0.48 0.00 -0.09 0.42 -0.04 -0.32 -0.03 -0.02 0.14 1.20 0.18 -0.06 1.05 -0.11 0.01 0.21 1.40 6.80 0.95 -0.06 0.00 0.77 0.30 0.22 1.34 1.36 1.14 0.82 -0.40 -0.11 0.90 0.34 -0.20 0.16 1.02

107.40 218.00 113.30 111.16 206.85 189.50 27.69 6.09 98.80 118.04 7.73 97.50 69.17 34.87 76.48 72.13 17.13 41.36 15.88 10.81 5.59 15.16 16.89 127.60 72.76 6.81 32.81 16.69 3.23 22.08 214.90 313.70 200.30 5.39 15.24 39.09 119.35 51.40 86.39 105.28 78.56 125.95 49.87 9.27 56.27 52.31 88.80 24.87 192.46

75.34 165.05 95.59 70.35 170.12 133.80 20.50 4.14 75.52 69.62 5.12 76.50 50.06 26.53 53.52 62.24 8.76 27.23 12.72 7.88 4.22 12.17 13.22 100.60 58.96 5.56 23.00 10.70 2.11 14.91 170.30 225.35 173.25 3.81 13.32 29.25 81.04 35.15 62.88 82.05 64.02 99.78 34.82 6.59 41.99 42.13 77.56 20.26 132.85

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COMMODITIES Gold.............................................................1189.85 Silver ...............................................................14.13 Brent Crude ...................................................79.06 Krugerrand .................................................1218.55 Palladium ...................................................969.00 Platinum .....................................................789.00 Tin Cash Official........................................19105.00 Lead Cash Official......................................2055.00 Zinc Cash Official.......................................2405.50

-6.75 -0.09 1.69 2.90 -10.00 16.00 -55.00 -85.00 -67.50

CREDIT & RATES

Copper Cash Official .................................5840.00 Aluminium Cash Official...........................2030.00 Nickel Cash Official..................................12200.00 Aluminium Alloy Cash Official ..................1540.00 Cocoa Futures............................................2355.00 Coffee 'C' Futures .........................................102.38 Feed Wheat Futures ....................................175.50 Soybeans Futures Continuation Contract...828.40

8.00 6.00 60.00 -35.00 72.00 2.08 -1.35 8.20

BoE IR Overnight .........................................0.750 BoE IR 7 days..............................................0.750 BoE IR 1 month ...........................................0.750 BoE IR 3 months.........................................0.750 BoE IR 6 months.........................................0.750 LIBOR Euro - overnight..............................-0.446 LIBOR Euro - 12 months..............................-0.219 LIBOR USD - overnight..................................1.915 LIBOR USD - 12 months ...............................2.868 Halifax mortgage rate ................................3.990

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Euro Base Rate ...........................................0.000 Finance house base rate .............................1.000 US Fed funds...................................................1.91 US long bond yield .........................................3.11 Euro Euribor...............................................-0.378 The vix index.................................................13.12 The baltic dry index.................................1482.00 Markit iBoxx EUR .......................................229.18 Markit iBoxx GBP........................................322.78 Markit iBoxx USD .......................................237.04

0.00 0.00 0.00 -0.02 0.00 -0.10 -8.00 0.16 0.25 0.24

WORLD INDICES    

FTTSE 100. . . . . . . . . . . . . . . . . . . . . 7313.36 39.82 0.55 FTSE 250. . . . . . . . . . . . . . . . . . . . 20380.53 154.11 0.76 FTSE All-Share . . . . . . . . . . . . . . . . 4042.22 22.94 0.57 FTSE AIM All-Share. . . . . . . . . . . . . 1096.92 0.74 0.07

  



S&P 500 . . . . . . . . . . . . . . . . . . . . . 2888.92 1.03 0.04 Dow Jones I.A.. . . . . . . . . . . . . . . 25998.92 27.86 0.11 Nasdaq Composite . . . . . . . . . . . . 7954.23 -18.24 -0.23 Xetra DAX . . . . . . . . . . . . . . . . . . . 12032.30 62.03 0.52

   

CAC 40 . . . . . . . . . . . . . . . . . . . . . . . 5332.13 48.34 0.91 Swiss Market Index . . . . . . . . . . . . 8960.13 45.19 0.51 ISEQ Overall Index . . . . . . . . . . . . . 6612.27 -34.45 -0.52 FTSEuroďŹ rst 300 . . . . . . . . . . . . . . . 1472.93 7.73 0.53

1803.0 964.5 846.0 911.8 487.0 570.2 393.5 416.0

-3.9 11.0 -11.0 -6.6 -1.0 3.0 -2.1 -5.0 7.0 5.2 -4.0 -1.8 6.5 29.0 2.2 20.0 6.2 10.0 3.2 -14.0 4.5 2.0 -1.0 1.4 -0.3 -3.0

176.6 71.1 983.0 641.8 2445.0 1738.0 862.4 626.2 242.0 149.6 2415.0 1936.0 392.7 80.2 7755.0 6475.0 1475.0 1037.0 761.6 568.6 326.5 204.5 555.0 416.8 1946.5 1446.0 6369.0 4493.4 291.3 228.2 841.5 729.0 213.4 174.9 1039.0 705.0 539.0 399.5 6014.0 4554.0 623.5 440.6 108.2 60.4 355.1 258.7 119.3 83.6 182.0 119.7 1609.0 1102.0

3.0 -1.0 -3.6 14.5 3.1 21.0 -2.0 5.0 8.2 1.0 34.0 7.2 5.8 -10.0 -2.4 4.2 -1.5

324.8 222.8 5170.0 4215.0 316.2 214.0 1708.5 1425.0 386.9 267.1 1796.0 1180.0 117.5 77.0 1964.0 1338.0 642.6 458.9 1170.0 798.5 4966.0 3668.0 726.6 584.0 468.2 318.4 625.5 431.9 283.1 231.4 422.2 340.9 650.0 385.3

