NICHOLAS EARL
THAMES Water owner Kemble has suffered a downgrade in the credit rating of its debts from influential agency Moody’s.
The bad news comes as the UK’s largest water supplier scrambles for cash to shore up operations and tame its £14bn debt pile.
ELON MUSK did to Twitter’s famed ‘Larry the bird’ logo what he has effectively done to the firm’s appeal to advertisers yesterday, killing it stone dead.
The firm has been rebranded ‘X’ as part of new plans to create what he calls a new super-app.
Recently appointed Twitter boss Linda Yaccarino outlined the company’s ambitious vision for X,
She tweeted: “X is the future state of unlimited interactivity – centred in audio, video, messaging, payments/banking – creating a global marketplace for ideas, goods, services, and opportunities. Powered by AI, X will connect us all in ways we’re just beginning to imagine.”
Musk bought the social media platform for $44bn (£34bn) last year. Since taking it over, the billionaire
bereft of life after the move
has cut costs, jobs and moderation in moves that have spooked advertisers, as have his occasionally controversial tweets –now to be known as ‘x’s.
Marketeers were yesterday unimpressed by the rebrand, with one consultancy boss describing the move as “marketing suicide”.
The firm is facing a battle for supremacy online after the launch of Meta-owned rival Threads.
“The big question many people are
asking today is whether Musk is a genius or if he has totally lost the plot,” Danni Hewson, head of financial analysis at AJ Bell said yesterday.
“To ditch the iconic blue bird at a time a real competitor is gnawing on its tail seems bonkers. But Musk is known to be a little bonkers and it seems to keep working for him.
“So if X can be everything he’s hinting it can be, maybe a little bonkers is all that’s really needed.”
The credit ratings agency has lowered its position on a £400m segment of Kemble’s debts –due 2026 – from B1 to B2, meaning it considers the sums to be highly speculative and a credit risk.
It has also maintained a negative investment outlook, warning Thames Water’s gearing remains high at nearly 80 per cent, raising questions over how it will fund its turnaround strategy to fix leaking pipes and sewage overflows.
This follows Ofwat’s decision in March to strengthen ringfencing conditions in the licences of water companies, alongside increased scrutiny on the financial resilience of Thames Water, which is Kemble’s core operating subsidiary.
CHRIS DORRELL
CREDIT SUISSE has been hit with a record £87m fine by the Prudential Regulation Authority (PRA) for its failures relating to the collapsed hedge fund Archegos Capital.
The fines form part of a coordinated global penalty, including actions from the Swiss regulator
Finma and the Federal Reserve, which will cost Credit Suisse over $387.5m (£302.3m).
The PRA criticised Credit Suisse’s “significant failures in risk management and governance” between the start of 2020 and the end of March 2021.
“This is the PRA’s highest fine and the only time a PRA enforcement
investigation has established breaches of four PRA fundamental rules,” the PRA said.
Credit Suisse would have faced a fine of £124.4m, but it was reduced after the bank agreed to resolve the issue rather than fight.
The fines are directed at Credit Suisse Securities and Credit Suisse International, which provided prime
brokerage services to Archegos and entered equity total return swaps with the fund. The PRA said the risk management fell “well below the regulatory standards required”.
“The failings were found to be symptomatic of an unsound risk culture within the business line,” the watchdog said.
UBS, which acquired Credit Suisse
in March, has already agreed to pay off the fines. Earlier this year, it said it had set aside $4bn for potential lawsuits relating to the takeover.
UBS said it “will implement its operational and risk management discipline and its culture across the combined organisation”.
Credit Suisse was contacted for comment.
GO TO TECH conferences, and much of the buzz revolves around ‘Web 3.0,’ a catch-all term for the future of the internet that even when pushed most of its proponents struggle to define. Perhaps, then, we should be grateful that government continues to tootle along with plain-old 2.0. It’s two years or so since Rishi Sunak coined the term Big Bang 2.0 in an interview with this very newspaper, but yesterday
Michael Gove added a new London-based ambition: Docklands 2.0, to the east and south of Canary Wharf in Thamesmead, Charlton and Beckton. It’s certainly an area prime for redevelopment, even if the architecture of the place holds
a soft spot in the heart of many a brutalism enthusiast. Needless to say, as with anything in Britain that involves spades in the ground, opposition popped up almost immediately. Business groups warned the plan would eat into precious industrial land. Others complained the scheme was not ambitious enough, avoiding the obvious fact that ambitious schemes in this country are effectively dead on arrival. Gove, in short, cannot win. If
anything, his ambition –neatly outlined in what was, in the abstract, a good speech –for a housebuilding revolution in this country only made it all the more tragic that Britain continues to slice into the life chances of whole generations by failing to put houses people want to live in in places they want to live. Our property-owning democracy of which we are so proud is a fraud; it is increasingly a pipe dream for even high-achieving youngsters to
THE FUR-BRIGADE A fireman yesterday after rescuing a cat and two rabbits from the Greek island of Rhodes, where the country’s largest wildfire evacuation is underway
get on the property ladder close enough to the office not to make the commute a misery, unless you happen to have a conveniently wealthy relative soon to meet their maker. A member of this paper’s senior staff was once asked in a TV interview how to fix Britain’s growth problem. “Open the doors and build some houses,” came the answer. It might not be politically palatable, but then, neither should trend growth as flat as the river on a still day.
RISHI SUNAK SIGNALS HE IS READY TO SOFTEN UK GREEN POLICIES
Rishi Sunak has indicated he is ready to soften green policies, saying he did not want to “hassle” voters and hitting the UK’s net zero carbon emissions target had to be done proportionately.
THE GUARDIAN MACRON SAYS FRANCE NEEDS RETURN TO AUTHORITY AFTER UNREST
Emmanuel Macron has said France needs a return to authority “at every level” after recent urban unrest over the police shooting of a teenager, saying poor parenting was part of the reason teenagers had taken to the streets.
FTC’S KHAN DEFENDS ANTITRUST RECORD AFTER MICROSOFT-ACTIVISION LOSS
Federal Trade Commission chair Lina Khan defended the agency’s record in court, pushing back on criticism in the wake of its unsuccessful challenge to Microsoft’s Activision takeover. “In the scheme of our merger enforcement program, losing two is OK,” she said.
THE PRICE cap is still “the biggest single risk to supplier profitability” the boss of Utilita Energy has warned, adding that he still had “no faith” in Ofgem’s oversight of the market.
Bill Bullen, chief executive of Utilita Energy, told City A.M. that increasing regulatory burdens such as the watchdog’s plans to tighten allowances for firms emerging from the energy crisis risked sapping the company’s balance sheet.
Ofgem has written several open letters to suppliers this summer, with Ofgem’s chief executive Jonathan Brear-
ley calling on energy firms to make sure they were financially stable.
The regulator has also revealed plans to review the price cap formula, which includes cutting allowances for suppliers and handing money back to customers. The allowances for suppliers is currently set at six per cent for standard credit bills, one per cent for direct debits and 0.4 per cent for those on prepayment meters.
Allowances were factored into the price cap to help suppliers claw back funds from establishing hedging for new customers and ensure market stability, which is added onto households'’bills.
But now that gas prices are coming down, the regulator wants to reduce the allowance.
“Jonathan Brearley wrote an open letter two weeks ago where he said basically we’ve not been funding the costs. How can he now be lecturing us all about financial adequacy? He’s the one who’s drained my balance sheet. So it’s absolute nonsense –I have no faith at all [in them],” Bullen said.
He suggested that
Bill Bullen, Utilita Energy’s chief executive
Ofgem were “just playing with numbers in a spreadsheet” while also questioning whether Ofgem had sufficient expertise to call on suppliers to be more efficient.
“They don’t really know what an efficient business is, as part of being efficient is being agile and innovative and all of the things they don’t really want you to do because that makes you too different and too difficult to regulate,” the energy boss added.
A spokesperson for
Ofgem said: “The team at Ofgem closely analyse allowances for suppliers to ensure they can recover costs, while protecting customers from excessive costs.” Bullen has also called on the government to grant more financial support to help households with energy bills this winter.
“We are going to see a bigger problem with affordability this winter than we had last year,” he said.
A government spokesperson said it was “working with consumer groups and industry to assess the best long-term approach to helping vulnerable households, as part of wider market reforms”.
GUY TAYLOR
RYANAIR boss Michael O’Leary has hit out at the European Commission (EC) over its handling of strike action by staff at French air traffic control.
Following Ryanair’s first quarter results, O’Leary told analysts on a conference call that the continuing failure of the EC to take action to address the air traffic control (ATC) strikes was “inexplicable” but “exactly what you’d expect from anything run by European governments and by the EC”.
French strikes have already affected 60 days of flying so far this year and hit major airlines across Europe.
“We have long complained about the 60-day French ATC strike and the EC continues to sit on its hands doing nothing,” O’Leary said.
Ryanair, which claims the dispute has forced it to cancel over 4,000 flights, is calling for the protection of flights pass-
ing through French airspace.
