UK to Simplify IPO Rules to Compete with Overseas Markets

Happy Saturday to you.

Every week I’m here to bring you the latest business news of what’s going on both in the UK but also globally. Feel free to let me know if there’s anything specific you’d like me to cover in future updates.

In the meantime happy reading!

GENERAL

Bank closures prompt calls for High Street hubs - The UK should open more shared banking hubs to help those who feel uncomfortable managing their finances online, a charity has said. Bank hubs - which are spaces shared by several different High Street lenders - are meant to help communities that have seen all their bank branches close. But only four hubs have opened so far, while an average of 54 UK branches have shut each month since January 2015. Age UK said older or vulnerable people could struggle with online banking. The charity's research suggests 27% of over-65s and 58% of over-85s rely on face-to-face banking.

UK to simplify IPO rules to compete with overseas markets - Regulator the Financial Conduct Authority revealed plans to attract a wider range of companies after seeing listings in the UK fall by 40% since 2008. They include creating only one listing segment in place of the existing standard and premium segments. Under current rules, businesses seeking entry to the FTSE indexes must hold a premium listing, comply with extremely high standards of regulation and pay substantial costs.

Food inflation hits another record high - Food prices increased by a record annual rate of 15.7% last month as pressure continues to mount on household finances. Fresh food prices saw a record jump of 17.8% year-on-year for April, while the price of ambient products, such as tinned goods and other store-cupboard items, went up 12.9%. The latest figures come as the average price of food and non-alcoholic drinks in the UK has been seeing its sharpest increase in more than 45 years.

14 million jobs set to be lost to labour market churn by 2027 - Almost 14 million jobs will be lost globally within the next 5 years as a result of stunted economic growth, advancement in smart technology and the rising cost of living, according to new research from the World Economic Forum. 83 million jobs will be lost in the next five years, while 69 million jobs will be created, a loss of 2% on current employment levels, the World Economic Forum’s future of jobs report found.?

UK government borrowed less than expected last year - Despite supporting households with their energy bills and facing higher borrowing costs, borrowing was estimated at ￡139.2bn in the year to 31 March, official figures show. That was ￡18.1bn more than in 2021-22 but less than the ￡152bn predicted by the government's forecaster last month.

ON THE UP

壳牌 hands ￡4.7bn to shareholders as quarterly profits beat forecasts – The oil and gas major reported net profits of $9.6bn (￡7.6bn) for the first three months of the year. The figure was slightly down on the sum achieved in the final quarter of 2022 but above the $9.1bn (￡7.2bn) achieved in the same period a year earlier. Its own estimate in advance of the first quarter earnings report had stood at $8bn (￡6.3bn).

Addison Lee owner back in black as cab bookings surge - The company that owns London’s private hire cab firm Addison Lee has broken into profits as passenger revenue surged by a third. Accounts filed at Companies House this week show that parent company Atlas Topco made an operating profit of ￡12.4m in the year to end August, compared with an ￡8.9m loss in the previous year. Revenues soared from ￡164m to ￡218.5m.

Trainline shrugs off UK strikes with ￡4.3bn in ticket sales as continental success keeps it on right track - Trainline reported bumper ticket sales of ￡4.3bn for the last 12 months, up 72% year on year and 16% higher than pre-Covid. The London-listed seller saw revenues of ￡327m, up 74% from last year, citing surging ticket sales in the UK and on the continent especially as a key driver. The results come alongside soaring international ticket sales, particularly in Europe. Spain has been a key success for the company and saw a four-fold increase in net ticket sales from last year.

In-store collection boost helps Domino's capture more market share - Pizza chain Domino’s UK said it increased its market share in the first three months of the year as an increase in the number of collections offset a drop in delivery orders. The fast food outlet – which also has sites in Europe – said it saw its share of the UK takeaway market rise to 7.8% in the first quarter, up from 6.4% a year earlier. It came as around 23% more customers went into its stores to pick up their orders, compared with a 4.9% drop in the number of delivery orders.

Lloyds Banking Group profits swell by 46% as bank boosted by interest rate rises but guidance remains unchanged - The lender’s pre-tax profits came in at ￡2.3bn compared to ￡1.5bn the same quarter last year. Charlie Nunn, chief executive of Lloyds Banking Group said: “The group has delivered a solid financial performance in the first quarter of 2023, with strong net income and capital generation, alongside resilient observed asset quality.”?

The White Company founder cashes in on ￡50m dividend - The White Company founders have received at least ￡50m in payments as profits lift post-pandemic. The upmarket homewares and fashion retailer paid a ￡50m dividend to an entity controlled by founder Chrissie Rucker and her husband, Charles Tyrwhitt founder Nicholas Wheeler. It’s highest paid director, believed to be Rucker, took home ￡5m last year as a long-term bonus plan cashed in.

Greene King sees some costs start to ease as it toasts bounce in annual profits - The chief executive of Greene King has told Sky News it is starting to see an easing of some cost pressures and hopes the trend will continue as the hospitality industry gets into gear for the summer. Nick Mackenzie admitted that energy, food and labour costs meant the outlook continued to be challenging but there had been some progress in 2023 to date and he hoped fewer bill burdens lay ahead.

