Published: 06 April 2023
By Suzanne Evans, Director, Political Insight
The Financial Conduct Authority (FCA) has set out a 12-month plan to “make the UK a more attractive place for business” and deliver “better outcomes for consumers and markets”. The proposals include reforms to the UK’s listing regime to “attract world leading firms and encourage competition,” and an overhaul of consumer protections. FCA head Nikhil Rathi said: “We set out a bold vision last year of what we wanted the FCA to be, and we are well underway to achieving our objectives thanks to our talented colleagues and the better use of technology and data across our organisation”. A flurry of firms have snubbed the London markets recently, including building supplier CRH and chipmaker Arm who have instead listed in rival New York.
The UK’s service sector has enjoyed its strongest rise in new business in a year, amid growing confidence among clients in both domestic and international markets. The S&P Global/CIPS UK services PMI survey showed a reading of 52.9 last month, down from a score of 53.5 in February. Any reading above 50 is considered growth. The services sector accounts for almost 80% of UK economic output.
In the latest blow to its reputation, the Confederation of British Industry (CBI) has found itself shunned by The Treasury, which has elected to “temporarily pause” all engagement with the UK’s largest business lobby group because of the string of sexual misconduct allegations that have surfaced around it in the past 72 hours. The CBI is usually consulted regularly by Ministers on economic and business policy.
Harbour Energy said yesterday that it plans to cut around 350 jobs – nearly 30% of its approximately 1,200 employees - and pinned the blame on the Government's energy windfall tax. In January, the company initiated a review of its UK organisation because of the energy profits levy, which results in an effective tax rate of 75% in the UK regardless of the level of oil and gas prices in the market or realised. In its full-year results in March, Harbour said the review was expected to lead to a "significant" reduction in its UK workforce. Now the job losses have been announced. A spokesperson for the group told Sharecast News: "We are working hard to mitigate the impact of this reduction, by for example, a recruitment freeze (excepting safety critical and business critical roles) and opening a voluntary redundancy scheme”.
Motoring group RAC has again accused Britain’s ‘Big Four’ supermarkets - Tesco, Asda, Sainsbury’s and Morrisons - of overcharging drivers at petrol pumps. Although fuel prices fell for the fifth straight month in March, with a penny coming off petrol and 4p off diesel, the RAC says diesel prices should have fallen much further. Wholesale petrol and diesel prices were almost identical during March but the average price of diesel at the pumps was 162.9p compared to only 146.5p for unleaded, a difference of 16.4p. The average retailer margin on a litre of diesel in March was 21p, according to RAC, three times more than usual and also three times the average margin for a litre of petrol in the same month. If diesel prices at the pumps had come down in line with wholesale prices a litre would cost only 152p, the RAC calculates, saying diesel prices have not fallen as fast as they should have because of a lack of competition which means supermarkets can “exploit” motorists. Simon Williams, RAC fuel spokesman, said: “We hope the Competition and Markets Authority is paying close attention...If a small retailer at Whitchurch in Shropshire can afford to sell both petrol and diesel for just 142.9p a litre, then there’s surely no reason why the big four supermarkets can’t as well”.
Talks between Royal Mail and the Communication Workers Union (CWU) have ended without an agreement again. Negotiations have now been going on for 11 months. A Royal Mail spokesman said yesterday he was "deeply concerned" the talks had ended with no agreement. "We made substantial efforts to reach an agreement, including making a number of further improvements to our offer. These improvements were all based on feedback from the CWU, and we were hopeful that the CWU would put a deal to its members," he said. "We remain committed to reaching an agreement with the CWU. We have been clear throughout the dispute that not transforming our network and working practices is not an option in a business losing more than £1m a day. In the best interests of the business, our customers, and the job security of our postmen and women, change cannot be delayed any further." A spokesperson for the CWU said: "There has been progress in several areas, and the union made it clear last night that we are willing to continue negotiations today and tomorrow to finalise an agreement. This offer has been reiterated to the company this morning”.