In an attack typical of the budget airline’s chief, O’Leary slammed EC president Ursula Von Der Leyen for “fobbing off” his correspondence.
“Nothing is being done for Europe. The minimum we’re calling for is protection of overflights during French ATC strikes and that hasn’t been delivered. Most of the ATC providers… are short staffed inexplicably, and are incapable of providing the staffing that’s necessary,” he said.
The strikes have caused chaos throughout Europe, with Easyjet cancelling 1,700 flights for the summer, citing airspace restrictions due to the ATC feud and war in Ukraine.
O’Leary’s comments came after Ryanair announced its first quarter results, which saw its profits for that quarter fly past pre-pandemic levels to €663m (£572m).
The EC was contacted for comment.
M&S chair Archie Norman’s recent efforts to boost the accessibility of the supermarket’s AGMs were not well received by shareholders
CHARLIE CONCHIE
FTSE 100 BOSSES are shutting out amateur investors from the market by using corporate waffle and overly technical language in their shareholder communication, a top investment platform has warned. Ministers and investment platforms have been looking to push individual
investors towards public markets again as part of a wider drive to reinvigorate UK listed companies.
However, in a letter to FTSE 100 chairs yesterday, Interactive Investor, the UK’s second biggest investment platform, said firms too often used jargon that is too difficult for the average retail investor to understand.
“It matters, because badly written
shareholder notifications are a barrier to engagement, lead to poor decisions and create stress,” Richard Wilson, chief of Interactive Investor, said. The firm backed a recent effort from M&S chair Archie Norman to boost shareholder democracy by allowing firms to hold digital-only AGMs, though this was met with rage from M&S shareholders.
MICHAEL GOVE will loosen planning laws to allow vacant shops to be converted into homes in his latest efforts to tackle the UK’s housing crisis.
The minister for housing yesterday revealed a slew of planning reforms as well as a further commitment to building over 1m new homes across England,
which is part of his party’s Conservative manifesto to build 300,000 homes a year by the mid-2020s.
“We are unequivocally, unapologetically and intensively concentrating our biggest efforts in the hearts of our cities,” Gove said.
Nick Diment, head of retail planning at global property consultancy Knight Frank, told City A.M. the use of permitted development allowing commercial space
THE UK ECONOMY narrowly avoided slipping into contraction territory in July, with a closely-watched index suggesting interest rate hikes are beginning to dampen demand.
The composite purchasing managers’ index (PMI) compiled by S&P Global Market Intelligence fell to 50.7 this month, from near to 53 in June, with 50 representing the distinction between growth and shrinkage.
“The UK economy has come close to stalling in July which, combined with gloomy forward-looking indicators, reignites recession worries,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said.
The Bank of England has lifted rates 13 times in a row to five per cent, while inflation has reached multi-decade highs over the past year. The Bank is expected to back three more rate increases, taking them to a peak of 5.75 per cent.
The index suggested the weakest rise in UK private sector output in six months.
The services index
sat at 51.5, down from 53.7 the month before, whilst both manufacturing indices –one measuring output and the other measuring sales –were both firmly in the mid-40s.
Total new export orders decreased at the steepest pace since November 2022, reflecting weaker trends in both the manufacturing and service sectors.
Some analysts suggested the numbers should give the Bank’s ratesetters pause. Many regard the PMI readings as a better barometer of economic health than the official GDP figures.
Samuel Tombs (pictured), chief economist at Pantheon Economics, suggested the readings would bolster the case for the Monetary Policy Committee to stop its rate-hiking cycle soon.
“The increase in interest rates delivered to date appears to be increasingly slowing the economy; the composite index fell to its lowest level since January, and to a level consistent with GDP merely holding steady,” he said.
“The drop in the composite orders index to 50.0, from 51.6 in June, suggests that the trend will not improve soon.”
to become residential is “nothing new”.
Gove also announced reforms of the planning system and rounds of investment to get through the backlog.
He pledged to simplify and speed up the process of updating local plans for new builds, and to invest in “quality planning” with £24m of new investment.
The UK’s housing crisis has been fuelled by a lack of supply, especially in the number of council and affordable homes.
JACK BARNETT
NEW DATA on the health of Europe’s economies suggested the continent is heading towards a recession.
A snapshot of the eurozone’s respective economies showed high inflation and the European Central Bank’s (ECB) efforts to tame it with interest rate rises are cooling activity. Hamburg Commercial Bank and S&P Global’s flash composite purchasing managers’ index (PMI) for the 20 members using the euro slipped to 48.9 in July, down from 49.9 in June.
A huge contraction in eurozone factory activity dragged overall growth into negative territory in the bloc. Manufacturing output fell to 42.7, its weakest level in 38 months and down from 43.4.
Germany –which had for decades relied on cheap Russian gas to propel its crucial industrial sector – has suffered a sharp fall in manufacturing output. The country’s factory PMI slid to 38.8 in July from 40.6. Its composite measure slid into shrinkage at 48.3, though services remained just about resilient.
A reading above 50 in closely-watched indices of economic growth compiled by Hamburg Commercial Bank and S&P Global represents economic growth
ALAN JONES
STRIKES by workers at Gatwick Airport have been suspended, with union members either accepting or being balloted on new pay offers, it was announced yesterday.
Unite said planned strikes by DHL workers – who are employed to provide ground handling services at
the airport – have been cancelled completely after they voted to accept a 15 per cent pay rise.
General secretary Sharon Graham said: “This is an excellent result secured by the steadfast position of our DHL members.”
ASC and Menzies workers are currently balloting on improved offers.
If the ASC workers reject the pay offer, they will go ahead with strike action scheduled between 28 July and 1 August as well as strikes between 4 and 8 August.
Strikes by Menzies workers between 28 July and 1 August have been suspended but if the offer is rejected strikes between 4 and 8 August will go ahead.
“The eurozone economy will likely move further into contraction territory in the months ahead, as the services sector keeps losing steam,” Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said.
M&C SAATCHI’s long-term chief executive Moray MacLennan will retire from the role after nearly three decades at the helm, it was announced yesterday.
The veteran, who was part of its founding team in 1995, will be replaced by chair and former Future CEO Zillah Byng-Thorne in the interim, until a permanent decision is made.
Byng-Thorne joined the firm just weeks ago as chair and non-executive director after a decade at the top of stock market darling Future.
M&C Saatchi said MacLennan will formally step down by 30 September.
MacLennan, who joined Saatchi & Saatchi in 1983, said: “It has been a rare privilege to work for
three decades with people I respect and like, creating work that has had an extraordinary impact on the world.
“M&C Saatchi is well set for the future and now is the right time to make way for fresh energy and ideas.”
The news comes as part of a wider leadership shakeup at the advertising giant, after chair Gareth Davis in January announced he would not seek reelection.
Analysts at Peel Hunt said Maclennan’s exit was “not ideal” for the firm, reasoning that it added “further uncertainty in an already challenged backdrop”.
Investors seemed unperturbed, however, with shares closing up 3.72 per cent yesterday.
The firm last year reported a net revenue of £271m, an almost 10 per cent year-onyear increase.
Born and raised: Born in Glasgow, and attended the University of Glasgow
First job: Graduate trainee with Nestle
Time in the booze trade: Served as chief financial officer for two years in the mid-noughties for First Quench Retailing, better known as Threshers, including the purchase of collapsed rival Unwins
Fighting fit: She followed that with a three-year stint at Fitness First as CFO, including a year as managing director of the German business, leading a successful turnaround
Revving up: Her first interim CEO role was at Auto Trader after two years as CFO
Future-proofed: Made her mark across 10 years as CEO at Future, where she became respected as one of the country’s most respected bosses before stepping down earlier this year Board experience: Has served on boards including THG as senior independent director, working with management to launch a successful IPO, and Flutter; she now sits on the boards of Trustpilot and Norwegian Cruise Holdings
Can we quote you on that? “A highly respected and accomplished executive with a strong track record of developing and delivering” –Norwegian’s release on her appointment
SHARES in S4 Capital plummeted to close down over 21 per cent yesterday after the digital advertising giant’s second quarter update failed to impress.
The company said its net revenue was below budget in the last few months due to the economic climate and reduced its target of like-for-like net revenue growth to 2-4 per cent, down significantly from its previous 6-10 per cent target.
S4, chaired by industry tycoon Sir Martin Sorrell, also suggested there may be job losses, with the firm saying it would maintain a “disciplined approach to cost management, including headcount and discretionary cost” amid the tech slowdown.
The firm added its net debt stood at £115m as of 30 June, and is expected to rise to between £180mthis year.
SWISS private bank Julius Baer has reaped the rewards of Credit Suisse’s collapse, with it yesterday reporting net inflows for the first half of the year. In the six months to June, the bank attracted CHF7.1bn (£6.4bn) in new money from wealthy clients, helping to bring assets under management to CHF441bn. This compared to net outflows of CHF1.1bn in the same period last year, when clients were spooked by economic volatility.