Card Factory profit triples as shoppers return to high street - Card Factory profits have more than tripled thanks to shoppers returning to stores and a strong golden quarter. The greeting cards retailer’s pre-tax profits skyrocketed 368.5% to ￡52.4m in the 12 months to 31 January, up from ￡11.1m the year before. The figure includes a ￡3.5m one-off benefit. Sales surged 27.1% to ￡463.4m which was “underpinned by a strong performance of store-based sales and Everyday card ranges, alongside strong trading through the Christmas season”.

汇丰 says UK buyout of Silicon Valley Bank boosted profit by ￡1.2bn - Banking giant HSBC says its profits got a ￡1.2bn boost from the purchase of collapsed Silicon Valley Bank's British business. Europe's biggest bank posted a pre-tax profit of ￡10.3bn for the three months to the end of March. That is more than three times the amount it made for the same time last year.

bp unveils further bumper profits as oil and gas price hikes continue to fuel energy giant’s earnings - BP has unveiled its second-highest first-quarter profit in more than a decade, fuelled by historically elevated oil and gas prices. The energy giant confirmed underlying replacement cost profits – the way the company prefers to measure its earnings – of ￡3.97bn in the first quarter. The company attributed its performance to “exceptional” gas marketing and trading, and “very strong” oil trading.

IN THE DOLDRUMS

Virgin Money profits fall amid higher provisions for customer arrears - Interim profits at Virgin Money have fallen amid higher provisions for a potential increase in customer arrears, new results show. The challenger bank, which has its main bases in Newcastle, Glasgow and Leeds,?reported underlying pre-tax profit of ￡312m for the six months to the end of March, down from ￡371m in the same period last year.

Pearson shares fall after US digital learning rival says AI hurting its business - Almost ￡1bn has been wiped off the stock market value of the digital learning company Pearson after a US rival admitted that the rise of artificial intelligence chatbot ChatGPT is hurting its business. Jittery investors sent Pearson’s shares down more than 15%, making it the biggest faller among London-listed companies on Tuesday, after the California-based online learning service Chegg reported a 5% drop in subscribers and pulled its full-year guidance.

Italian chain Prezzo to shut 46 restaurants, including five in London, with 810 jobs set to go - After being hit hard by soaring energy and food costs, the Italian restaurant chain has said about 810 workers are at risk of redundancy as part of the overhaul. Bosses at the private equity-owned businesses said the cuts, which are part of a broader strategic review, will affect sites where “the post-Covid recovery has proved harder than we had hoped”.

Mirror publisher blames revenue decline on Facebook changes - The publisher of the Mirror, Express and Daily Star newspapers has blamed changes in the way Facebook displays news content for a slide in its digital revenues. Reach, which also owns hundreds of regional newspapers including the Birmingham Mail, Liverpool Echo and Manchester Evening News, reported a fall in group revenue of almost 6% for the four months to 23 April.

ONES TO WATCH

Vodafone , CK Hutchison Holdings Ltd set to unveil UK mobile tie-up soon - Vodafone and CK Hutchison are close to agreeing a merger of their UK telecoms businesses, in an expected ￡15bn deal that would create the country's biggest mobile operator. The deal would value the equity of the combined group at about ￡9bn, with roughly ￡6bn of debt. The valuation is roughly in line with peers.

Next keeps profit guidance after quarterly sales edge lower - Fashion retailer has maintained its guidance for annual profit after reporting a smaller decline in first-quarter sales than it expected, saying it was too early in the year to change its outlook. UK consumers have been squeezed by inflation that hit a 41-year high of 11.1% in October and has remained in double digits since, including March's stronger-than-expected reading of 10.1%.

AI to be investigated over consumer protection fears - The Competition and Markets Authority (CMA) is launching a review of the artificial intelligence market. It will include the models behind popular chatbots like ChatGPT. The AI industry has faced scrutiny from regulators lately, over the pace at which it is developing technology to mimic human behaviour. The watchdog will assess whether or not AI provides an unfair advantage to companies that are able to afford the technology.

Dyson plans ￡100m research hub in Bristol city centre - Engineering giant Dyson plans to invest ￡100m in a new research and development hub in central Bristol. The technology centre would be home to hundreds of software and artificial intelligence engineers, the company said. Dyson said it had chosen Bristol because it was an "international hub for software and digital skills". The centre is planned for a Dyson-owned building opposite Castle Park, close to Bristol Bridge.

Superdry eyes ￡15m share sale - Superdry is said to be in advanced talks to raise ￡15m through a sale of its shares as it looks to bolster its balance sheet. The retailer confirmed on Tuesday it was in “positive discussions” with investors over a proposed equity fundraising of up to 20%.

Netflix to invest ￡2bn in new South Korea films and TV shows - Streaming giant Netflix says it will invest ￡2bn in South Korea over the next four years. The firm's co-chief executive Ted Sarandos made the announcement after he met South Korea's President Yoon Suk-yeol in Washington. Netflix has seen success with South Korean productions, including the hugely popular show Squid Game.

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