- Lady Green says final instalment of £100m contribution will be completed soon
- Pension fund shortfall estimated to stand at £350m
- Alok Sharma has asked Insolvency Service to look at Arcadia bosses’ conduct if they launch probe into Topshop owner’s collapse
- Bonmarche collapses again as retail bloodbath escalates
- Shoppers flock to Debenhams with shops set for busiest day this year
- Tesco to repay £585m of business rates relief
- GardaWorld raises bid for G4S to £3.7bn at last minute
- Jeremy Warner: Britain’s shameful Covid response does not bode well for our post-Brexit future
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We're wrapping up, but ICYMI here are some of our top stories for the day:
- Flybe's return to the skies moves a step closer
- American Airlines puts Boeing 737 Max back in the air
- Bill Ackman's Pershing Square enters FTSE 100
- Prezzo bought by Swingers owner
- Bigger is beautiful for book publishers in battle with Amazon
Thanks for following along - Louis will be back with you in the morning!
Yorkshire Energy collapses
Gas and electricity supplier Yorkshire Energy has collapsed, leaving 74,000 customers to be picked up by another supplier.
My colleague Rachel Millard reports:
It is the latest of several small energy suppliers to go bust over the past three years, sparking concerns about new entrants' ability to withstand tough trading conditions.
Leeds-based Yorkshire Energy is too small to file detailed accounts, but in accounts for the year ending March 31 2019, the latest available, it owed £5.7m due within one year, and was owed almost £3.2m due within one year.
It follows the collapse of Effortless Energy and Tonik Energy this year, on top of 13 small suppliers that had gone bust between November 2016 and late 2019.
Newcomers had rushed into the market amid attempts to encourage competition. Coronavirus has caused some customers to delay payments, worsening conditions for some suppliers.
In a statement on its website, chief executive Annie Faulder said: "After two-and-a-half years in operation we sadly have begun proceedings to cease trading."
"We have operated since day one with the simple values of transparency and honesty, paying our renewable obligations on time and having customer service that we are proud of."
Under regulator Ofgem's safety net system, Ofgem finds another supplier to take on a collapsed company's customers, to make sure their supply is not interrupted.
Discovery to launch streaming service globally
American broadcaster Discovery will launch its streaming service globally in the new year, intensifying the battle for viewers in the crowded on-demand video market.
My colleague Ben Woods reports:
The NASDAQ-listed firm will roll out Discovery+ across the US on January 4, with the "largest ever content library for a new steaming service".
That includes more than 55,000 episodes across its stable of brands, including the BBC's Natural History collection and access to Olympic games broadcaster Eurosport.Discovery owns networks such as the Travel Channel and Animal Planet.
It has struck a distribution deal with mobile giant Verizon to hand its US customers a year-long subscription.
The service has been available in the UK since November through a partnership with Sky, the Comcast-owned pay TV company. Customers of Sky Q, the broadcaster's premium service, are being offered a 12 month free trial.
Pershing to replace Homeserve on FTSE 100
Pershing Square Holdings will join the FTSE 100 from the FTSE 250, according to the index's quarterly review. Billionaire Bill Ackman's fund will replace home repairs firm Homeserve, which is set for the FTSE 250 after just two quarters on the benchmark.
Details on Pershing:
Pershing's $11.4bn portfolio saw net gains of 62.8pc in the first 11 months of this year. Last month alone it boosted 13.4pc.
According to a company report, its biggest equity holdings as of late August included takeaway chain Chipotle Mexican Grill and home improvement retailer Lowe's, which have risen about 58pc and 28pc respectively this year.
Mr Ackman recently told investors Pershing is having its best ever year and that he is bullish for the year ahead, though did warn of possible volatility amid coronavirus. In March, before the huge market sell-off, he cautiously hedged his portfolio.
He has put on a new hedge - roughly one-third of the size the one earlier this year - to guard against swings. The first hedge earned the fund $2.6bn in profits, which was used to buy more of the stocks it already owns, but at cheaper prices.
Pershing's stock has climbed over 100pc since listing in 2017.
