Published: 23 February 2023
By Suzanne Evans, Director, Political Insight
Train drivers on London's Underground network and NHS workers across England will take fresh strike action next month, their trade unions said yesterday. The Associated Society of Locomotive Engineers and Firemen (ASLEF) said 99% of tube train drivers who took part in its ballot voted in favour of strike action in a dispute over pensions and working arrangements. They will strike on 15th March, the day the government is due to set out its budget statement, with the union saying its members in other roles on the Underground would also walk out on the same day. Meanwhile, Unison said nurses, ambulance staff, blood collection workers and healthcare assistants were among thousands of NHS workers it represents who will take strike action on 8th March.
New rules to protect retail consumers of financial products, such as insurance or mortgages, will come into force in July on schedule despite some "resistance" from the financial services industry, Financial Conduct Authority (FCA) said yesterday. The Consumer Duty rule seeks to change culture at banks, insurers and investment firms, to draw a line under retail mis-selling scandals going back to the 1980s, from endowment mortgages to pensions and payment protection insurance (PPI), Reuters says. "The deadline of 31st July will not be moved, and we are here to help," Sheldon Mills, FCA executive director for competition and consumers, told a conference, adding: “Nobody will be punished for past actions or omissions so as long as they are put right by July for products still on offer”.
More than six in 10 businesses in the UK are planning on hiking prices as companies struggle with inflation and higher energy bills, City A.M. reports. Business confidence is as low as it was during the Covid pandemic, according to a survey from the British Chamber of Commerce (BCC), with two-thirds (65%) of businesses planning to raise prices due to cost pressures. Around half (47%) of UK firms said they would struggle to pay their energy bill once the current business support package ends. The survey of over 1,000 companies also found that that only one in three (34%) businesses believed their profits will increase over the coming year, and 36% expected a decline. A quarter of firms reported a decrease in sales in the last quarter of 2022, with hospitality firms the least likely to report improvements.
The UK steel industry has raised concerns that more jobs could be cut before any government support for electricity bills kicks in, the BBC reports. Yesterday, the government proposed changes that will mean some 300 firms – employing 400,000 workers – making steel, paper, chemicals and other metals stand to benefit from changes which will see them exempt from certain costs and taxes. The aim of the exemption is to bring the energy costs of the UK's energy-intensive industries in line with those charged in the world's other major economies. However, Gareth Stace, director general of UK Steel, said the fact the proposals set to be consulted on in the spring and are not being implemented straight away was "particularly concerning". He also told the broadcaster that he feared British Steel's decision to axe 260 jobs could be the start of a trend in the sector unless swifter action was taken. Nevertheless, he also said the government’s proposals were "very welcome" and would go a "long way to bridging the gap" between what UK steelmakers pay compared to competitors in Europe. Business and Trade Secretary Kemi Badenoch said the support would mean "UK industries like steel and chemicals remain competitive on the world stage". Steel manufacturers in the UK are currently paying about 60% more for electricity than their counterparts in other countries such as Germany, according to UK Steel, due to added levies and carbon costs.
Rupert Murdoch's News Corp encountered a legal setback yesterday when The Supreme Court ruled that digital editions of The Times, The Sunday Times, The Sun and The Sun on Sunday could not be treated as "newspapers" for tax purposes. Judges dismissed an appeal brought by News Corp, which had argued that its digital publications should have been treated like the print versions which are zero-rated for VAT. It was hoping to recoup more than £35m paid out between 2010 and 2016. A spokesperson for News UK, News Corp's British newspaper publisher, said it was disappointed with the decision. The Government removed the VAT charge on digital publishing altogether in April 2020 in order to boost online readership of newspapers and e-books during the Covid-19 pandemic.
The boss of Royal Mail underwent a bruising encounter with the House of Commons Business Committee yesterday, after admitting the firm was failing its legal duty to deliver letters on Saturdays. CEO Simon Thompson said the firm had fallen short of its universal service obligation (USO) which legally requires Royal Mail to deliver letters to UK households six days a week and parcels five days a week.
Aerospace and defence company Rolls-Royce yesterday posted a rise in operating profit of £837m in 2022, up from £513m a year earlier. Revenue grew to £13.5bn from £11.2bn. On an underlying basis, operating profit was up to £652m from £414m. Rolls-Royce, which gets paid when its engines on aircraft are flying, said large engine flying hours in civil aerospace grew by 35% year on year as recovery in international travel continued. Order intake in Power Systems grew 29% to £4.3bn. "In 2023, we assume large engine flying hours at 80-90% of 2019's level," the company said.