AIM 50 Abcam . . . . . . . . . . . . .1314.0 -10.0 1539.0 957.5 Advanced Medical . . . .311.0 1.0 370.0 282.5 Alliance Pharma . . . . . . .94.6 3.0 102.0 52.5 ASOS . . . . . . . . . . . . . .5990.0 14.0 7730.0 5490.0 Blue Prism Group . . . .2570.0 -5.0 2618.9 988.0 Brooks Macdonald . . .2075.0 -10.0 2200.0 1760.0 Camellia . . . . . . . . . .10400.0 -25.0 13600.010225.0 CareTech Holding . . . . .382.5 7.0 445.0 365.0 Central Asia Meta . . . . .213.5 6.5 339.5 206.5 Clinigen Group . . . . . . .932.0 9.0 1177.0 837.0 CVS Group . . . . . . . . . . .954.0 12.0 1490.0 855.0 Dart Group . . . . . . . . . .979.5 -0.5 1017.0 502.0 EMIS Group . . . . . . . . . .999.0 24.0 1017.0 705.0 Faroe Petroleum . . . . . .153.4 5.2 155.2 91.2 Fevertree Drinks . . . . .3832.0 -64.0 4120.0 1900.0 First Derivatives . . . . .3960.0 10.0 4680.0 2781.0 Frontier Developm . . .1130.0 -5.0 1825.0 888.0 Gamma Communicati .891.0 5.0 902.0 564.5 GB Group . . . . . . . . . . .593.0 -5.0 626.0 346.8 Gooch & Housego . . . .1682.5 -17.5 1715.0 1260.0 Hurricane Energy . . . . . .53.5 -1.2 57.5 24.0 Iomart Group . . . . . . . .437.5 5.5 438.5 313.5 IQE . . . . . . . . . . . . . . . . . .84.2 -2.4 178.8 83.3 James Halstead . . . . . .408.0 7.0 475.0 377.0 Johnson Service G . . . . .135.0 -0.2 151.0 128.0 Keywords Studios . . . .1918.0 14.0 2065.0 1185.0 Learning Technolo . . . . .124.5 5.0 126.7 47.0 M&C Saatchi . . . . . . . . .356.0 1.0 412.0 294.5 M. P. Evans Group . . . . .749.0 -2.0 819.8 725.0 Majestic Wine . . . . . . . .402.0 -8.0 485.0 315.3 Midwich Group . . . . . . .645.0 -25.0 685.0 382.5 Mulberry Group . . . . . .395.0 -5.0 1099.0 390.5 Next Fifteen Comm . . . .557.0 7.0 599.0 370.0 Nichols . . . . . . . . . . . .1460.0 0.0 1853.0 1415.0 Numis Corporation . . . .415.0 0.0 440.0 269.0 Patisserie Holdin . . . . . .451.0 16.0 492.0 303.0 Polar Capital Hol . . . . .626.0 -4.0 732.0 436.5 Purplebricks Grou . . . .266.2 -1.8 489.8 264.0 Redde . . . . . . . . . . . . . .189.0 1.0 191.6 151.5 Renew Holdings . . . . .400.0 5.0 457.0 364.5 RWS Holdings . . . . . . . .479.0 3.0 539.0 343.5 Scapa Group . . . . . . . . .409.8 4.4 509.0 400.0 Secure Income Rei . . . .401.0 4.0 403.0 350.0 Smart Metering Sy . . . .605.0 -2.0 874.5 595.0 Sound Energy . . . . . . . . .39.3 -0.2 57.2 35.0 Staffline Group . . . . . .1322.0 6.0 1341.0 888.0 Telford Homes . . . . . . .410.0 2.0 471.5 364.3 Thorpe (F.W.) . . . . . . . . .313.0 -1.5 384.3 293.5 Watkin Jones . . . . . . . .199.0 4.6 249.0 177.6 Young & Co's Brew . . .1755.0 30.0 1782.5 1305.0 Young & Co's Brew . . .1225.0 0.0 1325.0 1027.5

         

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3054.0 1620.0 1128.0 2739.0 986.5 821.4 888.0 669.5

TRAVEL & LEISURE 888 Holdings . . . . . . . .226.8 Carnival . . . . . . . . . . .4658.0 Cineworld Group . . . . .309.0 Compass Group . . . . .1645.0 Domino's Pizza Gr . . . .288.4 easyJet . . . . . . . . . . . . .1415.0 FirstGroup . . . . . . . . . . . .96.8 Go-Ahead Group . . . . .1751.0 Greene King . . . . . . . . . .519.2 GVC Holdings . . . . . . .1062.0 InterContinental . . . .4665.0 International Con . . . . .674.2 Merlin Entertainm . . . .383.5 Millennium & Copt . . . .504.0 Mitchells & Butle . . . . . .258.8 National Express . . . . .403.6 On The Beach Grou . . . .491.5

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82.0 -2.0 34.0 -4.0 0.2 -0.4 4.0 -4.5

TOBACCO

la SA im V E on a f C lin re ÂŁ2 IT e e 5 YA us t ! M ing ick 18 co e de t

INVESTOR SHOW SHO OW

660.1 434.4 149.2 883.0 164.0 108.8 31.5 527.0 900.0 139.6 656.0 861.5

British American . . . .3763.0 208.5 5100.0 3465.0 Imperial Brands . . . . .2691.5 83.0 3327.5 2325.0

ok

THE LONDON LONDO ON

798.7 570.0 253.0 1067.7 195.7 123.1 38.9 679.0 1055.0 156.9 906.0 1165.0

SUPPORT SERVICES AA . . . . . . . . . . . . . . . . . .113.9 Aggreko . . . . . . . . . . . .846.0 Ashtead Group . . . . . .2387.0 Babcock Internati . . . . .712.0 BCA Marketplace . . . . . .219.0 Bunzl . . . . . . . . . . . . .2404.0 Capita . . . . . . . . . . . . . .143.9 DCC . . . . . . . . . . . . . . .6950.0 Diploma . . . . . . . . . . . .1394.0 Electrocomponents . . . .737.6 Equiniti Group . . . . . . .252.0 Essentra . . . . . . . . . . . . .427.8 Experian . . . . . . . . . . .1938.5 Ferguson . . . . . . . . . . .6343.0 G4S . . . . . . . . . . . . . . . . .231.4 Grafton Group Uni . . . . .791.0 Hays . . . . . . . . . . . . . . . .212.0 Homeserve . . . . . . . . .1018.0 Howden Joinery Gr . . .490.2 Intertek Group . . . . . .5000.0 Pagegroup . . . . . . . . . .576.5 Renewi . . . . . . . . . . . . . .63.3 Rentokil Initial . . . . . . .322.0 Serco Group . . . . . . . . .100.5 SIG . . . . . . . . . . . . . . . . .127.7 Travis Perkins . . . . . . . .1132.5

bo



-0.4 7.4 2.2 -3.5 1.8 0.0 0.7 2.6 5.0 -0.1 15.5 -8.0

SOFTWARE & COMPUTER SERV. Aveva Group . . . . . . . .2780.0 Computacenter . . . . . .1306.0 FDM Group (Holdin . . .945.0 Micro Focus Inter . . . . .1302.5 Playtech . . . . . . . . . . . .492.7 Sage Group . . . . . . . . . .579.6 Softcat . . . . . . . . . . . . . .825.0 Sophos Group . . . . . . . .516.0

C

EU SHARES  

366.5 256.9 957.4 566.5 88.5 66.1 1782.0 1429.5 535.0 388.9 1550.0 900.0 458.0 305.0 335.0 273.0 1471.0 1094.0

OIL & GAS PRODUCERS

FOOD & DRUG RETAILERS Greggs . . . . . . . . . . . . .1066.0 18.0 Morrison (Wm) Sup . . .265.8 -1.4 Ocado Group . . . . . . . . .933.0 -22.0 Sainsbury (J) . . . . . . . . .323.5 3.6 SSP Group . . . . . . . . . . .704.6 13.0 Tesco . . . . . . . . . . . . . . .237.8 1.0 UDG Healthcare Pu . . . .669.5 2.0

17

DOW JONES

   