Profit at Julius Baer increased by 18 per cent to CHF532m, boosted by higher interest income which offset falling fee revenue.
Chief exec Philipp Rickenbacher pointed to Julius Baer’s attractiveness despite “uncertainties affecting client and market sentiment”.
Julius Baer is one of a number of Swiss banks that have sought to capitalise on the collapse of Credit Suisse earlier this year.
The bank hired 57 full-time relationship managers in an attempt
A WAVE OF consolidation is coming in the UK’s pension sector as bigger master trusts guzzle up smaller peers and the government pushes reform, a top UK pension chief has predicted.
Jamie Fiveash, the UK chief executive of pension firm Smart Pension, said the firm was actively scoping out a range of deals among its smaller employer-led schemes and other master trusts.
Smart last week announced it had snapped up its smaller master trust rival Evolve Pension, which ran the £750m Crystal Master Trust, to take its overall assets to over £4bn and total members to 1.1m.
The deal was a boost to Chancellor Jeremy Hunt and pensions regulators as they embark on a drive toward consolidation in the hope of unlocking fresh pools of capital and a wave of funding.
Earlier this month, Hunt announced plans to merge more pension schemes to allow funds to benefit from scale.
Smart Pension’s Fiveash told City A.M. that the sector was now poised for a flurry of mergers and acquisitions.
“You’ll move from around 1,800 single employee trust and 35 master trusts in the next five years, down to in the hun-
dreds in total and probably only about 20 master trusts,” he told City A.M. “It’s going to massively reduce, and the government and regulators are pushing towards that.”
Smart Pension has been on an acquisitive drive in recent years and has snapped up a range of defined contribution (DC) pension schemes, in which employees pay a set amount toward their pension pot and reap the returns.
The size of the schemes has swelled since the rollout of auto-enrolment in 2012 and master trusts have become vehicles for schemes to pool their assets.
Smart’s latest deal comes after it has already absorbed nine of its peers.
Fiveash said Smart was currently scoping out “between five and 10” more trusts with plans for potential deals in the next two years.
Schemes may also soon be under pressure to consolidate further. Hunt will grant powers to the Pensions Regulator to force underperforming DC schemes into mergers with successful peers.
The measures came alongside a commitment from some of the UK’s top insurance firms, which have ‘bought out’ the older defined benefit schemes, to commit five per cent of their assets to private unlisted companies.
to capitalise on the opportunities that Credit Suisse’s collapse presents. Analysts at Barclays said this should help new money generation over time.
“We are looking for the group to continue hiring, to benefit from the UBS acquisition of Credit Suisse,” the Barclays analysts said.
Deutsche Bank analyst Benjamin Goy noted Julius Baer “has the potential to be a major accelerator over the next two to three years”.
Over the course of the year its shares aretrading around 10 per cent higher.
THE BBC has apologised to Nigel Farage for suggesting he lacked the funds needed to hold an account at Coutts after the private bank cut ties with the former Ukip leader.
The BBC’s business editor Simon Jack made the apology after a story published by the corporation suggested Farage had his account shut for “falling below” the private bank’s wealth limit.
Farage later acquired dossiers
indicating his account was shut by Coutts, owned by Natwest Group, because it had found his public statements did “not align” with its values.
The original story was updated last Friday, with the BBC acknowledging “that the information we reported –that Coutts’s decision on Nigel Farage’s account did not involve considerations about his political views – turned out not to be accurate”.
It told readers that the headline and article had been updated to reflect the
fact that the “closure of Nigel Farage’s bank account came from a source”.
Jack yesterday tweeted: “The information on which we based our reporting on Nigel Farage and his bank accounts came from a trusted and senior source. However, the information turned out to be incomplete and inaccurate. Therefore I would like to apologise to Mr Farage.”
The former Brexit Party leader said he had received a letter from BBC News chief exec Deborah Turness, and added that he accepted the apology.
GUY TAYLOR
SADIQ KHAN does not want to solve congestion problems for London’s car users, the boss of private hire taxi firm Addison Lee has said.
“I just think that definitely the congestion in London should be something we want to solve,” Liam Griffin told City A.M., but said “I’m not
sure Khan wants to solve it for cars.”
Amid a focus on the introduction of rail, cycling and bus routes, Griffin argued there had been a lack of thought put into the mayor’s strategy for effectively handling traffic for car and taxi drivers, which is fuelling the capital’s slowdown.
London’s busy red routes – which carry up to 30 per cent of the capital’s
traffic despite making up only five per cent of its roads – are “not world class infrastructure,” Griffin said, and “as a consequence, traffic slows down”.
A spokesperson for the mayor of London said that since 2016, Khan has “delivered the Hopper bus fare, the Night Tube, the Elizabeth line and made TfL fares 12 per cent cheaper than they would have been.”
SHARES in Vodafone were given a needed nudge yesterday after an update from the ailing telecoms giant showed its turnaround strategy may be on its way to bearing fruit.
In what it described as a “better” first quarterly earnings report than what was forecast, Vodafone yesterday told markets it had seen a near-six per cent year-on-year revenue uplift in the UK and a nine per cent increase in its African business, though revenues in Italy, Spain and the vital German market continued to slip. Shares in the firm, which have fallen around 40 per cent over the last year, rose to close up near 3.84 per cent after the update.
Vodafone chief Margherita Della Valle (pictured) said the firm had seen “strong trad-
ing” in its business segment.
“As we progress our plans to transform Vodafone, we have achieved a better service revenue performance across almost all of our markets,” she said.
“Looking ahead, we have taken the first steps of our action plan focused on customers, simplicity and growth, but we have much more still to do.”
Along with the update, Vodafone also announced the appointment of SAP finance boss Luka Mucic as its new CFO. It comes as the firm explores potential merger possibilities with Three which, if approved, would see the firm plan to invest £11bn in upgrading the UK’s 5G network.
Hargreaves Lansdown analyst Matt Britzman said the results showed “tentative signs of green shoots”, though cautioned the firm still had “a long way to go”.
LIKE A Big Mac on a hangover, Vodafone’s share price bump yesterday will offer only temporary relief. New boss Margherita Della Valle has inherited the mother of all morning-afters from Nick Read, taking over a telco losing revenue in key European markets and a bloated corporate structure.
To her credit, the Vodafone lifer has taken something of a scorched earth approach since taking the top job, announcing plans to radically slim down the firm and putting more emphasis on business services. There were promising signs from the
latter in yesterday’s update, and upticks in the UK and in the Vodacom business in Africa were certainly welcome.
But her biggest challenge will be to turn round the firm’s performance in Germany, Italy and Spain.
As with hangovers, sometimes the only answer is to be patient. Della Valle will be hoping she can persuade investors to give her own version of corporate paracetamol time to kick in.
TRAIN drivers will stage a fresh overtime ban in August, the Aslef Union announced yesterday, continuing a long running dispute over pay and conditions.
Aslef workers will refuse to work overtime from 7 to 12 August in action that the union said will “seriously disrupt services”.
Services included in the overtime ban are routes which serve major London hubs, including Thameslink, Great Western, Avanti West Coast and the Gatwick Express.
April negotiations saw the Rail Delivery Group, which represents train operators, offer a four per pay rise, which Aslef refused.
The news comes amid industrial disruption this week, with RMT members on Sunday launching rolling strike action which will continue through to 29 July.
While the strikes were originally set to effectively shut down the London Underground, the action was called off over the weekend after a last minute pay deal, in which Transport for London said it had made “significant concessions”.
ATOM BANK has notched its first full year of operating profit after jacking up its savings rates and nearly doubling its customer base over the past year.
In its full year accounts announced yesterday, the fintech reported a £4m operating profit for the year –up from a loss of £2m 12 months ago – as its customer base nearly doubled to 224,000.
The update marks the first full year of profitability for the bank co-founded by former HSBC and First Direct executive Mark Mullen and Metro Bank founder Anthony Thomson after nine years.
In a statement, Mullen said it had been an “important” year for the firm: “We’ve grown strongly, kept our costs tight and delivered our first annual operating profit,” he said.
“We’ve also passed on more than 70 per cent of the Bank of England’s base rate increases to our savers but only 70 per cent of them to our Standard Variable Rate mortgage borrowers.”
Banks have been in the firing
LAURA MCGUIRE
line this year for ramping up borrowing costs and inflicting pain on mortgage holders while failing to pass on the same hikes to savers, but Atom has been near the front of the pack in passing on rates.
Savings deposits at the firm reached £6.6bn over the past 12 months, more than double the previous year, as customers looked to cash in.
Atom’s net interest margin meanwhile stayed broadly flat on the previous year at 2.84 per cent.
The profitability may add to anticipation over the firm’s float on the public markets after a series of delays.
The float of Atom, which was linked with a New York listing last year, has been a topic of speculation as policymakers look to convince more homegrown tech firms to come to market.