Other changes announced include:
- Entering FTSE 250: chemicals firm Elementis, and real estate investment trust Hammerson
- Exiting FTSE 250: marine engineering services firm Fisher (James) & Sons, and Scottish Investment Trust
All changes will be implemented at market close on December 18, and take effect from the start of trading on Monday, December 21.
Caffè Nero owners brew £5m 'survival fund'
Gerry Ford, Nero Holdings' controlling shareholder, has pledged £5m to shore up the coffee chain's finances, aimed at helping withstand any more escalation of the coronavirus crisis as it braces itself for a legal challenge from landlords, reports Sky News.
Creditors voted to approve its company voluntary arrangement (CVA) this week, despite a takeover proposal from the Issa brothers' EG Group.
- Read our previous story here: Caffè Nero rejects takeover offer from billionaire Issa Brothers
Bigger is beautiful for book publishers in battle with Amazon
Bertelsmann's tie-up with Simon & Schuster was a stark reminder that consolidation still remains the publishing industry's best weapon for countering the power of Amazon, the online retailing giant which started as a marketplace for books, my colleague Ben Woods reports.
"The fear is that the value chain has Amazon at the front and centre - it has become so powerful. That's why publishers are trying to get as big as possible in order to negotiate with this giant tech business," says Douglas McCabe of Enders Analysis.
- Read the full piece: Bigger is beautiful for book publishers in battle with Amazon
Aviation job losses widen
Job losses in the aviation industry have risen by about a third in the last three months, after another wave of coronavirus stalled any hopes of an imminent recovery.
Around 620,000 jobs have now been cut since the pandemic began, according to analysis by consulting group Five Aero - reported by Bloomberg - compared with 450,000 in early September. That is already above the half a million positions it previously predicted as being wiped out by year end.
Industry group IATA expect carriers to lose a combined $157bn in 2020 and 2021: 60pc more than it suggested in June, and five times the deficit it racked up through the 2008-2009 recession.
TUI secures third bailout from German government
Travel giant TUI has secured its third bailout from the German government, grabbing €1.3bn in funds alongside a further €500m cash from investors.
The group has been German’s second-biggest bailout recipient during the pandemic, beaten only by Lufthansa.
TUI appealed for additional aid after a new wave of virus lockdowns in Europe wiped out a hoped-for surge in late summer travel while stunting bookings for winter getaways and ski breaks. The bailout, which extends rescue funds to €4.8bn, was delayed by a debate over what conditions the state should attach, especially in relation to 8,000 planned job cuts.
Tina Green pledges to expedite £50m payment for Arcadia pension scheme
Lady Tina Green, wife of Sir Philip Green and controller of the couple’s business vehicle, Taveta, has pledged to speed up the final payment of a £100m contribution to Arcadia’s pension deficit.
In a statement on her behalf, Arcadia said:
Last year Lady Green committed to paying 100 million pounds in to the company’s pension scheme in 3 instalments.
Two instalments of the amount of 25 million pounds each as agreed has already been paid, the third and final instalment of 50 million pounds was not due to be paid until September 2021.
Lady Green is going to bring this payment forward to be paid in the next 7/10 days to complete the 100 million pound commitment of payment.
The company’s total pension deficit is estimated to stand at £350m.
Biden promises to ‘fight like hell’ on trade
Joe Biden has pledged to “fight like hell by investing in America first”, starting with a full review of the US-China Phase One trade deal.
My colleague Lizzy Burden reports:
America’s next president stressed in an interview with The New York Times that he would take a multilateral approach to trade, unlike Donald Trump, vowing to consult with traditional allies in Asia and Europe to “develop a coherent strategy” towards Beijing.
He claimed his goal was “to pursue trade policies that actually produce progress on China’s abusive practices – that’s stealing intellectual property, dumping products, illegal subsidies to corporations”, rather than perpetuating Donald Trump’s trade war.
He ruled out entering “any new trade agreement with anybody until we have made major investments here at home and in our workers”, citing energy, biotech, advanced materials and artificial intelligence as areas prime for government spending on research.
This would give the US more “leverage” in dealing with Beijing, which he said was currently lacking.
His first priority, however, will be passing an additional economic stimulus through Congress which he said would generate growth without long-term fiscal harm if “everybody pays their fair share, for God’s sake”.