 Allied Minds . . . . . . . . . .78.8 -0.7 Arrow Global Grou . . . .218.5 -9.0 Ashmore Group . . . . . . .351.8 2.4 Brewin Dolphin Ho . . . .344.6 4.6 Charles Taylor . . . . . . . .266.0 -9.0 Charter Court Fin . . . . . .341.0 4.0 City of London In . . . . .400.0 10.0 CMC Markets . . . . . . . . . .161.6 1.6 Coats Group . . . . . . . . . .82.5 -0.4 Georgia Capital . . . . . .1007.4 17.3 Hargreaves Lansdo . . .2190.0 -14.0 IG Group Holdings . . . .876.5 -11.5 IntegraFin Holdin . . . . .359.0 -1.0 Intermediate Capi . . .1048.0 17.0 International Per . . . . .227.0 4.4 Investec . . . . . . . . . . . .488.9 3.9 IP Group . . . . . . . . . . . . .125.2 2.6 John Laing Group . . . . .312.8 1.6 JTC . . . . . . . . . . . . . . . . .401.0 -4.0 Jupiter Fund Mana . . . .406.2 -1.7 Liontrust Asset M . . . . .632.0 -20.0 LMS Capital . . . . . . . . . . .52.3 0.0 London Finance & . . . . .42.5 0.0 London Stock Exch . . .4794.0 56.0 Man Group . . . . . . . . . . .170.3 1.4 OneSavings Bank . . . . . .411.2 -5.0 Paragon Banking G . . .456.4 1.0 Provident Financi . . . . .629.0 -3.2 Quilter . . . . . . . . . . . . . .133.0 1.2 Rathbone Brothers . . .2532.0 -38.0 Real Estate Credi . . . . . .172.0 -1.3 Record . . . . . . . . . . . . . . .41.5 0.0 River and Mercant . . . . .313.0 -7.0 S&U . . . . . . . . . . . . . . .2460.0 -20.0 Sanne Group . . . . . . . . .617.0 -11.0 Schroders . . . . . . . . . .2980.0 -7.0 Standard Life Abe . . . . .314.5 -2.5 TP ICAP . . . . . . . . . . . . .277.0 -2.5 VPC Specialty Len . . . . . .80.3 -0.3 Walker Crips Grou . . . . . .37.0 0.0 XPS Pensions Grou . . . .168.0 -5.0

MARKETS

   

Hang Seng. . . . . . . . . . . . . . . . . . 26345.04 -77.51 -0.29 Shanghai Composite . . . . . . . . . . . 2656.11 -8.69 -0.33 Straits Times. . . . . . . . . . . . . . . . . . 3124.65 14.74 0.47 ASX All Ordinaries. . . . . . . . . . . . . 6283.90 -3.70 -0.06

 







3M ..................................................................206.71 ABBVIE.............................................................93.24 ACCENTURE-A.................................................170.35 ADOBE SYSTEMS.............................................267.79 ALPHAB NON VTG-C......................................1162.82 ALPHABET-A..................................................1171.60 AMAZON.COM ..............................................1990.00 AMERICAN EXPRESS........................................107.88 AMGEN...........................................................199.50 APPLE.............................................................221.07 AT&T.................................................................33.42 BANK OF AMERICA...........................................30.43 BERKSHIRE HATH RG-B ..................................214.59 BOEING CO ......................................................353.41 CATERPILLAR ..................................................144.28 CHEVRON.........................................................115.79 CISCO SYSTEMS ................................................46.89 CITIGROUP ........................................................70.51 COCA-COLA CO .................................................46.24 COMCAST-A......................................................36.09 DOWDUPONT...................................................69.24 EXXON MOBIL....................................................83.13 FACEBOOK-A..................................................162.00 GOLDMAN SACHS GR.......................................228.15 HOME DEPOT ...................................................211.98 IBM .................................................................146.57 INTEL................................................................44.93 JOHNSON & JOHNSO.......................................139.36 JPMORGAN CHASE ..........................................113.08 MASTERCARD RG-A ........................................214.03 MCDONALD'S...................................................164.74 MEDTRONIC......................................................96.25 MERCK .............................................................69.86 MICROSOFT .......................................................111.71 NETFLIX..........................................................369.95 NIKE -B- ..........................................................83.00 NVIDIA...........................................................268.20 ORACLE ............................................................49.34 PEPSICO ...........................................................118.61 PFIZER ..............................................................42.41 PROCTER&GAMBLE............................................83.11 TRAVELERS COS ..............................................126.89 TWITTER...........................................................29.75 UNITEDHEALTH GRO.......................................262.67 UTD TECHS ......................................................133.89 VERIZON COMM................................................54.97 VISA RG-A.......................................................146.57 WALGREENS BOOTS .........................................70.38 WALMART ........................................................95.97 WALT DISNEY RG-DIS.....................................109.46 WELLS FARGO..................................................55.94

-5.07 0.06 -0.34 0.79 -14.54 -18.39 2.85 -0.43 0.03 -2.78 0.75 -0.42 -0.51 8.16 2.25 0.77 -0.14 1.08 0.22 -0.21 -0.84 0.27 -3.94 -2.06 -1.87 0.08 0.00 0.85 -1.35 0.58 0.12 0.17 0.78 0.47 14.02 0.37 -4.60 0.42 0.56 0.10 1.10 -0.96 -1.14 1.63 0.28 0.25 1.08 1.64 -0.67 -0.14 -1.44

259.77 125.86 171.03 270.94 1273.89 1291.44 2050.50 108.69 203.69 229.67 39.80 33.05 217.62 374.48 173.24 133.88 48.06 80.70 48.62 44.00 77.08 89.30 218.62 275.31 215.43 171.13 57.60 148.32 119.33 217.35 178.70 97.38 70.59 112.78 423.21 83.68 285.22 53.48 119.74 42.79 94.67 150.55 47.79 271.16 139.24 55.42 147.86 83.89 109.98 117.90 66.31

190.57 83.19 132.27 143.95 909.70 924.51 931.75 85.81 163.31 149.16 30.13 23.45 177.61 237.09 119.06 108.02 31.91 64.38 41.45 30.43 61.27 72.16 149.02 218.89 157.16 137.45 35.74 118.62 90.10 137.75 146.84 76.41 52.83 72.92 176.55 50.35 166.97 42.57 101.06 33.20 70.73 118.75 16.57 186.00 109.70 43.97 102.75 59.07 77.50 96.80 50.26


18

OPINION

THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

FORUM EDITED BY RACHEL CUNLIFFE

The EU needs dynamic new thinking, not lectures on unity

E

VEN a stopped clock is right twice a day. This should be adopted as the personal motto of European Commission president JeanClaude Juncker, or at least as the tagline for his final State of the Union address yesterday. “There is no applause when EU law dictates that Europeans have to change the clocks twice a year,” Juncker announced. “Member states should themselves decide whether their citizens live in summer or winter time. It is a question of subsidiarity…. We are out of time.” He had a point. The principle of subsidiarity is that the EU should have authority only for tasks which cannot be performed at a national level. Unfortunately, ceding the power to set Daylight saving time was where Juncker’s magnanimous giveaway to EU governments ended. The rest of his speech encouraged further integration on issues from migration to security, a bigger role for the European Defence Fund, a European Public Prosecutor’s Office, and a plea for something called “European sovereignty”. It was a smorgasbord of platitudes and inane calls to arms (“we will always be a global payer but it is time we started being a global player too”), peppered with half-baked policy ideas, that lacked any of the cohesion that Juncker and his brand of euro-federalists would like to see across Europe. But if it did have a central theme, it was one of lecturing admonishment: not a mediator of equals ready to listen and lead, but a schoolteacher scolding a disobedient class.