Mullen publicly backed London as the firm’s home for an IPO for the first time in an interview earlier this year. However, the bank’s biggest shareholders Toscafund and Spanish bank BBVA will hold significant sway over the eventual destination.
MATALAN yesterday reported a challenging first quarter as poor summer weather impacted sales against the backdrop of cost of living pressures and a shift away from online shopping. The clothing retailer said revenues in the 13 weeks to 27 May declined eight per cent to £263m.
LAURA MCGUIRE
INLAND HOMES has revealed its new chief executive plus plans for a £4m acquisition of North Country Homes.
The London-listed real estate development firm has appointed Jolyon Harrison as head of the company. This is the company’s third CEO in a less than a year, with former chief Stephen Wicks stepping down last September following the issuing of a £37m pre-tax profit loss warning.
Inland then appointed former Galliard
boss Don O’Sullivan, who quit a month into the role after he and the group reached a “mutual agreement”.
Upcoming boss Harrison has been in the industry for over 50 years and served as chief of construction group MJ Gleeson between 2014 and June 2019.
It comes as the group also waves goodbye to its chief financial officer and acting CEO Nishith Malde.
The news came as Inland also revealed plans to acquire accessible housing firm North Country for a consideration of £4m.
However, the firm reported more positive signs in June, with revenues up on last year and ebitda of £33.6m, up from £18.8m last year.
Matalan said it expects an ebitda guidance range of £60m-£65m for the full year, up from £30.6m last year.
The retailer reported a number of challenges during the quarter, including a decline in online sales after it shifted to an ecommerce
platform run by online retailer THG. Customers also showed signs of favouring physical stores over online. “From an online perspective there has been a market trend that has shifted demand back towards stores,” Matalab boss Jo Whitfield said. The results come after the firm was rescued by a debt-for-equity swap with its lenders in January after it accrued £500m in debt.
SINCE the dawn of time, clothing has been an important part of our human experience. We lost our fur at least 1.2m years ago according to reports by scientists. What we wear is now a key part of the identity we convey. The issue today is the sheer quantity of clothes we produce and throw away.
How many of you look at your closet full of clothes and feel like you have nothing to wear?
Adverts are all trying, desperately, to quench our insatiable thirst and desire ‘to dress to impress’. Collection launches are no longer seasonal. Many low-cost clothing stores offer new designs every week. Reports by the Ellen MacArthur Foundation show that, in 2000, the industry made 50bn new garments; nearly 20 years later, that figure has doubled. This is even more alarming as the fashion industry is responsible for 10 per cent of global
carbon emissions, more than all international flights and maritime shipping combined!
When it comes to the water footprint, further reports show it takes roughly 3,800 litres of water to make your favourite pair of jeans.
Now, it gets worse. According to the United Nations Environment Programme, of the total fibre input used for clothing, 87 per cent is incinerated or disposed of. Every year, we drop half a million tonnes of plastic microfibers into the ocean –the equivalent of 50bn tonnes of plastic bottles. Can sustainable fashion reach net zero and defeat the irresistible forces of ‘fashion economics’? And could the future of fashion be a world where we wear the same super durable clothing, like Marvel’s superheroes? It’s a topic we dig into a recent 2050 Investors podcast, Fashionomics: The Good, The Bad and The Ugly.
In 2020/2021, governments in the US and Europe launched a “fiscal whatever it takes” response to the war against Covid-19 by supporting their respective economies, put in hibernation to save human lives and livelihoods. In 2022, further spending targeted at lower income households was made to address the cost of living crisis in the aftermath of an unprecedented increase in energy prices caused by Russia’s war against Ukraine.
The combination of negative supply shocks, supply chain disruptions with China’s zero Covid policies, substantial cumulative excess savings in the US and Europe reaching record levels (8-10 per cent of GDP) and greedflation (higher profit margins led by strong pricing power by corporates) have all
contributed to excess demand vs constrained supply, thus causing higher headlines and core inflation. China’s reopening has failed to trigger an economic rebound similar in magnitude to what was observed in the West despite household excess deposits reaching close to eight per cent of GDP.
CITY OF LONDON CORPORATION HIGHWAYS ACT 1980, SECTION 256
PROPOSED AGREEMENT WITH OWNERS OF LAND FOR THE ADJUSTMENT OF THE BOUNDARIES OF THE HIGHWAY ON ELDON STREET AND FINSBURY AVENUE LONDON EC2M 2QS ADJACENT TO 1 BROADGATE
NOTICE is given that in accordance with the provisions of Section 256 of the Highways Act 1980 the City of London Corporation (“the City”) as highway authority for the highways known as Eldon Street (part) and Finsbury Avenue (part) in the City of London (“the highway”) proposes with Bluebutton (12702) Limited, B.L.C.T. (PHC 2) Limited (“the Owners”) as the owners of the land adjoining and lying near to the highway to enter into an agreement to adjust the boundary of the highway. particulars of the proposed agreement are as follows:
shown hatched purple on the plan numbered 15156 (SK) 2512 (“the Plan”) which at present forms part of Eldon Street, and situated adjacent to 1 Broadgate, shall be dedicated as public highway by the Plan which at present forms part of Eldon Street, and situated adjacent to 1 Broadgate, shall be dedicated as public highway by the owners and shall be transferred to the City of London by owners.
costs of entering into the agreement.
4. Any apparatus of statutory undertakers under, in, over, along or across any area of land which ceases to be highway pursuant to the agreement shall have the same rights as respects their apparatus after that area of highway ceases to be highway as they had immediately beforehand
an estate right interest in or charge on the land to be conveyed by the Council to the Owners may claim compensation under the Highways Act 1980 Section 256(5).
A plan of the proposed adjustment of boundaries of the highway showing the land to be conveyed as hatched and cross hatched on the plan and a full Schedule of the owners and the relevant titles will be
Central banks’ response to fight the ‘inflation outbreak’ has been sharp and aggressive. Headline inflation has now normalised in 2023. However, core inflation remains a concern as wage growth continues to be sticky in the US and in Europe as unemployment rates remain at record lows because of a tight labour market and corporates having developed a ‘natural immunity against higher rates’ because of healthier balance sheet and resilient profit margins.
Imagine your taste buds could hear. Eating your favourite meal would have the same sensory stimulation as listening to classical music. A Filet Mignon with a nice glass of red wine would be like listening to Eine Kleine Nachtmusik by Mozart. However, the food industry also has a significant and ‘fat’ carbon footprint (27 per cent of global emissions), generates a lot of waste, chemical pollution with significant adverse impact on biodiversity. The current food system is unfortunately not sustainable. How do we feed a world population that is expected to reach 10bn by 2050? That’s the crux of our latest 2050 Investors podcast, Carbon-Free Calories.
Zach
SAM TORRANCE ON THE OPEN AT ROYAL LIVERPOOL AND THIS AUTUMN’S RYDER CUP CONTEST PAGE 19
Johnson was one of the first to congratulate Brian Harman on his
Where interesting people say interesting things. Today it’s Kokou Agbo-Bloua, global head of economics, cross-asset & quant research and UK head of research at Societe Generale
BANK Of ENGLAND governor
Andrew Bailey would not have been the only person in the City last week breathing a sigh of relief after the better-than-expected inflation numbers.
It was the first time the Office for National Statistics’s (ONS) calculations have undershot analysts’ forecasts since January’s numbers. It was also the first time the Bank has nailed its own projections in ages.
Its economists correctly guessed inflation would fall to 7.9 per cent in June. The City thought it would fall to 8.2 per cent from 8.7 per cent in May.
Just six of the last 18 inflation prints have come in lower than market expectations, according to calculations by investment bank Nomura.
What a nice way to sign off for the summer holidays.
Lifting the bonnet on the data extracts yet more good news. Core inflation slipped to 6.9 per cent, below an expected fall to 7.1 per cent.
Declines in global commodity prices are finally feeding through to prices, most notably in food cost growth slipping, although the rate is still very high at over 17 per cent.
Petrol prices also yanked headline inflation lower, signalling supermarkets and other forecourt operators are finally handing over savings to customers (perhaps due to intense government pressure).
Businesses are now playing a greater role in taming inflation, which could weaken the pressure on the Bank to lean on demand with sharp rate rises. About time. But don’t read too much into one set of data. To conclude that the cost of living crisis has turned a corner, there needs to be yet further good news.
One reason UK inflation has hugged closer to eight and nine per cent while European and US rates have stepped lower is due to the state energy regulator Ofgem only changing its price cap every three months.
July’s inflation calculation will incorporate the lower £2,074, helping to pull inflation possibly below seven per cent.
More timelier economic indicators have pointed toward deflationary pressures gathering momentum.
Research firm Kantar’s latest estimate of grocery price growth fell to around 14 per cent in July, while recent purchasing managers’ indexes show input costs are rising at the slowest pace in over two years.
Under-reported last week was the ONS estimating the cost of components used by factories to make products falling 2.7 per cent over the year to June.
All this points to a downsized recession risk in the UK, a judgement that has oscillated seemingly with every new set of economic data from the ONS.