“By that fair share, I mean there’s no reason why the top tax rate shouldn’t be 39.6pc, which it was in the beginning of the Bush administration,” he added. “There’s no reason why 91 Fortune 500 companies should be paying zero in taxes.”
EU regulators to clear LSE’s $27bn Refinitiv takeover
London Stock Exchange Group’s takeover of Refinitiv, the data provider backed by Blackstone and Thomson Reuters, received a major boost as the European Commission was reported to have agreed to give the $27bn (£20.2bn) deal the green light.
My colleague Michael O’Dwyer reports:
The transaction was announced more than a year ago but has been delayed after regulators decided to scrutinise potential harms to competition.
The Commission is set to clear the deal after the exchange agreed to new concessions to address antitrust concerns, according to a report by Reuters citing unnamed sources.
The London firm had already struck a €4.3bn (£3.9bn) deal to sell Borsa Italiana to Euronext and offered to allow rivals access to some of its data for a decade to help get the deal over the line.
Even with a deal, Brexit threatens car industry: Vauxhall boss
Car production will be disrupted even if a Brexit trade deal is struck, the UK boss of Vauxhall owner PSA Group has warned.
My colleague Alan Tovey reports:
Alison Jones said the down-to-the-wire nature of talks about a deal was causing “frustration” and uncertainty in the automotive sector.
Car companies had done all they could to prepare for potential disruption at ports if customs and border controls are imposed on January 1, she added.
Vehicle manufacturers have tried stockpile parts to ensure production can continue. However, the huge number of imported components in each vehicle means that creating large reserves is almost impossible due to lack of storage space.
US jobs numbers disappoint
The S&P 500 and the Nasdaq are to set fall from record levels hit in the previous session after data showed fewer-than-expected private job additions in November.
Dow futures fell 121 points, or 0.41pc, S&P 500 futures dropped 10.75 points, or 0.29pc. Nasdaq 100 futures declined 51.25 points, or 0.41pc.
‘Businesses have a duty to society’
Our Chief city commentator Ben Marlow has been writing about Tesco's decision to repay the business rates relief money received from the Government:
On the face of it, Tesco’s decision to pay back £585m of business rates relief is the mother of all reversals. It's certainly a climbdown, but only of sorts.
Even now, the supermarket is clinging to the claim that the tax break was deserved because of the additional overheads triggered by Covid, ignoring the fact that those costs were more than offset by the sales bonanza that grocers have enjoyed during the pandemic.
The other grocers will be fuming that Tesco has broken ranks, but it doesn’t necessarily mean that the rest of the sector will quickly follow suit.
Businesses need to recognise they have a duty to society as well as shareholders, and become more attuned to how their behaviour will be perceived by the wider public.
Prezzo chain sold
More upheaval on the high street, but this time a business that has been saved. Italian restaurant chain Prezzo has been bought by a property developer for an undisclosed sum, Hannah Uttley writes.
Cain International, which owns leisure brands including crazy golf chain Swingers, said it had bought Prezzo as a going concern after it was put up for sale by private equity firm TPG.
There are understood to be no immediate changes to Prezzo’s 3,000-strong workforce and its 180 restaurants. Existing management will also be retained with Cafe Rouge founder Karen Jones continuing as executive chairman.
Milliband: Green has ‘moral duty’ to pug Arcadia’s pension hole
Speaking in the Commons, Labour’s shadow business secretary Ed Milland has said Sir Philip Green has a “moral duty” to plug an estimated £350m hole in Arcadia’s pension scheme.
- Read more: Ben Marlow: Salvation is still within Philip Green’s grasp – he just has to do the right thing
Wetherspoon shares drop after Tim Martin sells £5m worth of shares
Shares in JD Wetherspoon have dipped in recent minutes, after chair Tim Martin sold £5m worth of shares in the pub chain.
Mr Martin, a vocal critic of the Government’s lockdown measures, sold 431,500 shares yesterday at £11.66 apiece. He still holds 27.03pc of the company’s stock.
ADP: US added 307,000 private payrolls last month
The US added 307,000 prviate sector jobs last month, according to data from payroll operator ADP.
The figure fell significantly short of expectations – economists polled by Bloomberg has expected a reading of 440,000.