At a time when the continent is in turmoil, with populist, anti-EU parties gaining traction from Italy in the south to Sweden in the north, Juncker failed to either inspire passion for the European project or present a unifying vision for the bloc’s future. The nod towards changing sentiment in the wake of mass immigration, with the promise of more European border guards, was undermined by the rebuke that “where borders have been reinstated, they must be removed. Failure to do so would amount to an unacceptable step back”. For anyone who had hoped for a more flexible, dynamic, and above all realistic direction from the EU’s leaders, this was not it. In fact, the sheer pettiness on display was breathtaking. “No single member state could have put 26 satellites in orbit, for the benefit of 400m users worldwide,” Juncker gloated, when boasting about the Galileo satellite programme. He neglected to mention the €1bn that the UK has paid into Galileo, only for the EU to refuse Britain access post-Brexit. While the speech was reportedly intended to focus on European security, Juncker seemed happy to play fast and loose with Britain’s intelligence and counter-terrorism cooperation, for the sake of making a point about Brexit. And when it came to accepting responsibility for the EU’s many missteps over the past few years, he deflected. “I cannot accept the blame for every failure,” he said, implying that it is the European

Rachel Cunliffe Comment and features editor at City AM

Juncker’s speech was a smorgasbord of platitudes and inane calls to arms Council, made up of representatives from national governments, that is most at fault for the EU’s tensions. But perhaps what was most notable about the speech was not the content, but the timing. “Respecting the rule of law and abiding by Court decisions are not optional,” Juncker cautioned towards the end, in a thinly veiled warning to Hungary. Immediately after he finished speaking, the parliament voted for disciplinary action against Hungary for breaching the EU’s core values. There is much to be concerned about with the Hungarian government’s move towards what its Prime Minister Viktor Orban calls “illiberal democracy”. New laws criminalise lawyers and activists who help migrants, while crackdowns on the media and pressure on the independence of the judiciary have sparked alarm across western democracies. Nonetheless, the EU’s understand-

able efforts to bring Hungary into line could backfire by playing into Orban’s hands – allowing him to rail further against an EU elite. Quiet diplomacy may be better than a megaphone. Juncker is also on thin ice when criticising certain member states for violating EU rules. Only last week, the EU’s own ombudsman condemned the promotion of Juncker’s chief of staff Martin Selmayr as the EU’s top civil servant, in a power grab more suited to Game of Thrones than a democratic institution. The appointment “stretched and possibly even overstretched the limits of the law” and put the “wider legitimacy of the EU... at unnecessary risk”. As a man who helped his favoured aide seize the top job with no regard for scrutiny or due process, Juncker’s lectures to other EU leaders about the rule of law ring hollow. Juncker concluded with another maxim of stopped-clock accuracy: “Patriotism is a virtue. Unchecked nationalism is riddled with both poison and deceit.” Sadly, it is partly his own stubbornness and lack of self-awareness that has provoked the nascent nationalist movements of Europe towards the extremes. The EU does face immense crossborder challenges – from the risk of economic crisis to the constant and ever-evolving threat of terrorism. Cooperation and unity are indeed vital to its continued success. But in a democracy, cooperation must be voluntary, not forced. And nothing in this State of the Union suggested that Juncker or his cohorts have any idea how to make that a reality.

John McDonnell would hound gig workers out of their jobs with his socialist dystopia

S

INCE becoming shadow chancellor, John McDonnell has worn the appearance of a wolf in sheep’s clothing. This week, he reverted to type as a wolf in wolf’s clothing. His speech at the TUC Congress on the gig economy shouldn’t surprise us. This is, after all, a man who waved Mao’s Little Red Book when he first stood up at the despatch box in the House of Commons. Around 2.8m workers operate in the gig economy, trading the benefits of increased flexibility against reduced job security. Nobody forces people to work in this way for Deliveroo and Uber, or a host of other gig platforms. And yet, McDonnell’s proposals, to give gig workers the same rights as employees, would force many of these people out of work. The gig economy business model is explicitly based on a labour cost which excludes benefits such as sick pay or parental leave. Meddle with that cost, and more

rights will equal fewer jobs. Fundamentally, before wealth can be re-distributed, it has to be created. New models of digital entrepreneurship have created millions of jobs which otherwise might not have existed – a fact which seems to have escaped Labour’s policymakers. McDonnell lives in an imaginary socialist utopia where lumping more cost on business has no consequence. And when he talks of a workplace environment of insecurity not seen since the 1930s, he would do well to remember that unemployment is at record lows. Every Labour government has left office with unemployment higher than when it was elected – and you can have a copper-bottomed guarantee that would be the case with Jeremy Corbyn and McDonnell in Downing Street. We are beginning to see just how coercive their economic policy could be if Labour were to get into power. If they don’t steal hardearned income through taxation,

Graeme Leach

they’ll forcibly mandate responsibilities that businesses can ill-afford. The great benefit of a free-market system is that it voluntarily brings together employers and employees in a process of beneficial mutual exchange. The government does not have the right to intervene in this process and override the rights of employers. Whether it be gig economy protections or a higher minimum wage, meddling with the labour market has consequences. And when the next economic downturn comes, the first people to lose their jobs will be many of those who are cheering McDonnell this week.

Most frustratingly, the gig economy is not a problem that needs to be fixed. A recent McKinsey study found that, although many people expressed anxiety about losing traditional employment protections, the decision to enter the gig economy was for most a free choice. They liked the independence and flexibility the gig economy model provided. But McDonnell sees every employer as an exploitative capitalist. His ideology prevents him from seeing the truth: that the overwhelming majority of employers are considerate of their employees, and recognise that if they don’t treat them well, they will go and work somewhere else. If Labour’s restrictive policies haven’t destroyed all the alternative jobs, that is. There are none so blind as those who will not see. £ Graeme Leach is chief executive and chief economist of Macronomics, a macroeconomic, geopolitical and future megatrends research consultancy.

LETTERS TO THE EDITOR

Tinker, Taylor [Re: Should gig economy workers be given more rights and protections, as John McDonnell suggests?] John McDonnell’s speech will have set alarm bells ringing for many employers. He pledged that a Labour government would radically reform employment law, affording “trade union rights” to all and rewriting rules governing industrial action. Earlier, he had talked of affording equal employment rights to all, including gig economy workers. These promises are in contrast to more balanced recommendations which we set out in the Taylor Review into Modern Working Practices. Taylor’s proposals included material employment law reform aiming to protect exploited workers, for example making it difficult for unscrupulous employers to push individuals into quasi-self-employment to circumvent employment rights. Our overall analysis, however, was that these changes should be made within the context of a framework which provides flexibility and economic advantage. Had the government taken swift action to implement key Taylor Review recommendations, it may have neutralised a political issue. Instead, its deliberations on consultation continue, and employment law is at risk of becoming a key election battleground. The best option open to business now is to actively lobby for Taylor to be adopted and so avoid that politicisation. Diane Nicol, employment partner at Pinsent Masons and member of the Taylor Review panel

BEST OF TWITTER Article 13 and its copyright filters have passed from EU Parliament. Now they stilll need to undergo a final vote and then get implemented by the member states based on their interpretations. It’s hard to say what will happen to memes and parodies, but this surely doesn’t help. @grande1899 Article 13 has been approved for Europe, meaning the internet can now legally be censored. Memes, fanart, fanfiction, and so on can breach copyright laws, despite hundreds of thousands voting against the article. This is not a democracy, it’s a joke. @lost_wanderess The EP rejected expert tech evidence and academic analysis and have adopted article 11 and article 13 in the mandate for negotiations ahead of the trilogues. This is one of the last final steps – now it’s up to the Member States to fight EU censorship in name of copyright @asta_fish As the world goes madder ( in the English sense ) President Putin assures the world that the two men who flew to the UK to murder the Skripals are not criminals, only “civilians” Just a couple of ordinary, everyday, innocent Russians going abroad on a package poisoning holiday @JohnCleese


THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

WE WANT TO HEAR YOUR VIEWS

› E:theforum@cityam.com COMMENT AT:cityam.com/forum

Britain’s hostility to overseas students puts trade deals at risk

S

OME 11 years ago, in parliament, I personally spearheaded the change in rules to allow international students to automatically stay on in Britain and work for two years after graduation. Sadly, this was removed by the government in 2012, under the then home secretary Theresa May. Today, that inward-looking attitude hasn’t changed. This week, the Migration Advisory Committee (MAC) published its report on international students, and disappointingly recommended that they are not to removed from net migration statistics. Categorising international students as immigrants while openly trying to reduce net migration to under 100,000 per year sends out a negative perception of Britain around the world. It is incomprehensible that the MAC won’t recommend removing international students from these figures – when its own report states that many respondents to its call for evidence advocated this. Our competitor countries – the US, Canada, and Australia – all categorise international students as temporary residents or visitors and exclude them from the net migration statistics, because they understand their value. International students are a jewel in Britain’s crown, bringing £26bn into the UK economy each year. But they are more than just statistics: they are a vital source of soft power too, and central to Britain’s post-Brexit relationships. To understand this, one only needs to look at India, which has been disproportionately affected by the government’s hostile attitude towards migrants. The government has recently

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Karan Bilimoria

increased the list of countries eligible for a fast-track visa for international students, adding 11 more countries including China, but excluding India. The stability in Chinese students coming to the UK compared to the fall in Indian students – 24,000 down to 10,000 since 2010 – is highlighted in the MAC report. Demand by Indians to study abroad is increasing at eight per cent each year, but they are being put off studying in the UK. And it is no wonder, when trade secretary Liam Fox makes comments about how many Indian students have “outstayed their welcome”. (This, as found by the MAC itself, is completely untrue, with 97.4 per cent of all international students departing on time.) Such policies and attitudes have been a kick in the teeth for UK-India relations. With Brexit looming, the British gov-

More than just statistics, they are a vital source of soft power, central to postBrexit relationships

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OPINION

ernment is constantly talking about “going global” and doing free trade deals with countries such as India. But trade deals are about more than tariffs and duties: they are strongly linked to the movement of people as well. India is the fastest-growing major economy in the world, and Prime Minister Narendra Modi has openly stated how important the mobility of the country’s youth is internationally. And yet, the UK government’s hostile attitude towards Indian students means any talk of a free trade deal with India is a pie in the sky. Most absurdly, the MAC report does acknowledge the value of international students, and indeed recommends actively increasing the number. But this vague and ineffectual platitude is unlikely to have any impact on government policy. After over a year of hard work and 2,000 pages worth of evidence, this is immensely disappointing. As co-chair of the All-Party Parliamentary Group for International Students, my colleagues and I have launched our own inquiry, due to be reported later this autumn. I hope that this will succeed where the MAC report has failed in being the wake-up call to the huge importance of international students, spurring the policy changes that the university sector so desperately needs. This week’s report was a wasted opportunity. Without a change in attitude, the UK will continue to lose out big time – with international students, with India, and with the world. £ Lord Bilimoria is founder and chairman of Cobra Beer, and president of the UK Council for International Student Affairs.

:@cityam

DEBATE Does the increasingly global reach of the tech giants require a regulatory watchdog? Even Mark Zuckerberg himself has admitted that some regulation of his industry is necessary. A regulatory watchdog would ensure that the activity of Facebook and other tech titans is scrutinised, to make it more transparent and regulate its market power, without stifling innovation. For this type of watchdog to have the opportunity to make a positive and measurable impact, it needs to have a global outlook. We’re seeing a shift in behaviour that means the global media market is no longer managed locally, or even nationally. In Europe, the introduction of GDPR and the growing appetite for enforcement reflects the change in attitudes towards these businesses. But this need for regulation

Regulation was designed for a world in which change was incremental or episodic. If the tech giants have absented themselves of responsibility for adequately controlling problematic content, the idea that a watchdog could better navigate an industry defined by exponential, technology-driven change is questionable. The challenge is vast, and a regulatory watchdog would struggle to cope with the complexities of these businesses: this is not an “industry” delivering content and connectivity, but rather a nexus of cross-category platforms that also provide shopping, finance, and management. They are increasingly seamless interfaces to our world. The multi-sector nature of this

Editorial Editor Christian May | Deputy Editor Julian Harris | News Editor Shruti Tripathi Chopra | Comment & Features Editor Rachel Cunliffe | Lifestyle Editor Steve Dinneen | Sports Editor Frank Dalleres | Head of Politics and Investigations Catherine Neilan | Creative Director Billy Breton

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YES RUTH MANIELEVITCH

is now expanding far further than the EU, with California, India, and Brazil all announcing similar guidelines to protect consumers. With this in mind, we expect to see more regulatory guidelines being adopted globally over the coming months, to move digital businesses onto a level playing field. £ Ruth Manielevitch is director of business development EMEA at Taptica.

NO NIGEL VAZ

transformative trend makes the tech giants themselves best-placed to understand and engineer necessary safeguards to accompany innovation. They must commit to meaningful selfregulation to deliver valuable and responsible services. If consumers can’t trust them, a greater threat than regulation is customer exodus. £ Nigel Vaz is chief executive of Publicis.Sapient EMEA and APAC.

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19


20

FEATURE

THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

ALTERNATIVE FINANCE Katherine Denham speaks to the chief executive of Zopa about how to survive another financial crisis

I

N THE grand scheme of financial services, the peer-to-peer lending industry is young. With the sector now in its early teens, it’s this immaturity that often seems to spark questions about resilience, particularly how peer-to-peer companies would cope during another economic downturn. Those in defence of the industry tend to use Zopa as an example: a peer-to-peer firm that survived and thrived during this period. Launched in 2005 by five forwardthinking entrepreneurs, Zopa was the first lender of its kind, and the pioneer of the peer-to-peer industry. The idea for Zopa was twofold: its founders saw a bunch of inefficiencies in banking, and recognised the powerful force of technology. The company is centred around making money simpler and fairer for consumers – connecting people who want to borrow money with lenders (or investors) who want to make a decent return.

STRESS TEST

There is now an ever-expanding crowd of peer-to-peer lenders, but what gives Zopa the edge is its firsthand experience during the turmoil of 2008. Jaidev Janardana, who was taken on as chief executive in 2015, says the company applies today’s model to data from 2008 in order to inform its underwriting. “We still learn from that experience in a philosophical way, because we now price in a manner that ensures that if 2008 were to repeat itself, our lenders should still make a return,” he tells me, pointing out that many of the newer companies don’t have this trove of data to learn from. “Companies will stress test, but while we have the actual data, they have to be more assumption-based than us.” But Janardana also stresses that there’s nothing inherent about the business model that would make peer-to-peer lenders weaker or stronger than banks.

“It’s about how well a particular company manages its risk, and how diversified its lending is.” Nimble fintech firms can even be in a stronger position compared to their banking peers. “What a lot of people don’t realise is that many peer-to-peer businesses succeeded and grew because of the crisis,” Janardana says. What he means is that disciplined businesses with good standards of credit management were given an opportunity to plug the finance gap left by the companies that were forced to retract.