The looming hit to mortgagors that will play out from the second half of this year and last until at least 2025 could be blunted
Beijing is very clearly worried about the health of the Chinese economy. In the readout from its latest Politburo meeting, the word risk was mentioned seven times, up from three times in April, as Julian Evans-Pritchard, head of China economics at Capital Economics, noted. Domestic consumption is fraying. The property sector is teetering. Record high youth unemployment is a worry. All this is translating into underperforming growth in the world’s second largest economy. GDP expanded 6.3 per cent in the second quarter yearly, but growth was much slower at 0.8 per cent when compared to Q1.
by markets buttering the Bank of England up for fewer interest rate rises.
Peak rate expectations have fallen to 5.75 per cent from 6.25 per cent. Moneyfacts data shows banks have already responded
to that climbdown by lowering rates on two-year and five-year deals.
That should smooth what has already been a shallower-than-projected knock to incomes. According to the Resolution Foundation, living standards fell just 1.8 per cent over the last year compared to the Office for Budget Responsibility’s 3.8 per cent projection, a difference of £28bn. Though consumer spending will invariably drop, the slide may be flatter, arresting higher unemployment and lower economic growth.
However, another sizable dent to inflation is required to justify the conviction that it has finally been defeated. As Nomura pointed out, monthly services prices are still rising faster than their long-term average. Wages are also accelerating quickly at 7.7 per cent in the private sector.
It would be stupid for Bailey and the rest of the Monetary Policy Committee to leverage one set of numbers to determine their next rate decision.
Instead, they will focus on the data as a whole. Though less likely, don’t be surprised if they opt to repeat a larger 0.5 percentage point rate increase on 3 August.
Just as people cautioned one piece of hotter-than-feared inflation data shouldn’t spark doom and gloom, one piece of good data needs to be welcomed with caution.
CHRIS DORRELL
ONE OF Italy’s largest investment banks Mediobanca has committed €12m (£10.4m) to a joint venture with early-stage investor Founders Factory to help scale fintech startups. The joint venture will build and invest in 35 fintech businesses over the next five years.
Mediobanca’s investment will help underpin a new fintech venture studio accelerator, enabling innovation in financial services by supporting international fintech startups. Its focus will be on ventures that use advanced technologies, such as blockchain and AI, to innovate in the financial services market.
Under plans announced earlier this
year, Mediobanca is attempting to establish itself in the tech space more broadly, in particular by adopting artificial intelligence.
The new investment follows a series of moves in London by Mediobanca. In May, it acquired London-based Arma Partners, Europe’s top adviser to software buyouts, for an undisclosed sum.
City A.M.’s economics editor Jack Barnett takes a deep dive into the state of the economy in his weekly column
Oppenheimer,” Richards added, “it’s just a
However, the elation may be short-lived, as mounting Hollywood strikes threaten
actors unite with crew members and writers in their strikes, potentially disrupting production schedules.
“They’re unlikely to be impacted in the immediate future but even small changes to almost-ready projects will be impossible in the current climate and that could quickly start to eat into the cinematic schedule,” she said. Barbenheimer’s success has not only benefited Vue but also led to a 10 per cent
ANNOUNCEMENTS
LEGAL AND PUBLIC NOTICES
the undermentioned streets made several Orders on 20 July 2023 under Section 14(1) of the Road Lombard Street made on 5 July 2023 under Section 14(2) of the above act. The effect of these Charterhouse Street Building Site
COL Scheme Works
Lombard Street
Moorgate Utility Works
surge in Cineworld shares, despite its delisting plans, and a nearly two per cent increase in upmarket cinema chain Everyman’s shares.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, recognised the potential for a cinematic renaissance but warned “the main focus now will be on the pipeline of future hits, with big hitters becoming fewer and further between.”
JESS JONES25 July 2023
UK businesses on average fork out £3.4m to deal with data breaches, according to IBM Security’s latest annual report
JESS JONES
UK ORGANISATIONS face an average cost of £3.4m for data breach incidents but AI could reduce these costs by £1.6m on average, a report by IBM Security has revealed.
IBM’s annual report showed a decrease in the total average cost of a data breach in the UK from £3.8m in 2022 to £3.4m this year, although this remains a nine per cent increase
on 2020.
Financial services and technology businesses were among the industries most impacted by data breaches in the UK, causing average losses of £5.3m and £4.9m respectively.
However, UK businesses which utilised AI and automation reduced their breach costs by an average of £1.6m and contained the breach more rapidly, shortening the average
‘breach lifecycle’ by 108 days, according to the report.
Martin Borrett, technical director of IBM Security UK & Ireland, said “the slight decline from last year in the overall cost of a data breach in the UK suggests the powerful impact security AI and automation may already be having on early adopters”.
The report found over a third (37 per cent) of firms surveyed had yet to embrace such technologies.
To appear in Best of the Brokers, email your research to notes@cityam.com
LONDON’sFTSE 100 retraced early losses yesterday to close in the black, driven higher by Ocado surging after it settled a dispute over its warehouse technology.
The capital’s premier index climbed 0.19 per cent to 7,678.60 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, fell 0.29 per cent to 19,144.98 points.
Gains on the City’s top index were initially hobbled by the UK’s largest listed lenders taking a tumble due to investors fretting over whether a bumper profit round in their upcoming earnings could spark a political backlash.
Barclays, HSBC and Lloyds were hovering around the lower end of the FTSE 100 during opening exchanges, before regaining ground.
Ocado shot up to the top of the FTSE 100, climbing over 14 per cent after it announced yesterday it had settled its three-year spat with Autostore over warehouse technology ownership.
The online supermarket’s share price, which had been battered after the pandemic due to Brits heading back to physical supermarkets, is now up over 20 per cent so far this year.
Its gains were supported by telecoms giant Vodafone advancing just over four per cent after it said income climbed around six per cent in its UK business in the latest quarter.
Traders are eyeing a busy week of corporate and economic announcements, spearheaded by the US Federal Reserve’s expected final interest rate rise on Wednesday. The central bank is tipped to lift borrowing costs 25 basis points to a range of 5.25 per cent and 5.5 per cent.
Cruise line Carnival was rated an ‘add’ by analysts at Peel Hunt, after its first quarter results showed occupancy “100 per cent or higher”. The Florida-based firm also said 2023 pricing was around six per cent higher than 2019 levels. “Carnival’s share price, which was 700p in May, has rallied on upgrades. There is upgrade potential but the level of debt challenges further progress,” analysts said.
Analysts at Peel Hunt rated Moneysupermarket.com an ‘add’ after it reported revenues of £213.8m, up 11 per cent year on year. The company raised its profit outlook for the year as the group was boosted by its insurance arm. “This is a strong set of results. On our initial estimates, we expect a two per cent upgrade on ebitda,” analysts said.
GOLDILOCKS FEELS “Getting that porridge just right by raising rates enough to cool inflation without starving the economy of the fuel it needs to keep firing is tough [especially] with rates taking time for their effects to be truly felt by the economies in question.”
DANNI HEWSON MARKETS ANALYST AJ BELL
Powerful real-time thought leadership, insights and news delivery mechanism fuelling the most up-to date reporting, adding critical context for decisions that require consciousness, education and thought leadership.
JOIN THE CONVERSATION AND BECOME A PART OF ONE OF LONDON’S MOST TRUSTED NEWS SOURCES
Elena Siniscalco
IT IS hard to think of an asset class that brings a predictable, reliable income while being unaffected by macroeconomic conditions. It’s not oil, and it’s not gold, but it could be a Rolling Stones song.
Music has become the new money jar for fund managers. The idea of execs in suits strategising over whether to bet money on Shakira’s songs might be a little unsettling, but music and money have always rubbed shoulders. Now, in the era of streaming, investing in music isn’t simply the purview of record labels.
There are not many players in this game, and they’re broadly divided into music rights buyers and music marketplaces. The buyers acquire the rights to the most loved hits of all time; the marketplaces allow investors to “bet on songs”.
Hipgnosis, Merck Mercuriadis’ brainchild, was the first to open the game in 2018. Mercuriadis, the former manager of artists like Elton John and Beyonce, wanted to shake up the way intellectual property is managed. He imagined an alternative universe in which major labels don’t control the cash flow from the biggest hits, a universe in which songwriters, and not only pop stars, make a lot of money. And obviously, he wanted to make
some money himself. He says convincing artists to sell their rights was never difficult - he was already a well-trusted insider in the industry. Songs are “metaphorical children” for artists, so these transactions are always “highly emotional”. But artists “want the songs to be in the hands of someone like me”, he proclaims without a bit of doubt. What Hipgnosis does, in simple terms, is raise money from investors and spend it on the intellectual property rights of chart toppers. It owns nearly 25 per cent of all songs played over a billion times on Spotify, and 16 out of the top 40 UK best-selling al-
bums of the first six months of this year. The company de-risks by only purchasing songs that are likely to have a long lifespan, and to be played over and over again. It portrays itself as a better alternative to normal publishers and record labels because it “cares about the songwriting community”, in Mercuriadis’ words.
