BP to sell London HQ as group adapts to “hybrid” working
As the UK is shifting to flexible working, BP is reportedly planning to sell its London headquarters.
The Times reported on Sunday rent back the building from the new owner before leaving permanently in two years’ time.
The oil giant employs over 6,500 people in the UK and has offices in central London and Sunbury-on-Thames.
The group has said that it plans to move towards a more “hybrid work style”, with a greater balance towards home working.
BP purchased the headquarters in St James’s Square back in 2001 for £117m and could sell it for an estimated £300m today.
Earlier this year, BP revealed plans to axe 10,000 jobs following a global slump in oil demand.
“We are spending much, much more than we make – I am talking millions of dollars, every day,” said chief executive, Bernard Looney in an email to staff.
The news comes as the government is set to kickstart its campaign to get people back into the office.
Transport Secretary Grant Shapps told Sky News last week: “What we’re saying to people is it is now safe to go back. Your employer should have made arrangements which are appropriate to make sure it is coronavirus-safe to work. You will see some changes, if you haven’t been in for a bit, as a result.”
“Clearly there are things you can’t just do remotely, and a lot of those people have carried on working. But for the rest of us, also, you just miss out on that human spark when you’re not with people. You will find the office has been reorganised into a coronavirus-avoidance friendly environment and probably a few changes as a result,” he added.
Amigo Holdings founder calls for takeover, shares surge
Amigo Holdings shares (LON: AMGO) jumped on Friday morning after the lender’s founder called on private investors to support his return.
James Benamor was previously the group’s chief executive, however, left in 2018 and has been in public disagreements with rows over the management ever since.
Benamor has called for the ousting of finance director Nayan Kisnadwala and for himself to be reinstated as chief executive.
Results released today from Amigo Holdings revealed a 31.7% drop in revenue from £71.5m in 2019 to £48.8m for the same period in 2020.
The lender blamed the impact of Covid-19 related payment holidays for the drop in revenue.
Commenting on the Q1 results, Kisnadwala said: “The whole team at Amigo is focused on addressing our legacy issues and building a sustainable business for the long term. Operationally we have turned a corner in our handling of complaints. We are on track to meet the agreement reached with the FCA to resolve our complaints backlog and continue to work with the FCA on its ongoing investigation. We have adequate liquidity and funding to support our ongoing business activity.
We are updating our lending processes and policies to enable Amigo to restart lending in a prudent manner by the end of 2020.”
The firm is no providing full-year guidance for expected performance this year due to the uncertainty around the pandemic and a current investigation by the Financial Conduct Authority.
Amigo Holdings shares (LON: AMGO) are currently trading +15.72 at 13.89 (1237GMT).
Gatwick reveals £321m loss as passenger numbers plunge
Gatwick airport has swung into a £321m loss amid the pandemic.
Due to a 66% fall in passengers for the six months ending 30 June, the UK’s second-busiest airport revenues plunged from £372m last year to £144m.
As the aviation industry has taken a hit across the world, Gatwick’s numbers highlight the damage the pandemic has really caused.
Passenger numbers in the first six months of 2020 were just 7.5m – compared to the 22m from the same period in 2019. According to Gatwick airport, it will take up to five years to return to normal levels.
As a result, the airport announced plans to cut 600 jobs as part of a restructuring to survive the effects of the pandemic. Gatwick airport has already cut staff this year from 3,046 to 2,515.
Stewart Wingate, the chief executive of Gatwick airport, said: “The negative impact of Covid-19 on our passenger numbers and air traffic at the start of the year was dramatic and, although there are small signs of recovery, it is a trend we expect to continue to see.
As with any responsible company we have protected our financial resilience by significantly reducing our operational costs and capital expenditure.”
Gatwick is not the only airport to have revealed a drastic drop in revenue over 2020. Heathrow airport revealed a £1bn loss for the first six months of 2020.
Heathrow’s chief executive has called for a passenger testing regime.
“As many of our customers have experienced, it’s difficult to plan a holiday that way, let alone run a business,” said John Holland-Kaye.
“Testing offers a way to safely open up travel and trade to some of the UK’s biggest markets which currently remain closed. Our European competitors are racing ahead with passenger testing; if the UK doesn’t act soon, global Britain will be nothing more than a campaign slogan.”
Frontier Developments shares surge on strong sales
Frontier Developments shares (LON: FDEV) jumped over 8% on Friday morning, as the group announced it was set to reach the top end of its sales forecasts.