The reading bodes poorly ahead of Friday’s full US labour market report.
Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said:
While November saw employment gains, the pace continues to slow. Job growth remained positive across all industries and sizes.
British workers’ wages hit hardest by pandemic
Britain’s workers have suffered the “clearest” slump in wages during the pandemic as the economic crisis worsens a decade-long pay pinch only matched by struggling Japan and Italy.
My colleague Tom Rees reports:
The UN’s International Labour Organization warned Covid cut average real wages in the UK by more than 2pc compared to 2019 levels, prolonging a lost decade for pay.
The UK suffered the joint-biggest fall in average real wages in the G20 between 2008 and 2019 with economic laggards Japan and Italy the only other countries to endure a slide in pay. By comparison wages in Germany grew by 15pc in real terms over the same period, the second strongest after South Korea.
Real wages in the UK rose by 1.1pc in 2019, inched up 0.7pc the year before and fell 0.2pc in 2017, the body estimates. That was not enough to overcome a sharp fall in pay following the financial crisis.
Johnson say Insolvency Service will look into Arcadia
Speaking in the Commons, Boris Johnson says business secretary Alok Sharma has written to the Government’s insolvency service, and instructed them to “look at the conduct of the Arcadia directors”.
The PM added: “we will be doing everything we can to restore the high streets of this country”.
In pictures: Britons rush to shops, gyms and pools on ‘Wild Wednesday’
It’s not the same all over, though. From Ilford, my colleague Laura Onita reports:
Although there were no queues outside Debenhams in Ilford, London, shoppers poured in and filled their baskets with clothes, toys and beauty products.
Nearby rivals Next and New Look were empty in the morning. Shanaz Hussain, who bought tops for her two daughters, 18 and 20, said Debenhams was “the only shop I’ve come to today” and it was “because of the [insolvency] news yesterday”.
A father and son duo were also hunting for bargains after they heard there will be “a fire sale”, but left disappointed because some of the brands, such as Levis, were full price.
There was no sign of liquidators.
Leon launches restructuring deal
Fast food chain Leon has launched a company voluntary arrangement as part of efforts to slash its rent in the face of the pandemic.
The group, which include Henry Dimbleby – Boris Johnson’s ‘food tsar’ – among its founders, will seek approval from creditors to move some sites to a rent free model and get turnover-based rents on others.
Leon, which operates 75 sites globally, said the restructuring comes as it continues to suffer from “severely reduced footfall numbers” following the second national lockdown in England.
It said it expects revenues to continue to be weighed down by local tiered restrictions which have started today…Leon stressed that the CVA will not impact staffing levels and will preserve the majority of its current store estate.
Debenhams packed as shoppers rush to get discounts
Retailers are braced for their busiest day of trading so far this year as the end of lockdown sparks a race to buy Christmas gifts.
My colleague Hannah Uttley reports:
Non-essential stores across England opened their doors for the first time in a month on Wednesday after England was put back in lockdown in a bid to contain the virus.
Shoppers flocked to Debenhams stores and website to take advantage of big discounts after the department store chain's administrators said it would be wound up early next year.
Online shoppers were placed in virtual queues to cope with the high volume of traffic to its website while others waited outside stores before doors opened.
Goldman eases restrictions London staff levels
Goldman Sachs has eased its restrictions on London-based staff, saying they no longer need to work from home as England’s month-long lockdown comes to an end.
A separate email sent to Goldman staff noted that client meetings in the office aren’t permitted except under special circumstances. Meetings outside the office are discouraged but allowed for up to six attendees, if deemed business critical.
Other firms in the City of London are also likely to let more workers return, giving a boost to businesses in the financial district just before Christmas.
A tale of two high streets…
Even as another retailer falls into administration, many people across England will be flooding out to non-essential retailers, which have reopened their doors in much of the country as lockdown is lifted. Our video team has put together a video on the scenes outside Primark today:
1,500 jobs at risk
Bonmarché’s administration means a further 1,500 jobs are at risk – not on the same scale as Arcadia and Debenhams, but hugely painful nonetheless.
Administrators RSM Restructuring Advisory say all its 225 stores will remain open and that no jobs will be cut as it tries to find a rescuer.