Realistically, it will start making even more money once Spotify fully penetrates markets like China and India.
“This will have a big value for our investment,” the manager-turned-CEO says with a smile.
Mercuriadis is far from alone in seeing music as more than an abstract
craft. Or perhaps, it is precisely this emotional quality that makes music worth the money: the more a song means to people, the higher its value. People want to invest in it, whether they’re fans, family offices or retail investors.
It’s for them that music marketplaces like ANote started springing up. A former fund manager, co-founder Marzio Schena said he had the business idea while watching San Remo, an iconic Italian music festival. In the way only a fund manager could, he started “looking at music from a business perspective, as a long asset class” while following the festival on the telly. He had
IMAGINE a Nimby, the villain of the anti-housing brigade. Who do you see? If you’re like me, they’re old, white, rural and affluent. They bemoan overcrowded public services and the loss of green spaces. They are the people Michael Gove targeted yesterday in his housing speech when he announced plans to build more in Cambridge.
But Nimbys can be urban creatures too, and they look a little different. Last week, the development of the Hondo Tower in Brixton was thwarted after the developer withdrew their application after campaigners argued that the tower would gentrify the area, failing to protect the needs of the disadvantaged, multiethnic community against yuppie sprawl.
Although the concerns of urban Nimbys are more endearing than their landed counterparts, they too must be rejected. Soaring London house prices means it’s unrealistic to expect wellconnected, central locations like Brixton not to cater to more monied residents over time. Every effort must
Ben Cope
be made to support those who are displaced, but “gentrifying” development projects should go ahead.
The urban playbook takes inspiration from its countryside cousins. Originally submitting a planning application in 2019, the Hondo Tower was beset with delays. Two public consultations, four separate planning proposals, and nearly 4,000 pages of documents later, and the tower was no closer to being built. Trapped in a Sisyphean nightmare, the developer gave up.
The campaigners’ motivations, however, were intriguing. Dubbed “The Battle for Brixton”, locals claimed the development – consisting of upmarket
shops and offices – would “exacerbate gentrification, displacing local market traders for office workers and expensive shops.” The argument went that a sea of Prets and All Bar Ones would force veteran local businesses to shut up shop, while driving up rents in the multiethnic area.
Although these fears may have been grounded, opposing the Hondo Tower and developments like it was the wrong call. The land value in Brixton has exploded in recent years owing to its Zone 2 location and well-connected tube station. The average house price in the wider borough of Lambeth is approaching £550,000, up nearly 50 per cent in 10 years. As campaigners noted, these rises have steadily driven the traditional community of Windrush-descendants out of the area as they’re replaced by young professionals. Opposing the Hondo Tower will do nothing to reverse these underlying trends, but it will deny Brixton’s new residents the opportunity to remake the area as they wish, just like the generation before them did.
the crazy idea of creating a marketplace that connected investors and music rights owners.
Today, ANote comprises more than 25,000 investors who see an average annualised return of 10.76 per cent. It has its own catalogues; investors can chip in and buy shares. Then every time a song is played, they make a bit of money. So effectively artists sell to ANote their stream of royalties for “any value between £100k and £1.6m”, says Schena.
Again, it all goes back to streaming. Schena says this market is so recent because only streaming made it possible. No one was interested in investing in the music industry when it was close to impossible to properly calculate streams of royalties, given we were all listening to music illegally and downloading songs through Limewire. Now thanks to Spotify, every time someone presses play someone else makes a bit of money. “The moment there is more money in the industry, it flows to everyone”, says Schena. One can only hope he’s right.
There is movement in the creative industry, and dissatisfaction with power dynamics, as the Hollywood actors and writers’ strikes show. Mercuriadis says this hasn’t happened in the music industry yet only because of “the control that major labels have over major publishers”. How much benefit artists - especially songwriters - gain from selling to something like Hipgnosis or ANote, is a bit early to tell. What’s sure is that this market of trading on lyrics has yet to boom fully; once it does, your favourite Justin Timberlake song might be a better investment than property.
Gentrification has a bad name. The guilty secret of the upwardly mobile hoping for reduced crime and appreciating assets, it’s characterised as a process where poorer, urban communities are torn apart for the benefit of the rich. Even if it’s inevitable, that doesn’t stop it hurting. In the 1980s and 90s, the London Docklands Development Corporation transformed East London into what is now a global financial hub. But this opulence did little to console the former inhabitants of dockland slums who were forcibly moved into soulless tower blocks, many of whom would have happily forsaken material comforts for their old communities.
People who mock those resistant to prosperity would do better to channel their energies into supporting communities through this change. Maybe then they would support the growth and development this city so badly needs.
£ Ben Cope is a political commentator with Young Voices
KNOWN AS YEEZY Trainer fans have jumped on the chance to buy the last stocks of Adidas’ Yeezy sneakers, putting in orders for more than 4 million pairs of shoes. It comes after the sportswear brand cut ties with Kanye West - now called Yeafter a string of antisemitic comments.
[Re: New sustainability reporting standards are a game changer for businesses, July 20]
The International Sustainability Standards Board’s (ISSB) inaugural standards are much needed, refreshing take on sustainability reporting, and should have a unifying global effect. Up until now, having a host of different ESG reporting measurements has been a challenge that has cost businesses time and money. A company looking to report its carbon emissions and ESG impact to stakeholders was met by a word-soup full of acronyms. Businesses operating in different jurisdictions had
to create different reports, based on local requirements. The new standards will simplify this process significantly. This new reporting standard will also help organisations to cooperate and help each other measure their impact, and improve one another’s Scope 3 emissions, which are notoriously the hardest to measure.
As a company, we share our Scope 2 emissions, which measure indirect energy emissions, with our customers to calculate their Scope 3 emissions –and they do the same in return.
The new standards will ease this interaction by unifying standards regardless of where a company is based – help much-needed in ESG reporting.
Julie Kae Qlik
LAST week, it emerged that Thames Water’s biggest investor had cut the value of its stake in the debt-riddled firm by almost 30 per cent. So maybe the Canadian pension fund was surprised to read advice aired in The Times recently that investing in water companies could be a smart move, even if they are unpopular right now. Given their historic singleminded dedication to their shareholders, who could argue. Except of course for the fact that the consequent rinsing of the general public from their monopoly positions has left a rather unpleasant taste in the mouth. The unpleasant taste is particularly strong if you happen to spend any time in the nation’s rivers.
The state of the UK’s water industry is a sorry tale indeed. Monopoly positions and feeble regulation have been ruthlessly exploited. However, it is important to remember these things are not done by faceless corporations, but by people. Real people, who I’m sure see themselves as trying to do the right thing.
Michael Gove’s big pitch to build more houses in Cambridge was met with a lukewarm reception from its local MP, who claimed there was not enough water in the city for any more new homes.
If you’re a Cambridge resident, you should probably be alarmed by that whether you want more homes or not. Anthony Browne, the Tory MP for South Cambridgeshire, said the Environment Agency had ‘blocked all major new
development... because there is no water for them.’ Last month, the quango objected to plans for almost 5,000 new homes over ‘significant’ risk for water demand.
Gove, the Housing Sec, yesterday announced £5m worth of funding to the ‘Cambridge Delivery Group’ which aims to build more homes in the area to prevent scientists fleeing to rival research hubs in the US. He insisted the plans were in the ‘national interest’.
If real people caused the problems, real people can fix them. The reason our water industry is in a terrible state is because their chief executives were very heavily incentivised to return as much money as possible to their shareholders. And asleep at the wheel regulators allowed them to achieve this by pumping sewage into rivers and imposing hosepipe bans rather than damage their profits by improving infrastructure, supply and service. That’s monopolies for ya.
The companies’ bosses are paid eyewatering bonuses to do so. The only way the problem is fixed is if this is changed. City types can moan that isn’t how it works. Except – it is. Incentives work. Chief executives follow the money. If they get a lot less money when they dump sewage into rivers, it absolutely guarantees it would happen far less frequently. This could and should happen right now. Indeed, the large-scale environmental harm they are causing will only stop when this happens. If there is no personal incentive to change, no change will be made. That’s real people for ya. Much has already been written about all the complicated challenges the industry now faces, that it will take time
and investment and all the other stuff. At least some of which is true, but some is an excuse. A literal shitshow has been allowed to run unchecked for which we should blame the government and regulators, not the shareholders. The rules, if necessarily the law, must change. Shareholders and senior executives need to comply and in order to avoid corporate or even individual penalties they would incentivise their CEOs accordingly; incentivise them to maximise their returns without breaking the law. None of them will like it. But that’s not our concern. Water supply and clean rivers is our concern. The first is what the companies’ CEOs are paid handsomely to deliver and the second is what they must now protect while doing so.