Heathrow meanwhile, has reported a smaller annual loss for 2022. Its adjusted loss before tax narrowed to £684m from the £1.27bn loss it made a year earlier under pandemic travel restrictions. Nevertheless, Britain's largest airport cautioned that underlying profitability was impacted by inflation and lower passenger numbers. The airport, which is owned by Spanish group Ferrovial and Qatar Investment Authority plus other investors, said no dividends were paid in 2022 and none were planned for 2023 as its financing remains conservative.
Virgin Media 02 yesterday outlined plans to deliver 5G services to 50% of the UK population in 2023 and said it would create a new ‘multi-million’ pound London headquarters in Paddington. A lease for the new HQ building at Paddington Central’s 3 Sheldon Square has been agreed with developer, British Land, it said. “The company is not looking to make any reduction in headcount as a result of the Slough office closure which is planned to take place in June,” Virgin Media 02 also said.
Profits at FTSE 100 miner Rio Tinto have slumped by more than a third due to weaker iron ore prices on the back of slowing demand from China, and higher costs. Full-year earnings slumped 38% to $13.3bn (£11bn) as revenue for 2022 fell 13% to $55.5bn. After a record payout last year, Rio shareholders were also told yesterday that their final payout had been cut by more than half to $2.25.
FTSE 100 paper and packaging group Mondi more than doubled full-year profits on higher prices but warned that it continued to see softer demand and pricing, despite input costs declining. Profit before tax rose 119% to €1.56bn (£1.29bn) as revenue excluding Russian operations surged by 28% to €9bn (£7.93bn).
British power generator Drax Group has posted a forecast-beating jump in annual profit of 83% to £731million, buoyed by robust demand for renewable power and a rise in wholesale gas prices. The company, which provides around 7 per cent of Britain's electricity through its network of power stations, has been expected to post profits of £676million to £730million, the Daily Mail reports.
Primary Health Properties saw growth in its full-year rental income and profits. For the year ending on 31 December, the FTSE 250 real estate investment trust specialising in the rental of modern primary healthcare facilities announced a 3.5% increase in rental income to reach £141.5m. In turn, its adjusted earnings rose by 6.6% to £88.7m.
Georgia-focussed TBC Bank Group released a strong set of 2022 financial results on Wednesday, reporting that despite a one-off tax charge of GEL 113m (£35.51m), its net profit rose 24% year-on-year to GEL 1bn, with a return on equity of 27.0%. The FTSE 250 company said that excluding the one-off tax charge, the bank's underlying net profit and ROE would have been GEL 1.12bn and 29.9%, respectively.
West End landlords Capital & Counties and Shaftesbury said yesterday that the Competition and Markets Authority has cleared their £3.5bn merger, and it is now expected to complete on 6th March. The all-share merger will create a combined group with a portfolio valued at around £5bn, comprising approximately 670 predominantly freehold buildings with around 2.9m square feet of lettable space across 2,000 commercial and residential units.
Live betting content provider Sports Information Services (SIS) is reportedly for sale with a £200m price tag. According to Sky News, the sale process is being handled by Oakvale Capital, a specialist in advising sports and gaming businesses. The company's shareholders include Ladbrokes parent Entain Group and the founder of Betfred; William Hill, the UK arm of which is now part of the listed company 888 Holdings; and Caledonia Investments, the publicly-traded long-term investor. The Tote Group also owns a 6% stake in SIS.
Wood Group said last night that it has rejected three unsolicited, preliminary and conditional takeover proposals from Apollo Global Management. The most recent approach, on 26th January, was at 230p per share in cash, amounting to a £1.59bn bid, Sharecast News reports. "The board unanimously rejected each of the proposals, having concluded that they significantly undervalued the repositioned group's prospects," the FTSE 250 global consulting and engineering company said. Shares in the group are up over 30% this morning on the news.
Shares in interiors company Sanderson Design also soared yesterday after it struck a deal with Next to sell products through the high street giant. The luxury home furnishings group signed a five-year licensing agreement to give Next exclusive rights to make products under its Clarke & Clarke brand. Clarke & Clarke is known for bright flowery designs and has a collaboration with TV star Tess Daly on bed linen and cushions, the Daily Mail says.
FTSE 250 media group Future has appointed Jon Steinberg as its new CEO with effect from 3rd April. He succeeds Zillah Byng-Thorne, who announced her intention to stand down last September. Future said Steinberg is an experienced media executive, "with a strong track record of innovation, scaling media groups and creating value". Most recently, he was the president of Altice USA's news & advertising division, and prior to that, he was the CEO of DailyMail.com North America, having joined from BuzzFeed, where he was president & chief operating officer. The multi-platform media company’s portfolio consists approximately 240 brands across technology, games, television (TV) and entertainment, as well as news, food and drink, women’s lifestyle, music, photography, sports, and home interest magazines. The Company also provides digital advertising and publishing services.
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