CREDIT CRUTCH

The mass of consumer debt in the UK has been described as a “time bomb”, and regulators have been toughening up their stance over recent months. I ask Janardana what he thinks about the FCA’s clampdown on parts of the consumer credit sector, and he accepts that it’s damaging for consumers to recklessly borrow lots of money. But he stresses that Zopa only lends responsibly and has processes in place to make sure that its loans are affordable to borrowers. A typical Zopa customer is someone in their mid-30s with a stable income averaging at £36,000 to £37,000 a year. People borrow £7,700 on average, and many use the money for one-off, “life purchases”, such as buying a new car or for home improvement. “The ideal behaviour is for people to take out a loan every three to four years, and pay it down over a period of time,” says Janardana. “We won’t lend out again for another six months, and we make sure you’re not behind on other debt payments.”

TECH TURMOIL

Over the past few years, we’ve seen many of the major banks migrate from the clunky legacy systems, installing technology that is fit for the modern era. It’s an arduous process that is often riddled with problems, while some businesses are struggling to ensure that customer information is safe from hackers. TSB’s recent saga certainly springs to mind. I ask Janardana, who is an engineer by trade, how Zopa stays ahead of the game. He says it’s about creating a platform and operating model that allows you to continually refresh the technology, so that updates become a continuous part of the process, rather than a huge project now and again.

“The b a n k s have legacy tech, but if we don’t regularly update our technology, in five years we will also have legacy tech. “We have invested in micro-server-based (or modular) architecture. That means we can continuously change parts of the technology, without changing the whole thing; there’s no fear that you have to migrate the whole platform because the platform doesn’t exist.” While Janardana isn’t a web developer, he says that having a handle on coding is important when leading a tech-orientated business like Zopa. “At the end of the day, our product is delivered through tech. Part of the reason UK banking has a huge technology deficit is because senior managers think that it’s someone else’s job to figure out a way to solve any serious problems with the digital side of the business – and that means you’ve only got one person in the room who can intelligently talk about technology. That cannot lead to great results. “How can a senior manager be held to account if they don’t understand the technology?”

BANKING ON CHANGE

Zopa is again shaking up financial services by launching a challenger bank. It hopes be able to offer credit cards next year – dependent, of course, on it securing a banking

How can a senior manager be held to account if they don’t understand the technology? licence. According to Janardana, many borrowers have three or four credit cards, and around half of these people end up paying interest without planning to. “There is a place for a far simpler product, where customers don’t have to feel that they are running on a hamster wheel,” he says. Again, it’s about improving the experience for customers, using technology to “nudge” people and help them pay down their debt. But the bank offering could also prove helpful for those who lend through Zopa, because many have big pots of savings. “A good part of lenders’ money is currently deposited in banks, where the digital experience is poor,” says Janardana. “And while many savings accounts start with high interest rates, the interest rate gets worse once you renew – so banks are disincentivising loyalty.” The Zopa boss says that the company wants to launch simple products that have a single rate, staying away from offers that “lull customers into a false sense of security” by offering teaser deals. But Janardana stresses that Zopa’s peer-to-peer business will continue to exist. “We have an emotional commitment to that – it’s a thing we invented.

THE P2P PIONEER


CITYAM.COM

THURSDAY 13 SEPTEMBER 2018

TECHNOLOGY

: @city_am

LIFE&STYLE

21

: @cityamlife

EDITED BY STEVE HOGARTY

THE NEW IPHONE XS LAUNCHES 21 SEPTEMBER The update to last year’s iPhone X will be available in surgical-grade stainless steel and is IP68 water resistant, meaning it can take a dunk in saltwater, pool water or even, according to Apple, a pint of beer. While smaller than an iPhone 8 Plus, it has a larger screen at 5.8-inches, while HDR tech in the display allows for 60 per cent greater dynamic range. The iPhone XS starts at $999 for the 64GB version, the same price as the original iPhone X.

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THE APPLE WATCH SERIES 4 CAN TELL IF YOU’VE TRIPPED The latest generation of Apple Watch introduces a range of new health features, including an ECG monitor to more accurately track your ticker. The watch can now diagnose heart problems such as arrhythmia, and if you fall over and stop moving entirely, the watch sends a message to your emergency contacts along with your location. No word yet on whether you can set it to automatically wipe your internet search history too.

THINGS WE LEARNED AT APPLE’S IPHONE EVENT

A new generation of iPhones, and a smartwatch that won’t let you die... THERE’S A SUPERSIZED VERSION CALLED THE IPHONE XS MAX The biggest news was the announcement of the iPhone XS Max, which packs a mammoth 6.5-inch screen into a device that’s the same size as the iPhone 8 Plus. It’s the largest ever display on an iPhone, and at 458dpi, it boasts the same pixel density as the smaller XS. Battery life is improved, with 90 minutes of extra juice per charge versus the iPhone X. The XS Max starts from $1,099 for the 64GB model.

PHONE SAMSUNG GALAXY NOTE 9 FROM £899, SAMSUNG.COM

hhhhi | BY STEVE HOGARTY

T

he latest phone in Samsung’s Note series is all about marginal gains. The screen has grown from 6.3 inches to 6.4 inches, the battery has been boosted to 4,000mAh, and the storage options to one whole terabyte, a record-breaking memory capacity that, for phones, was pure hyperbole only a few years ago. Like saying you could do a bajillion pushups. It hardly needs stating that the Note 9 is the best Note ever made – Samsung would be in real trouble if it decided to start rolling things back now – but as cranked up to the nines as the specs may be, the pinnacle of Samsung’s offerings doesn’t offer much to get truly excited about. It has the biggest screen, the fastest processor, the best camera, the most storage, and a cool little stylus pen with a fidget-clicker that slides in and out real nice. To call it a workhorse is giving horses too much credit. Horses are hoofy-slackers by comparison. Horses are lazy. The Note 9 is the kitchen-sink

powerhouse for the person who needs their phone to do everything that it’s possible for an Android phone to do. But with the best will in the world, there’s very little new to say about the glossy sequel to the Note 8 and S9 Plus. It doesn’t light my fire, (Samsung has made very sure it won’t light any fires), it’s just supposed to be extremely good. The improved camera has drafted in all of the changes introduced for this year’s Galaxy S9 Plus. So it’s a dual-camera setup, with wide-angle and telephoto lenses working in tandem to allow for sharp optical zooming and some really quite remarkable low-light and night-time shots. Clever software recognises blurry shots, or closed eyes, and tunes the image to suit the subject. If you’ve never been convinced to use a stylus with a phone then jog along, this isn’t the phone to convert you, but stylus fans will appreciate the S Pen’s new functions, allowed by its low-power Bluetooth capabilities. The button on the side of the S Pen can be used to trigger actions, such as advancing a slide on a presentation, or launching whichever app you assign to it. DeX, which allows you to turn the phone into a desktop

IT’S POWERED BY THE NEW A12 BIONIC CHIP All three of the new iPhones are powered by Apple’s seven nanometer A12 Bionic chip, which the company proudly announced is capable of 5 trillion operations per second – we’re assured that’s loads. Among its other duties, the chip enables Smart HDR in the camera hardware, which shoots multiple shots of the same instant and merges them into one well balanced image. Apps will launch 30 per cent faster too, though they say that with every new iPhone.

computer by plugging it into a screen, no longer requires a bulky adapter. Instead it works with a regular USB Type-C to HDMI cable, providing an Android desktop experience that’s kind of useful in a set of specific situations, if not quite fully featured enough to entirely replace your laptop. That the phone’s screen turns into a trackpad is a nice touch, but for real productivity you’ll need a keyboard, and at that point you may as well bring your laptop with you. Though it’s slowly improving, software is often a sticking point for Samsung phones. The Note 9 runs Android 8.1 Oreo, and there’s no word yet on when it will upgrade to the latest version of the operating system, Android 9 Pie. And out of the box, the