This is without doubt a more difficult task than the money printing exercise they have been responsible for thus far. But it’s not that difficult. The answer, as always, is if the current incumbents can’t do it, get somebody
who can. Somebody who has the will to fix the mess their predecessors were allowed to create. A rule of thumb which must also now apply to the previously somnolent regulators. And the way to make sure it happens is to make unambiguously clear that the CEO’s incentives link directly to clean rivers and a healthy supply in the nation's taps. Until this happens – nothing will change.
Of course they must also deliver a return to their shareholders. The reason being a leader is difficult is you have to deliver results with constrained resources - usually time and/or money. CEOs who achieve that deserve the big bucks (in any industry) because it’s difficult to do. CEOs who find themselves in a position where all they need to do is turn the taps on and outflows money aren’t worthy of the name. Or the cheques.
£ Chris Hirst is a chief executive officer and author
LOTUSused to bolt together fragile cars using fibreglass, British Leyland leftovers and a slightly blinkered sense of optimism.
Back then, using the words ‘Lotus’ and ‘electric’ in the same sentence would have inevitably meant Lots Of Trouble, Usually Serious. The new Eletre represents a different kind of trouble: a clear and present danger to Porsche –perhaps even Lamborghini, too.
In truth, everything about the Eletre is different. It’s a tech-laden SUV instead of a skeletal sports car. Fully electric, rather than powered by petrol. And made in Wuhan, not in sleepy Norfolk. Lotus took 70 years to build its first 100,000 cars; now, buoyed by Chinese investment from Geely, it aims to shift that number annually by 2028. The Eletre is central to this goal.
The range kicks off with the standard Eletre at £89,500. It uses a 112 kWh bat-
tery and twin electric motors for allwheel drive, serving up 603hp, 0-62 mph in 4.5 seconds and 373 miles of range.
The Eletre S (£104,500) offers the same performance with more luxury, including soft-close doors, and a ground-quaking 23-speaker KEF audio system.
Then there is the flagship Eletre R (£120,000). This adds a two-speed transmission and larger motors for a faintly absurd 905hp, 0-62mph in a supercarslaying 2.95 seconds and a range of 304 miles. It also has an arsenal of active chassis technology, including rearwheel steering, anti-roll control and a dedicated Track driving mode.
Lotus has lined up an ‘R’, an empty airfield and a circuit of sacrificial traffic cones for us later. First, it’s time for a road drive in the middling Eletre S. With ‘porous’ design inspired by the Evija hypercar, it certainly has plenty of presence – especially in radi-
LOTUS ELETRE R
PRICE: £120,000
POWER: 905HP
0-62MPH: 3.0SEC
TOP SPEED: 165MPH
BATTERY SIZE: 112KWH
ELECTRIC RANGE: 304MILES
ant Solar Yellow. An aerodynamic SUV is a contradiction in terms, of course, but the Eletre’s drag coefficient of 0.26 is slippery for a car of this type.
Inside, you’ll find 5G connectivity and the new Lotus Hyper OS media system. There are up to seven touchscreens, including the main 15.1-inch OLED interface and a Ferrari-style passenger display. The tech looks sharp and feels intuitive, including a dedicated smartphone app and a navigation system that
predicts energy use, preconditioning the battery before you arrive at a charger.
As you’d hope for an SUV with a similar footprint to a Mercedes-Benz S-Class, space for passengers and their luggage is plentiful. The optional gold-effect trim looks decidedly more Nanjing than Norwich, but most surfaces are swathed in tactile Alcantara and quality edges close to Porsche standards.
On the road, the Eletre’s air suspension combines a comfortable ride with reassuring poise and huge reserves of grip. The much-vaunted ‘Lotus DNA’ feels somewhat smothered beneath 2.5 tonnes of SUV, and you can sense the electronics doing some literal heavy lifting. We found the default Tour driving mode offers the best sense of feedback and flow; switching to Sport makes the car feel abrupt and over-caffeinated.
Even the standard Eletre is hardly slow, but the ‘R’ can embarrass a Lamborghini
Urus Performante (and costs almost half the price). A full-bore start leaves your stomach behind like the drop on the roller coaster. As we drive across to the circuit, the sky darkens and stair-rods of rain begin lashing the runway. Yet the adverse conditions only serve to reinforce the Eletre’s inherent balance and tenacious traction, and allow some Lotus magic to shine through.
This is an easy vehicle to admire, but a harder one to love, at least for this old-fashioned Lotus diehard. Yet it's also exactly what the company needs, to survive in this brave new electrified world and generate the profits to continue building brilliant sports cars. An electric saloon and a smaller SUV will soon follow, but the Eletre seems a promising start. And a reason for genuine optimism.
Tim Pitt writes for motoringresearch.com
PREFERa more traditional kind of Lotus? Orders are now open for the four-cylinder version of the Emira coupe. Following the launch of the 400hp supercharged 3.5-litre V6 version, the new 2.0-litre turbocharged model expands the Emira range.
Supplied by Mercedes-AMG, the mid-mounted engine is closely related to that in the AMG A45 hot hatchback. A 365hp output makes this the most powerful four-cylinder Lotus sports car ever made. It's also the end of a long bloodline of fourcylinder Lotus models, including the Elise, Exige and Esprit, as the British brand prepares to go fully electric.
Helped by a twin-scroll turbocharger,
the Lotus Emira’s engine generates a substantial 317lb ft of torque. An eightspeed dual-clutch transmission is fitted as standard (there's no manual option), with steering wheel-mounted paddles for rapid shifts. Thanks to a relatively low kerb weight of 1,446kg, the Emira will sprint to 62mph in just 4.4 seconds: a mere 0.1 seconds behind the V6. Top speed is 180mph.
As you'd expect, Lotus has also tuned the handling of the Emira to suit its new engine. An aluminium rear subframe saves 12kg compared to the V6 model, plus there is a choice of Tour or Sport chassis settings. The car rides on bespoke tyres, and features a specially
calibrated stability control system.
A fully-loaded First Edition model marks the start of four-cylinder Emira production, and is offered in a choice of 13 paint colours. The standard power-adjustable and heated sports seats can be upholstered in a leather or Alcantara (artificial suede) trim.
Along with a 10.25-inch multimedia touchscreen, it also features a 12.3inch digital instrument panel and a 10-speaker 560W audio system.
Orders for the Lotus Emira First Edition can be placed now, with prices starting from £81,495 – a modest £4,500 less than the V6. A cheaper standard version should join the range in 2024.
The Eletre is an entirely new kind of Lotus: a radical electric SUV that majors on performance and in-car technology. Tim Pitt drives it.
THE FINAL day of the Open Championship should be broadcast live on free-to-air channels to attract more people to the sport, says the chair of the All Party Parliamentary Group (APPG) for golf.
Craig Tracey MP says the sport could soon be prescribed by doctors to help patients get healthy, and that bringing live coverage of the Open, won by Brian Harman at Royal Liverpool on Sunday, out from behind a subscription paywall would help.
The UK’s list of “crown jewel” sporting events is compiled by the Independent Television Commission and stipulates which sporting events must remain available to all, such as the men’s and women’s World Cups, Wimbledon, the Grand National and the Olympics.
The Open – alongside the Ryder Cup – is currently a Category B event, meaning it can be shown on pay television so long as extensive highlights are available on free-to-air TV.
“I don’t want to speak for the R&A in terms of their revenue streams,”
Tracey, whose constituency of North Warwickshire houses the world famous Belfry course, told City A.M.
“But there are significant revenue streams [for the Open] that are outside of the United Kingdom for tournaments like that. So it would be quite
nice if even the final day was free-to-air for people to see.”
Sunday’s Open crescendo saw 54-hole leader Harman win by six shots at Hoylake, with Jon Rahm tied for second and Rory McIlroy in a share of sixth.
But the chair of the APPG for golf –one of hundreds of groups aimed at promoting the interests of a particular cause – also insisted that this isn’t just about watching the sport, it’s about catapulting it into the mainstream.
“The government is working on their Sport and Futures Programme at the moment,” Tracey added. “You’ll probably see social prescribing feature quite heavily in
that [where GPs give patients gym memberships, and other leisure prescriptions rather than NHS operations and procedures] because the Sports Minister [Stuart Andrew] is also the Loneliness Minister.
“It is about stopping what they class as over-medication. The default thing now is that you get a tablet if you have an issue, but if you’re living on your own, how do you connect?
“It’s rare that you play golf on your own. You start to become part of a community as much as being prescribed something good. What can you do throughout your life?
“Golf is one of those.”
MATT HARDY
THIS summer’s bumper series of Rugby World Cup warm-up games will include new measures for officials that should see the amount of rugby played increase.
Refereeing teams will be able to use a “bunker” system –whereby a player can be sent off with a yellow card which is then reviewed and potentially upgraded to a red without using up playing time –and shot clocks –to ensure kicks are taken in a timely manner –as part of the new changes.