It already closed 30 stores before Christmas last year.
Damian Webb, joint administrator of RSM Restructuring Advisory, said:
Bonmarche remains an attractive brand with a loyal customer base.
It is our intention to continue to trade whilst working closely with management to explore the options for the business.
We will shortly be marketing the business for sale, and based on the interest to date we anticipate there will be a number of interested parties.
Bonmarché enters administration again
Another retail failure, just flashing over the PA wires:
Fashion chain Bonmarché has collapsed into administration for the second time in just over a year, its administrators have said.
The retailer was bought out of administration by retail mogul Philip Day in February, as part of a pre-pack deal.
Here are some of the day’s top stories from the Telegraph Money team:
- NS&I to carry on sending Premium Bond cheques after savers revolt: National Savings & Investments, Britain’s most popular savings institution, has delayed plans to phase out prize cheques after customers suffered repeated technical problems.
- Three stocks every 50-year-old should buy: Investors on the final approach to retirement have difficult choices to make when it comes to selecting stocks. On the one hand, they should play it safe but also need to make sure they can squeeze out every last bit of return.
- Landlords could claim £27,000 stamp duty rebate after tax rule change: Landlords could be due a windfall worth tens of thousands of pounds after the rules regarding stamp duty payments were clarified by HM Revenue & Customs.
Avon Rubber boosts dividend after solid year, but shares fall on profit miss
Avon Rubber bumped up its dividend having shrugged off the pandemic, but is among the biggest fallers on the FTSE 250 after missing profit estimates.
The group – which makes tactical equipment for the military, fire and police forces – made a final payout of 18.06p per share, taking its full year dividend total 27.08p – both figures up 30pc on last year.
Its revenues rose 30.8pc year-on-year to £168m, but were flat once currency swing are taken into account. Profit before tax was £0.5m, from £8.7m last year.
Its operating profit of £30.2m fell short of analysts’ estimates for £38.1m.
Avon Rubber said was “well-positioned” for success in 2021 and beyond, saying that its medium-term outlook was underpinned by multi-year military contracts across its portfolio.
Chief executive Paul McDonald said:
We have consistently delivered on our strategy to invest in expanding our product portfolio to meet more of the protection needs of our customers. This has enabled us to build a broader and more visible long-term contract portfolio to position the business to deliver further growth in 2021 and beyond.
The group recently completed its acquisition of US-based helmet manufacturer Team Wendy, which it said would help it expand its product range and customer base globally. It also sold off its legacy milking point solutions operations.
Stifel’s Annabel Hewson said the group’s respiratory system specialism and strong M&A execution “deserves a market premium”.
Ryanair and Wizz Air passenger number a fifth of 2019’s
Budget carriers Ryanair and Wizz Air have reported November passenger statistics – with the figures making for grim reading in both instances:
- Ryanair says its traffic was at 2m last month, down 82pc from 2019’s 10.2m
- Wizz Air served 456k passengers, down 84.7pc from about 3m in 2019
G4S tells shareholders to take ‘no action’ in response to GardaWorld’s improved offer
G4S has issued a snap response to GardaWorld’s improved takeover offer, encouraging its shareholders to “take absolutely no action”.
The security outsourcer said it is “currently evaluating” the raised offer, noting that it continues to hold discussions with Allied Universal Services over a possible offer.
Australian lawmakers to urge Rio Tinto to make payout over Aboriginal site destruction – Bloomberg
An Australian parliamentary committee tasks with conducting an inquiry into mine blast by Rio Tinto that caused destruction at two ancient Aboriginal heritage sites is likely to recommend the mining giant pays compensation, Bloomberg reported.
Citing a source, the news service said:
Legislators will set out proposed actions the company could take to address the issue in an interim report next week. The committee is unlikely to make any recommendation on the specific amount of compensation that could be paid, said the person, who spoke on condition of anonymity to discuss private details.
GardaWorld up bid for G4S
G4S suitor GardaWorld has upped its bid for the security outsourcer from 190p per share to 235p per share, clearing the threshold at which many major shareholders said they would seriously consider a bid.
The Canadian security group also slashed the investor acceptance threshold for the deal from 90pc to an easier 50pc plus one share.