The developer said that full-year revenue is expected to reach analyst expectations of £83m and £95m – helped by three new video game titles the group revealed on Thursday.
A popular game, Planet Zoo, was released in November 2019 After a highly successful pre-launch marketing strategy, the game achieved the global number one and number two bestseller spots on Steam.
David Braben, Frontier Developments’ chief executive, said: “Planet Zoo’s successful launch and subsequent performance is testament to the superb efforts of our growing team. We now have four successful games in the market each with a clear roadmap of additional content in line with our proven strategy.”
“We have started calendar 2020 in a great position. We’re bringing Planet Coaster to console players and significantly expanding the Elite galaxy this year, and developing two major games for release in the same financial year (FY22) for the first time as a self-publisher. I am also very pleased with the progress with Frontier Publishing, both in growing our internal team, and with the exciting external relationships we are building, helping others make their great games.”
“We have now signed three excellent developers already, and are close to signing more. Working together, we expect to start earning revenue in the next financial year,” he added.
The AIM-listed company is based in Cambridge and has over 400 employees.
Frontier Developments shares (LON: FDEV) surged 8% on Friday’s opening. They are currently trading +8.17% at 2,250.00 (1022GMT).
Pret to axe 2,800 roles as sales plunge
Pret has become the latest company to reveal a dramatic fall in sales amid the Coronavirus pandemic.
Sales 74% compared to the same period last year due to “shorter opening hours, lower transaction levels, and the losses faced by the business in 2020”.
As a result, Pret will be axing 2,800 jobs and permanently close 30 stores.
“I’m gutted that we’ve had to lose so many colleagues,” said Pano Christou, the group’s chief executive.
“Although we’re now starting to see a steady but slow recovery, the pandemic has taken away almost a decade of growth at Pret.
“We’ve managed to protect many jobs by making changes to the way we run our shops and the hours we ask team members to work.”
“I’m hopeful we’ll be able to review all these changes now that trade is improving again, and I’m encouraged by the improvements we’re seeing every week,” he added.
“We’ll soon be announcing a number of big changes to help bring Pret to more people.
“We’re grateful to the government for the support they’ve given our sector, and hope that support will continue as long as possible to give Pret time to adjust.”
Over 24,000 jobs in total have been lost on the high street in administration in the first half of 2020 alone.
The Hut Group plans £4.5bn listing
The Hut Group has revealed plans to float on the London Stock Exchange for £4.5bn.
The group owns beauty and fitness brands including the Lookfantasic beauty and Myprotein.
The Hut Group has grown substantially since the start of the year, with revenues rising 35.8% to £676m. Sales in 2019 grew to £1.1bn from £916m during 2018.
It was founded in 2004 and now employs over 7,000 people.
Matthew Moulding, founder and chief executive, said: “Our intention to float The Hut Group on the London Stock Exchange reflects the achievements of the past but also our strong belief in the significant potential for THG in the future.”
“THG has enjoyed strong growth since being founded in 2004, employing more than 7,000 people and establishing a track record of consistent delivery for our customers,” he added.
The company will plan to raise £920m through the sale, which could lead to a large payout of up to £700m in shares for Moulding.
Shares are likely to be listed and begin trading in mid-September.
Citi and JPMorgan are leading the IPO.
Onesavings Bank posts 14% fall in profits, shares rise
Onesavings Bank (LON: OSB) has reported a 14% fall in pre-tax profits for the six months to the end of June.
Compared to £182.2m profits for the first half of 2019, the challenger bank’s profits were hit amid the pandemic.
The group’s underlying net loan book grew by 2% to £18.5bn in the period.
Application volumes for products since the housing market reopened are currently approaching 60% of pre-lockdown levels on tighter lending criteria and higher pricing. Onesavings expects to deliver double-digit underlying net loan book growth for the full year.
Andy Golding, Onesavings Bank’s chief executive commented: “I am extremely proud of the way that OSB has performed during the COVID-19 pandemic. Our business model and systems have proved to be very resilient and our colleagues have all demonstrated dedication and flexibility, as they worked hard responding to the needs of our savers and borrowers.”
“It remains too early to say what the full impact of COVID-19 will be on the UK economy, nevertheless we will continue to be there for our customers, supporting them in the best way that we can. The foundations of our business remain extremely strong, with a very strong capital position and a prudent business model, all of which position us well to respond to the challenges and opportunities ahead and to continue to support our colleagues, customers and communities and deliver value to our shareholders over the long-term,” he added.