It is hoped the bunker system will stop a repeat of Freddie Steward’s
FRANK DALLERES
SAUDI Pro League side Al-Hilal have kicked off a transfer scramble for Kylian Mbappe by tabling a package worth €1bn (£865m) for the France and Paris Saint-Germain striker.
PSG accepted Al-Hilal’s offer, which includes a potential world record transfer fee of €300m (£259m) and a contract worth €700m (£605m) a year for Mbappe.
The 24-year-old has been put up for sale by the French champions after he informed the club that he would not be extending his contract, which expires next summer.
Real Madrid and Mbappe are mutual long-term admirers and the
Spanish giants remain his most likely destination – if a deal can be agreed with PSG. The Parisians believe there will be no shortage of clubs with the funds and appetite to bid for Mbappe, although few if any will be able to match Al-Hilal’s offer.
And it remains unclear whether the former Monaco player would be interested in leaving France for anywhere other than Madrid.
A further issue holding up progress is an eight-figure bonus that Mbappe is believed to be due if he remains with PSG at the end of this month.
PSG have left their star player out of their touring party for a preseason trip to Asia, effectively
CRICKET
advertising his availability.
The club are undergoing a summer overhaul which could see all three star forwards Mbappe, Lionel Messi and Neymar depart the Parc des Princes.
Were Mbappe to take up Al-Hilal’s offer, it would smash the world transfer record set when PSG paid €222m (£200m) to buy Neymar out of his contract at Barcelona in 2017. Mbappe himself cost €180m (£163m) when he made his move from Monaco to PSG permanent in 2018 – currently the second most expensive transfer of all time. He has scored 212 goals in 260 games across six seasons in the French capital, during which time he also won the World Cup.
red card against Ireland in the Six Nations, which was later rescinded.
“Bringing the latest technology, processes and rugby focused innovations into Six Nations Rugby competitions is a core part of helping drive the collective growth of the game,” Julie Paterson, director of rugby at Six Nations Rugby said.
“The likes of the bunker trial and Hawk-Eye will offer even more support to match officials and the decisions they make in the heat of a live match environment.”
Body cameras will be used more widely with officials hoping to clamp down on bad behaviour.
MATT HARDY
ENGLAND have named an unchanged team for this week’s fifth Ashes Test as they look to deny Australia their first series win on these shores since 2001.
Rain scuppered England’s hopes of levelling the five-match series at Old Trafford on Sunday, an outcome which ensured that the tourists will retain the famous urn.
But England can maintain their unbeaten in home series against Australia dating back to 2001 should they beat the tourists at the Oval this week. The Test gets underway on Thursday and could continue through until Monday.
Questions were raised over England’s
selection in the fourth Test at Manchester but captain Ben Stokes defended his and coach Brendon McCullum’s calls, as well as the team’s decision not to declare in the hope of forcing a result.
Mark Wood, Josh Tongue, Ollie Robinson, Stuart Broad, and James Anderson remain as specialist bowlers while Stokes, Moeen Ali and Chris Woakes are the three all-rounders.
Jonny Bairstow will keep wicket while the squad contains Harry Brook, Zak Crawley, Ben Duckett, Dan Lawrence and Joe Root as batters.
This is England’s last scheduled men’s Test match until they play the West Indies in July 2024.
MOTORSPORT
WHILE Formula 1’s increasing predictability is testing viewers’ appetite, the same cannot be said of Formula E ahead of this weekend’s finale in London.
On Saturday and Sunday race fans will descend on Docklands for a double header to decide the championship. With a maximum of 58 points available across two races, any one of Brit Jake Dennis, New Zealanders Nick Cassidy and Mitch Evans, and German Pascal Wehrlein can snap up their first title.
Envision Racing, Porsche, Jaguar TCS and Andretti, meanwhile, can wrap up the team championship in the capital. But the London finale, which uniquely features a track that is 50 per cent indoor and 50 per cent outdoor,
divides opinion.
Formula E’s new CEO Jeff Dodds declined to commit to London as a longterm home for the last race of the season, and a number of drivers aren’t exactly ecstatic with the location.
“The circuit itself is unique,” championship leader Jake Dennis told City A.M. “Obviously, with the indoor-outdoor section, it’s very different. The indoor section is great, it really supplies a lot of grip and confidence to the driver, compared to the outside surface.
“It’s very difficult to overtake. It would be nice to go a bit more central.
I live in Fulham so it’s quite a way away from the ExCeL [location of the race]
but it’s a starting point for sure. “I see the limitations of going more central but I think it’s a unique experience.”
Wehrlein, also in contention for the title, agrees. “Inside there’s a lot of grip on the London track, outside there’s a lot less so I would still like to see a race in the rain where it’s wet outside,” he says. “We haven’t had that so far, like a few drops, but not really wet and dry – I think that would be not easy to handle.”
It’s a highly competitive weekend in London and there are a number of manufacturers in the race for a title
too. One of those is Jaguar TCS, who are looking for their first team championship, given the long odds on their leading driver Evans picking up the driver title.
“I look where we are now going to the last weekend of the season with two races to go in London, we’re in with a shout of both the driver and teams championship. It’s fair to say [Mitch Evans] had a great year,”
Jaguar team principal James Barclay told City A.M.
MAKING NOISE
“So right from the start we were competitive and we just built on that to the point where we have been really strong overall, not just us but our customers [who use Jaguar power units] Envision Racing. So to have two Jaguar powered teams in the top three of the championship, that’s the biggest proof point.”
Formula E has notably made more noise this season and while their petrol-guzzling peer continues to see the same driver winning every race, there’s ample opportunity for them to capitalise.
YOU MIGHT not know Brian Harman if you walk past him in the street but, as he showed in winning the Open at the weekend, you’ll certainly know him when you hand in your scorecard.
The low-key American was magnificent in all aspects of his game for the whole week on his way to winning by six shots at Royal Liverpool on Sunday. His driving was out of this world, his iron play was great, and his chipping and putting were fantastic.
Harman won by a distance in the end but he was 10 under par after two rounds and never really looked like losing it from there.
His ability to respond on the rare occasion he made a bogey or hit a wayward shot was absolutely key to staying in front in challenging conditions.
The man from Georgia dropped a couple of shots at the start of his third and fourth rounds but quickly responded on both occasions to make the turn level.
Harman seems like a really nice guy and I loved that he said a spectator who heckled him about not having “the stones” to finish the job only made him more determined.
He was 26th in the world before the Open Championship so the boy can play, even if he is not the most highprofile player on the PGA Tour and hadn’t won a major before.
His putting has always been brilliant. He is not the longest hitter – some guys will hit it 20-30 yards past him –but I’d swap their length for hitting as straight as he does.
This was a pretty severe test and that suited him down to the ground. He didn’t try to do anything fancy and played within himself on the last day.
Despite enjoying a commanding lead all weekend, Harman said he didn’t allow himself to think about lifting the Claret Jug until he had got out of the bunker at 18.
That’s absolutely right – if you get ahead of yourself you’ll be making your champions’ speech at the 10th tee – especially with bunkers like these that can easily cost you three shots.
was sublime but he never quite got going on Sunday and it was a similar story for Rory McIlroy, who couldn’t build on promising starts on both days.
The bunkers caused some debate but I thought that they were magnificent. Bunkers are meant to be hazards; some people forget that.
If you go into a water hazard you have to take a drop. At least with a
The weather can be an important factor at the Open but I’m glad that this year it was fair to everyone.
One of the idiosyncrasies of links golf is that conditions can vary dramatically from morning to afternoon, but at Hoylake it was either wet or windy or fine for the whole day.
The relentless rain on Sunday might have made it harder for the chasing pack to shoot low scores, but it was also easier for Harman to drop shots. Instead he extended his overnight lead, capping a very impressive four days on Merseyside.
Jon Rahm’s round of 63 on Saturday
I felt sorry for Tommy Fleetwood, who had a lot of pressure on his shoulders as the leading local contender. He played so well but couldn’t buy a putt on Sunday and suffering a triple bogey at the 71st hole was a real sickener.
Royal Liverpool member Matthew Jordan had a fantastic week, from hitting the opening shot to finishing tied for 10th and booking his place at next year’s Open.
Austrian Sepp Straka, meanwhile, played really well to join Rahm in a four-man tie for second. Combined with his recent win on the PGA Tour,
that must book his Ryder Cup place. Looking ahead to that contest in Rome, Zach Johnson was one of the first to congratulate Harman on Sunday. He will surely be in Johnson’s US team.
Now that all four men’s majors are done for this year and it is just two months away, a lot of attention will turn to the Ryder Cup and it’s very exciting.
I think the European team is building beautifully but there are seven or eight great players who probably deserve one of the six captain’s picks, so Luke Donald has plenty to think about.
£ Sam Torrance OBE is a former Ryder Cup-winning captain and one of Europe’s most successful golfers. Follow him @torrancesam
Four men and four teams can secure championships, but London track at ExCeL is no easy feat, writes Matt Hardy
Looking ahead to the Ryder Cup, US captain Johnson was the first to congratulate Harman