A terabyte in a phone was pure hyperbole only a few years ago, like saying you could do a bajillion pushups

THERE’S A CHEAPER ONE CALLED THE IPHONE XR While it looks like a larger version of the iPhone XS, the iPhone XR makes a few notable cuts in pursuit of a smaller pricetag. It has a lowergrade, 326dpi LED screen, which Apple is calling “Liquid Retina”. It has only a single lens and no 3D Touch, but uses the A12 chip’s neural engine trickery to create portrait-style depth of field effects from that one lens, similar to how the Pixel 2 does it. The iPhone XR will start from $749 and launches later on 26 October.

phone is littered with the usual redundant or unwanted apps, the detritus of third-party commercial deals or just Samsung’s reluctance to rely too heavily on Google’s ecosystem. The latter is a reasonable enough concern, but who in their right mind is using ‘Samsung Internet’ over Google Chrome? And nobody, having spent at least £900 on a phone, should be seeing unsolicited notifications to sign-in to a pre-installed LinkedIn app. The first time you fire up any new Samsung phone is a cacophony of notifications, a landslide of alerts as every feature and app attempts to introduce itself to you at the same time, and here it’s no different. It’s not a premium experience. But wrangle with the software long enough – and uninstall the stuff you don’t need – and you’ll get the Note 9 into some kind of shape that you’re happy with. And that shape will be the shape of the most sophisticated Android phone you can buy. It is slightly bigger, slightly faster, slightly better in every regard, and greatly more expensive than the next best thing. It’s a phone for those who refuse to compromise on specs, and have the payslips to back it up.


22

FEATURE

THURSDAY 13 SEPTEMBER 2018

CITYAM.COM

OFFICE POLITICS

Scaleups must leap the confidence gap British firms are worrying how to achieve growth, but their fears share a root cause Andy Snuggs

I

T’S A well-worn fact that small businesses are the backbone of Britain. It’s also well-known that they have a high failure rate, as four tenths of SMEs fail within five years. Far less well explored are the reasons behind this failure rate. To better understand the challenges facing these businesses as they attempt to scale, we conducted research with a range of questions about their ambitions, confidences, barriers and concerns. Our research revealed that the UK’s scaling SMEs felt very confident that they will achieve their growth targets. But when it comes to organising their strategies and specific areas of their business to be ready for that growth, gaps began to appear. These confidence gaps could fundamentally hamper scaleup companies from achieving their goals.

Startups face numerous challenges when trying to scale, from recruitment, to creating and sustaining the right culture and values, to developing a great customer experience, and handing over responsibilities to others. These are all issues which can be tricky for business founders, who are used to taking the lead and being involved in many aspects of their concerns from day one. Recruitment in particular proves to be a major source of confidence concern flagged in our findings. While 93 per cent of the businesses we spoke to believed that recruitment was important to their growth plans, three quarters of those same businesses were very concerned about bringing the right people in. And one third were anxious that their recruitment challenge was not being tackled. Culture proved another sticking point on the road to scaleup success. Some 82 per cent of our scaling businesses were concerned or very concerned about creating the right culture in the business as they grew, but once again a third were worried that this challenge also was not being met in their businesses. This trend became more defined as we looked into other areas of the busi-

STUCK IN A RUT Unstuck Free

Confidence gaps could fundamentally hamper SMEs from achieving their goals

ness, from creating a clear vision for the organisation to unify around, to the leaders having confidence in their delegation – large numbers were worried about their strategies and abilities to meet these challenges. As the research feedback went on, it became clear that many of these concerns all have the same root cause. Ensuring that there was a motivating organising factor or idea behind employee engagement plans, even in small and scaling enterprises, would remove many of these worries. This organising idea, once set,

We all find ourselves stuck on a problem at work or in our personal lives. Maybe it’s a lack of confidence, or a difficult decision we need to take, but we can’t see a solution ahead. Unstuck works like a digital coach. It tries to diagnose why you’re stuck, then offers helpful tips to help get you, well, unstuck.

becomes a central touchstone for businesses and their employees to keep referring back to. It acts as a clear statement and direction for the business, which keeps everyone pointing in the same direction, while critical business focuses – maintaining sales, service delivery and operations – can also be sustained. The organising idea can then be filtered out through departments. It helps companies to set their customer strategies, HR practices and recruitment process, marketing and communication needs, as well as operational processes. These are all important when it comes to ensuring the company can not only meet and exceed its commercial targets, but also present a thriving and functional business to potential future investors. While the immediate future has many challenges for scaling companies around Britain, there are clear steps which company founders can take to remove some of their concerns. Most telling from our research is that they need to focus on ensuring they have absolute transparency on the company’s direction and its goals. By uniting their employees and stakeholders with a common organising idea, business leaders will ensure that they are set up in the best way possible for success. £ Andy Snuggs is managing partner of Future Kings.


CITYAM.COM

THURSDAY 13 SEPTEMBER 2018

T

HE shareholders of Premiership Rugby Ltd agreed on Tuesday that the sale of a majority stake to global private equity firm and former Formula One owners, CVC Capital Partners, is not their “preferred option”. The deal would have seen CVC purchase a 51 per cent stake in the Premiership for a reported £275m. The result of the vote is not surprising as it required the unanimous approval of all 13 member clubs – the 12 Premiership sides plus London Irish. But how did the possible takeover come about and what does it mean for rugby union?

A NEED FOR CHANGE?

The Premiership clubs have endured financial difficulties over recent years, as they have struggled to cope with rising player salaries and increased competition. With the clubs making combined losses of £28.5m in 2016-17, it isn’t hard to see why many think the current model is unsustainable. The supporters of the takeover likely saw the immediate financial windfall – reportedly £17m per club – as too good to turn down. For many clubs this would go a long way towards clearing debts, while the involvement of a private equity firm also brings the lure of substantial investment and increased commercial revenue.

WHY WAS IT TURNED DOWN?

It seems some clubs felt CVC has undervalued the Premiership, with Bath owner Bruce Craig believing it is worth £800m. Others are uncomfortable with selling their majority stake and giving away control of the competition. The third objections relate to CVC themselves. Scepticism over their ability to deliver long term sustainable growth is added to by worries about the firm’s overall aims. Much as it did with Formula One, CVC’s motive will be to grow the value of the Premiership, with a view to making returns on its investment.

WHAT NEXT?

