Published: 24 February 2023
By Suzanne Evans, Director, Political Insight
It was one year today that Russia invaded Ukraine. The Daily Mail reports that just 17 of the world's 122 largest companies have pulled out of Russia since. Unilever, BP and HSBC all still operate there, according to a report by the Moral Rating Agency (MRA). 59 firms have made only ‘partial withdrawals’ – shutting down bits of their businesses in Russia – and 46 ‘hardcore’ companies have refused to downsize at all.
The Government said yesterday that Britons may face shortages of salad staples, including tomatoes, cucumbers and peppers, for up to another month. All major supermarkets have been hit by supply issues stemming from disrupted harvests in southern Europe and North Africa. Therese Coffey, minister for the environment, food and rural affairs, told parliament it was important to “try and make sure that we get alternative sourcing options," and suggested people eat readily available British seasonal food. However, Justin King, a non-executive director of Marks & Spencer who was CEO of Sainsbury's for a decade to 2014, told BBC Radio that “we did rather bring this problem upon ourselves" because horticulture has excluded from the government’s Energy and Trade Intensive Industries scheme (ETII) that provides help with energy costs. "We could have chosen to subsidise the energy this winter as we have done for other industries," King said.
British retail sales held steady in February after falling in January but stores expected sales volumes to slip again in March as the rising cost of living eats away at disposable incomes, according to the Confederation of British Industry's (CBI) distributive trades index, which rose to +2 this month from -23 in January. A Reuters poll of economists had pointed to a reading of -13. But a measure of expected sales in the month ahead fell to -18 from -15. "Whilst retail sales volumes were largely unchanged in the year to February and slightly above seasonal norms, firms remain pessimistic about their business outlook and are bracing themselves for yet another fall in sales next month," Martin Sartorius, CBI principal economist, said. Last week, Office for National Statistics data showed shoppers spent more than expected in January but inflation-hit households were buying fewer items and relying more on discounts.
The war in Ukraine helped to boost FTSE 100 arms and combat vehicle manufacturer BAE Systems as it reported record orders of £37bn amid what it described as an "elevated threat environment". The company’s sales were up 4.4% in the last year to £23bn as conflict rages in Europe for the first time in decades. Ukraine’s President Zelensky recently toured the continent pleading for tanks, planes and missiles. BAE said its revenue was up by almost 9% to £21bn, boosted by an order backlog of almost £60bn.
Shares in Rolls-Royce ended the day more than 23% up yesterday, taking it easily to the top of the FTSE 100, as it reported a 57% increase in profits in 2022 to £652m. Just last month, CEO Tufan Erginbilgic, who took over at the engineering group at the beginning of the year, warned staff in a global address that the company was “unsustainable” and a “burning platform”.
British Airways-owner IAG has returned to an annual operating profit, posting €1.2billion (£1.1billion) for 2022 after losing €2.8billion the previous year, and has told shareholders it expects performance will improve again in 2023. IAG also revealed this morning it has agreed to pay €400million to Spain's Globalia for the remaining 80% of airline Air Europa it did not already own. The acquisition is driven by IAG's confidence that demand for travel will continue to recover from the pandemic, the Daily Mail says. Reuters reports IAG as saying it forecasts a near 90% jump in 2023 profit.
The company behind the Orient Express and The Savoy Hotel has seen profit jump from £19m in 2021 to £594m last year. Accor is Europe’s largest hotel operator as well as owner of the luxury train service, and owns the Fairmont, Ibis and Pullman hotel chains. Accor put the boost down to revived demand for short getaways, particularly in December.
Cineworld said yesterday that it is unlikely that any deal when it emerges from US Chapter 11 bankruptcy protection later in the year will provide recovery for shareholders, as although it had received initial proposals from a number of counterparties for some or all of its business, none of them involved an all-cash bid for the entire company. 'Whilst the discussions suggest that there is a route to the company emerging from the Chapter 11 cases, in light of the level of existing debt that is expected to be released under any Plan, the Company does not believe that there will be sufficient creditor support for a Plan that contemplates any recovery for equity interests,' Cineworld said in a statement.
Sanjeev Gupta’s GFG Alliance has vowed to “fight” a New York investment fund’s bid to plunge one of its major customers into bankruptcy after fully acquiring the firm earlier this month, City A.M. reports. GFG is seeking to block West Midlands steel products maker Aartee Bright Bar from collapsing into insolvency after the manufacturer’s main creditor, FGI, decided to enforce its debts and filed insolvency proceedings against Aartee Bright Bar earlier this month. The West Midlands firm was forced to appoint Alvarez & Marshal as its bankruptcy administrator. GFG is now seeking to block those proceedings from going through, and save 250 jobs, after the steelmaking conglomerate fully acquired Aartee Bright Bar’s parent company, Aartee Group, on 17th February.
CBD brand Love Hemp has been rescued from collapse, weeks after the cannabis firm was forced to draft in administrators amid plummeting sales. City A.M. reports that the Croydon-born group, which has been promoted by boxer Anthony Joshua, was acquired for an undisclosed price by Portillion SPV1 Limited, which was founded recently by Kamran Sattar, the chief of financial-planner Portillion Capital and sole director of Portillion SPV1 which is a “special purpose investment vehicle ” that will be used to acquire CBD assets. “I am pleased that my team and I have been able to secure the future of Love Hemp and can finally make Love Hemp the go-to brand globally,” Sattaar said. As part of the sale Portillion will be taking on all the group’s existing employees, which are reported to be around 28.
Workers at Drax Hydro Limited which operates power stations across Scotland have voted to go on strike in a dispute over pay, the Unite union says. Drax Hydro is a part of Drax Group Plc which yesterday posted an annual profit of £731m, higher than expectations.
The amount of cash lost by UK investors following the collapse of crypto exchange FTX swelled to nearly £2m as burnt traders turned to the police in the hope of recovering their money, City A.M. can exclusively reveal. A freedom of information (FOI) request revealed that City of London police were talking to 32 people who lost £1.9m after the collapse of Sam Bankman-Fried’s Bahamas-based exchange, which imploded in early November amid a rush by customers to withdraw cash from the platform. The FOI request by trading website Investing Reviews showed how one UK-based trader spoken to by police lost over £1m in the firm’s collapse. Police said the youngest victim was a teenager, while the oldest was in their seventies.
Government outsourcer Serco has won a $690m contract with the US Department of Health to continue working on whether people are eligible for federal health insurance. The contract, which runs for almost five years, has a one-year base period and four option periods, and is due to start on 1st July, the FTSE 250 company said.
FTSE 250 recruitment firm Hays is on the hunt for a new CEO, as Alistair Cox is stepping down after 15 years at the helm. “It has been an honour and a privilege to lead Hays for over 15 years and I am extremely proud of, and grateful to, my colleagues for everything we have achieved together, he said. The firm saw net fees rise 15% but profits fall during the last half of 2022.
Animal genetics company Genus said yesterday that CEO Stephen Wilson has decided to retire as the company also posted a 14% rise in annual profits as it hoped for a price rebound this summer. Pre-tax profits rose £42.2m. Sales were up by a quarter to £350m.
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