The offer values FTSE 250-listed G4S at £3.68bn, GardaWorld said. G4S’s shares closed at 229p yesterday, giving it a valuation of £3.55bn.
GardaWorld said it had also reached an agreement with G4S’s UK pension trustees on a £770m support package, which it said would provide a “definitive resolution to the persistent deficits that have been a feature of G4S's UK defined benefit pension arrangements”.
Stephan Crétier, GardaWorld’s chief executive, said:
Shareholders have a simple choice: remain invested in a company which has consistently failed them and the wider community for so many years, or realise their investment in cash, at a significant and highly attractive premium…
There can be no better owner for G4S than GardaWorld. Ours is a programme for growth and investment that G4S so desperately needs. This will take time but we have the skills, expertise and ambition to take on this challenge.
G4S shareholders must accept the offer by December 16th.
Tesco pledges to pay back £585m of rates relief
Tesco is to repay £585m in business rates relief it received during the pandemic after declaring it was “financially strong enough” to return the money to the taxpayer.
My colleague Jon Yeomans reports:
The supermarket insisted “every penny” of the rates relief it received had been spent on its response to the pandemic, and that it would incur around £725m of costs this year from Covid-19 after altering its stores to introduce social distancing – “well in excess of the £585m rates relief received”.
However sales have boomed at supermarkets since March and the sector has been seen as one of the winners from Covid-19; Tesco's sales suged 30pc in the first half of its financial year. It admitted its business had “proven resilient in the most challenging of circumstances”.
Agenda: Waking up in a new reality
Good morning. The MHRA’s approval of the Pfizer/BioNTech vaccine for Covid-19 in the UK could give markets a further lift, but futures are currently pointing towards narrow losses at the open.
Meanwhile, England is waking up to a new tiered system that imposes steep curbs on hospitality and other businesses. The race to buy Arcadia's assets continues and Debenhams' website has seen a surge in demand after launching a fire sale ahead of its liquidation.
5 things to start your day
1) Debenhams' demise leaves 14m sq ft hole in high street: Once Debenhams has cleared its stock, it will abandon 13,628,740 sq ft of floor space - equivalent to 177 premier league football pitches.
2) Landlord tells Mike Ashley to pay his rent on Sports Direct shops: Ben Habib of First Property Group says Frasers tycoon owes hundreds of thousands in unpaid rent despite offering £50m lifeline to Arcadia.
3) Activist investors go back on the attack after pandemic slump: Recent attacks by fund activists signal a roaring return to activist activity following a prolonged silence during the pandemic.
4) TalkTalk faces Openreach legal claim over unpaid millions: TalkTalk faces accusations in the High Court of being months and millions of pounds - understood as about £16m - in arrears to Openreach.
5) Salesforce buys $28bn Slack – with $750m for British co-founder: Salesforce is buying office messaging app Slack for $27.7bn (£20.6bn) in one of the world’s largest ever software deals, using cash and shares.
What happened overnight
Asian shares rose on Wednesday after a strong lead from Wall Street fuelled by hopes for additional US economic stimulus and a coronavirus vaccine, but trade was choppy as some investors booked profits.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.27pc, but was still trading below last week's all-time high. Australian stocks rose 0.12pc.
Shares in China recovered from early losses and rose 0.12pc.
Tokyo stocks were little changed after setting a new 29-year high. Softbank Group shares fell 0.66pc after Bloomberg News said the tech investor is winding down its options trades on companies including Amazon.com Inc and Facebook Inc.
Meanwhile, Australia has exited its first recession in almost 30 years, after official figures on Wednesday showed the economy grew 3.3pc in July-September compared with the coronavirus-hit previous quarter.
With local transmission of Covid-19 largely under control, official data showed businesses have begun to rebound and consumer spending has surged.
The Australian Bureau of Statistics said household spending largely drove the economic bounce, rising 7.9pc compared with the previous quarter.
Coming up today
Corporate: Augmentum Fintech, Loungers (Interim results); Avon Rubber, Ixico, Residential Secure Inc, Stock Spirits (Full year)
Economics: Unemployment (eurozone); ADP payrolls change (US)