The vote doesn’t mean takeover talks are dead and the initial comments of PRL’s chairman, Ian Ritchie, after the meeting would seem to support this. It is also not out of the question that CVC will come back with a revised offer, while there have also been rumblings of other interested parties coming to the table. If a bidding war ensues, this could push up the price and lead to more

23

CONTINUED FROM BACK PAGE

to the professional game agreement with the Rugby Football Union. The agreement is in place until 2024, but it does not provide for the same levels of control enjoyed by many of the other top nations. This lack of centralised control has been a recurring issue fuelling the club versus country debate. With any future bidder keen to grow the commercial value of the Premiership, there is a concern that this could weaken the international side in the long run. However it could be argued that the value of the Premiership and the success of the England team go handin-hand. With so many considerations to balance it will be fascinating to see how the issue plays out.

would like to see Manchester City’s youngster Phil Foden given a callup. He’s got the ability to get on the ball in central areas and make things happen. He has barely featured for City this season, which is understandable given their depth of quality. But if Loftus-Cheek, Rashford, Fabian Delph and Danny Welbeck can be called up despite minimal game time, why can’t Foden? The 18-year-old is a different kind of player – like a young Jack Wilshere – who can make an impact, see difficult passes and knit together play up the pitch. I think not giving him a run-out against Switzerland was a missed opportunity by Gareth Southgate. It was difficult for Southgate, who had to weigh up trying to prevent a fourth consecutive defeat with trying out fringe players. It’s easy with hindsight, but only Danny Rose made an impression, with Jack Butland, James Tarkowski and Delph disappointing. Southgate wants to make England the best team in the world. To do so they need to improve on areas of weakness and not just play to their strengths. When they start fast, move the ball quickly and engineer counterattacks they’re excellent – but they need to work on breaking down settled defences. Jesse Lingard has been the brightest spark for some time now. Dele Alli is somewhat out of form and the last two games showed how much England rely on Raheem Sterling. Southgate has given the side an identity, settled on a formation and brought through several players. But until England identify and nurture an outstanding technical player in midfield in the mould of Paul Gascoigne I feel they will continue to fall short of their lofty aims. The problems young players like Rashford, Loftus-Cheek and Foden are experiencing, and the exodus of those moving to foreign leagues for game time, emphasise just why Southgate’s task is so difficult.

£ Chris Paget is a sports, talent and entertainment lawyer at Sheridans. @Talent_Lawyer

£ Trevor Steven is a former England footballer who has played at two World Cups. @TrevorSteven63

Rugby union faces a big financial decision, explains Chris Paget

SHOULD CLUBS GRAB THE MONEY? favourable terms for the clubs.

WHY THE INTEREST?

Notwithstanding that PRL revenues have reportedly grown 80 per cent over the past five years, CVC must see Premiership Rugby as an untapped commercial product. CVC perhaps viewed the Premiership’s broadcasting potential as a means of growing its fanbase domestically and abroad. The league’s current domestic deals with BT Sport and Channel 5 are meagre compared to football, but any bidder will want to close the gap. Similarly, overseas broadcasting revenue may be seen as a large potential growth area, as has been the case for the Premier League. While there are already a number of international broadcast partners onboard, there is certainly room for growth outside of the UK. Any overseas appeal will likely come with

certain challenges though, as rugby union doesn’t have the same international pull as football. However, the potential to grow a younger, more diverse and digitally native audience will certainly be a key factor to unlocking any commercial success. It could well be that any future bidder sees the outliers of Amazon Prime, YouTube, Twitter and Facebook as holding the key. None have fully committed to the sports industry yet, as say BT Sport did when it entered the market, but the general consensus is that it might not be far away.

WILL IT IMPACT ENGLAND?

Unlike in New Zealand and Ireland where players are centrally contracted, English players are contracted to their clubs. It is the clubs, therefore, that ultimately control their players, subject

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SPORT

CITYAM.COM

THURSDAY 13 SEPTEMBER 2018

PREMIERSHIP The questions behind the proposed takeover of rugby’s prize asset PAGE 23

SPORT LLORIS BANNED Tottenham captain admits drink-driving charge

SPORT DIGEST

TERRY TURNS DOWN SPARTAK MOSCOW OFFER

ÂŁ Former Chelsea captain John Terry has turned down a two-year deal from Spartak Moscow. The 37year-old left Aston Villa in May after his contract expired and was close to coming to an agreement with the Russian club. But he said yesterday he has decided against it after “assessing the move with my familyâ€?.

ENGLAND’S ANDERSON HAS NO PLANS TO RETIRE

ÂŁ England’s James Anderson says he has no plans to retire after becoming Test cricket’s most prolific seamer of all time. The 36-year-old wants to continue playing after claiming his 564th Test wicket to pass Australia’s Glenn McGrath on the all-time list and conclude England’s win over India at The Oval on Tuesday. “I don't really think about it,â€? he said. “I play my best when I focus on what’s ahead of me.â€?

YARNOLD COULD COME BACK AFTER SURGERY

Tottenham captain Hugo Lloris was given a 20-month driving ban and fined £50,000 yesterday after admitting getting behind the wheel while more than twice over the drink-drive limit. The 31-year-old (centre) spent the night in the cells on 24 August after being spotted driving erratically in Marylebone. Spurs boss Mauricio Pochettino will now decide whether to strip the Frenchman of the club’s captaincy.

ÂŁ Britain’s most decorated Winter Olympian Lizzy Yarnold says she could carry on competing after recovering from back surgery. The two-time gold medalist, 29, underwent an operation on her spine in July, but said she could still compete at Beijing 2022. “Age definitely wouldn’t stop me.â€? she said. “You could definitely carry on.â€?

EVANS COULD RETURN FROM BAN IN DAVIS CUP

£ Dan Evans could make a return to Great Britain’s Davis Cup team after serving a year-long ban for cocaine use. The 28-year-old has been selected in Team GB’s five-man squad for Friday’s tie with Uzbekistan in Glasgow. Also featuring are doubles players Jamie Murray and Dom Inglot and Jay Clarke and Cameron Norrie.

YATES TO LEAD BRITAIN AT WORLD CHAMPIONSHIPS

ÂŁ Vuelta a Espana frontrunner Simon Yates and his twin brother Adam will lead Britain’s team at the Road World Championships later this month. However, Tour de France winners Chris Froome and Geraint Thomas have missed out on selection due to a “mutual decisionâ€? with British Cycling. The event is in Austria from 23-30 September.

SURREY CLOSE TO FIRST TITLE IN 16 YEARS

£ Surrey begin today on the brink of a first County Championship title in 16 years after reaching 70-0 last night in pursuit of 272 to win against Worcestershire. Following Somerset’s thrashing by Hampshire, the county only need to avoid defeat today to seal the Division One title.

Lack of game time is hindering England’s youngsters

M

ARCUS Rashford scored both goals and was the stand-out player in England’s defeat by Spain and win over Switzerland, but his performances also served to underline a growing problem. Rashford is undoubtedly a talent, but he doesn’t get on the field enough. He’s in a difficult situation at Manchester United: he’s not going to get to play centrally because of Romelu Lukaku, so he is often used on the left-hand side, or

FOOTBALL COMMENT Trevor Steven from the bench. You’ve got to wonder how he’s going to improve, because you need minutes to do so. If you only get limited exposure your progress is

going to be stunted. His natural ability will work its way out, but it might take longer. Compare him to Kylian Mbappe, who plays every game for Paris Saint-Germain and France. The two have similar attributes, but obviously, despite being a year younger, Mbappe is well ahead. Rashford is still inconsistent with his finishing, despite taking his winning goal against Switzerland well. He has a long future with England, but he’s far from the finished article, so how will he get

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there if he’s not given the opportunities? The 20-year-old is in the unfortunate position of being behind Lukaku at his club and Harry Kane with England. He’s caught between a rock and a hard place with his development. Having scored in consecutive games for England his confidence will be high going back to United this weekend – but how long will that last if Jose Mourinho doesn’t trust him to play regularly? It’s a similar problem for Ruben

Loftus-Cheek, who failed to grasp his chance on Tuesday night. The midfielder has played just 33 minutes in the Premier League this season, yet was expected to get on the ball and drive the side forward. England are lacking a technically gifted player who is comfortable operating in tight areas under pressure. In the last two games there were far too many turnovers of possession. That’s one of the reasons why I £ CONTINUED ON PAGE 23

City A.M. (2018.09.13)  

City A.M. (2018.09.13)

City A.M. (2018.09.13)  

City A.M. (2018.09.13)

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