P&O Ferries is considering cutting 60 UK-based jobs, which are thought to be managerial and supervisory roles, the BBC says. Another 60 could be "restructured" into new or similar roles. The announcement comes just over a year since the ferry operator suddenly sacked nearly 800 seafarers without notice, replacing them with agency staff and drawing widespread criticism. A P&O Ferries spokesperson said the company was consulting with trade unions about the proposed changes, which are meant to put the operator on "a competitive, sustainable footing". A representative of the GMB union said they were extremely disappointed, and felt the company was letting down its staff again.
Vodafone's Spanish business is reportedly attracting takeover interest from potential buyers. Bloomberg cited people with knowledge of the matter as saying it has been contacted by private equity and strategic suitors. Sources said that while it's not running a formal sale process for the unit, the FTSE 100 telecom would consider offers at the right price. It is understood that Vodafone's Spanish unit could be valued at more than $4bn (£3.21bn). Deliberations are ongoing and there's no certainty they'll result in a sale, Bloomberg said.
London-listed banknote maker De La Rue is facing a shareholder revolt after a major investor demanded that chair Kevin Loosemore be removed for failing to improve the company’s performance. City A.M. reports that in a letter to shareholders, AIM-listed activist fund Crystal Amber argued that De La Rue is failing to meet its financial targets, which it set out as part of a turnaround plan back in February 2020. Crystal Amber, which has a near-10% stake in the firm, said that based on current market expectations, revenue for the year will be £340.5m, 25% below the forecasts. Other measures, such as operating margin and free cash flow, will also likely come in below expectations, it said. The fund added that net debt at De La Rue is forecast to reach £103.3m – half a million higher than three years ago when De La Rue’s turnaround plan was first announced. “The turnaround plan has failed by every measure,” the fund wrote in the letter. Back in 2020, Crystal Amber stumped up £18m in “rescue capital” as part of De La Rue’s £100m capital raise, making it the lead investor. It now notes that De La Rue’s market value is £100m, despite the past £100m equity investment. “On a like for like basis, the entire £125m pre-money stock market valuation has been destroyed,” the fund said.
The owner of Franco Manca has been snapped up by a Japanese food franchise company in a £93m deal – the latest in a long line of London-listed firms to be taken private by foreign entities. Fulham Shore, which also owns The Real Greek franchise, announced it was offloading the business to Toridoll, a Tokyo listed business which owns fast food chains Wok to Walk and Marugame Udon in London. The offer represents around a 38% premium on the firm’s closing price yesterday.
Meat packer Hilton Foods has blamed “significant” challenges in its seafood wing for nosediving profits, and announced former Co-op CEO Steve Murrells will be taking over as boss. Hilton witnessed a steep decline in profits down to £29.6m from £47.4m the previous year. The firm said global supply chain issues and soaring inflation battered earnings, with its seafood arm hit particularly hard, despite it having reaped benefits from new partnerships in its meat division. Current CEO Philip Heffer is stepping down after a 30 year tenure.
Alexander Dennis has announced plans to open a new production facility at its Falkirk HQ. The UK's largest bus manufacturer's third British factory will build the firm’s new Enviro400EV buses.
Iraq has agreed to a smaller 30% stake in TotalEnergies long-delayed $27 billion project to build four oil, gas and renewables projects with an initial investment of $10 billion in southern Iraq over 25 years. The Middle-Eastern country had wanted a 40% stake. Baghdad is seeking to reverse the exit of oil majors from the country. Exxon Mobil, Shell, and BP have all scaled back their operations in Iraq in recent years, contributing to a stagnation in its oil production.
Pakistan's central bank raised its key interest rate to a record 21% on Tuesday in a bid to curb crippling food inflation and maintain the confidence of foreign creditors. The 100 basis-point increase by the State Bank of Pakistan comes as the country grapples with record annual consumer inflation of over 35%. Global factors have compounded consumer inflation already buoyed by Pakistan's weakening currency, energy tariff increases and hikes in food prices due to Ramadan. Food, beverage, and transportation prices have all surged more than 45%, putting pressure on household budgets and leaving many desperate. At least 16 people were killed in stampedes for food aid last week.
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