Shares in the group (LON: OSB) opened higher on Thursday morning. They are currently trading +16.65% at 304.00 (1408GMT).
Rolls Royce shares sink on record £5.4bn loss
Shares in engine maker Rolls Royce (LON:RR) sank on Thursday after the group reported a £5.4bn loss in the first half.
The destruction of demand for travel was the main driver behind the loss as the company was forced to write down assets and unveil an asset sale programme.
Rolls Royce shares were down over 8% shortly after midday on Thursday.
“We ended 2019 with good operational and financial momentum. However, the COVID-19 pandemic has significantly affected our 2020 performance, with an unprecedented impact on the civil aviation sector with flights grounded across the world,” said Warren East, Chief Executive of Rolls Royce.
“We have responded rapidly to increase our liquidity, with £6.1bn at the end of H1 and a further £2.0bn term loan agreed in H2, to help weather the continued uncertainty around the timing and shape of the recovery in the civil aviation sector.”
“We have made significant progress with our restructuring, which includes the largest reorganisation of our Civil Aerospace business in our history. This restructuring has caused us to take difficult decisions resulting in an unfortunate but necessary reduction in roles. These actions will significantly reduce our cost base, which combined with recovery in Power Systems and continued resilience in Defence, will help us to deliver significantly improved returns as the world recovers from the pandemic.”
“While our actions have helped to secure the Group’s immediate future, we recognise the material uncertainties resulting from COVID-19 and the need to rebuild our balance sheet for the longer term. We have identified a number of potential disposals that are expected to generate proceeds of more than £2bn, including ITP Aero and a number of other assets. Furthermore, in light of ongoing uncertainty in the civil aviation sector, we are continuing to assess additional options to strengthen our balance sheet to enable us to emerge from the pandemic well placed to capitalise on the long-term opportunities in all our markets.”
Flutter Entertainment shares rise despite 70% loss
Flutter Entertainment (LON: FLTR) profits fell 70% in the first half of the year amid the pandemic.
The owner of gambling firms Betfair and Paddy Power saw profits sink from £81m in 2019 to £24m in 2020 as most major sports events have been canceled.
Despite the fall in profits, Flutter Entertainment shares opened higher on Thursday morning as the group remained positive about the post-lockdown activity.
Flutter Entertainment is, however, remaining cautious for the second half of the year due to the uncertainty around Covid-19 related disruption and possible regulatory change across various markets.
Revenue at the group also jumped 49% to £1.52bn.
“The first half of 2020 has been defined by the outbreak of the global Covid-19 pandemic. For Flutter, my primary concern has been to keep our colleagues and customers safe,” said Peter Jackson, the group’s chief executive.
“I am proud of the support we have been able to provide to our employees during this challenging time and the additional safer gambling measures we have put in place to enhance player protection.
“The pandemic has been a highly unusual backdrop for completion of our combination with The Stars Group and I would like to take this opportunity to thank all of my colleagues across the enlarged Group for their hard work, commitment and resilience as we have combined to form one team,” he added.
Flutter Entertainment shares (LON: FLTR) rose 2% to 12,825p on Thursday and are currently trading +1.67% (0845GMT).
BMW to cut 400 jobs at Mini plant
BMW has announced plans to axe up to 400 jobs at the Mini plant in Oxford.
As the demand for cars has taken a hit and production at the site pausing throughout April, the group has said it will cut 400 of the 950 roles based at the plant.
Those affected will be told in mid-September.
“Like other automotive manufacturers, our volume forecasts for 2020 have had to change accordingly,” said Bob Shankly, the BMW Human Resources Director.
“We have, therefore, made the difficult decision to adjust our shift patterns at Mini Plant Oxford from October. This will give us the flexibility we need to adapt our production in the short to medium term, according to developments in global markets.
“Our decision has been made after close discussion with trade union representatives and we are aware that our plans will have an impact on people during an uncertain and worrying time.
“We have sought to protect as many jobs as we can, while also taking the necessary steps to ensure the stability of our business in light of this current period of volatile and unpredictable market conditions.”
Demand in UK sales may have slowly risen during July but total demand remains 41% for the year to date, according to the Society of Motor Manufacturers and Traders.
Rolls-Royce has also announced that it will close one of its plants, in a new cost-cutting drive to adapt to the fall in sales.