Hays Travel acquires Thomas Cook’s UK retail stores
Hays Travel agreed on Wednesday to acquire 555 Thomas Cook (LON:TCG) stores around Britain.
Indeed, the collapsed travel company’s entire UK retail estate will be purchased by Hays Travel.
The country’s largest independent travel agent will also provide re-employment opportunities to a “significant number” of Thomas Cook’s retail workers.
News emerged at the end of September that the British global travel group, Thomas Cook, had collapsed, leaving thousands of British holiday makers stranded abroad.
Many took to Twitter to share their thoughts to customers stranded abroad and Thomas Cook staff.
The Civil Aviation Authority said that it will launch a new process for what is set to be the largest ever ATOL refund programme for Thomas Cook customers.
Hays Travel said in a statement that up to 2,500 jobs at the collapsed travel company could be saved as a result of the deal.
“This is an extremely positive outcome, and we are delighted to have secured this agreement,” Jim Tucker, Partner at KPMG and Joint Special Manager of Thomas Cook’s Retail division, commented on the deal.
“It provides re-employment opportunities for a significant number of former Thomas Cook employees, and secures the future of retail sites up and down the UK high street,” Jim Tucker continued.
“We are pleased to have achieved this in a short time frame and in the context of a complex liquidation process, which is testament to a lot of hard work from a number of parties.”
“Over the weeks ahead, we will work closely with Hays Travel and landlords to ensure a smooth transition of the store estate.”
David Chapman, Official Receiver, added that “I am pleased to announce we have reached an agreement with Hays Travel to acquire Thomas Cook’s entire UK retail estate, comprising 555 stores across the country”.
“This represents an important step in the liquidation process, as we seek to realise the company’s assets.”
Consumer demand for new homes falls as Brexit uncertainty weighs
Consumer demand for new homes dropped by 8% over the last year, new data on Wednesday revealed.
The Federation of Master Builders’ House Builders’ Survey showed that consumer demand for new homes fell to its lowest level since 2013.
The report found that 48% of small house builders blame the fall in buyer demand on a lack of consumer confidence.
Indeed, Chief Executive of the Federation of Master Builders, Brian Berry, said that Brexit uncertainty was weighing on consumer confidence.
“Small house builders are starting to see the effects of Brexit uncertainty taking its toll on consumer confidence,” the Chief Executive said.
“Many prospective homeowners are clearly holding off buying until there is more political and economic certainty,” the Chief Executive continued.
“Hopefully this is just a short-term pause, and that post-Brexit, demand will pick up once again. If not, and we enter a downturn period, the Government will need to consider how best to support SME house builders to avoid many firms leaving the sector.”
Indeed, as the nation has entered the final month of the Brexit deadline, the only certainty that prevails is additional uncertainty.
In other sectors, the UK new car market was also hit by Brexit uncertainty as it similarly weighed on consumer confidence – new data revealed earlier in October that the new car market declined in the first nine months of the year.
The Chief Executive of the Federation of Master Builders continued to add that “the main barriers facing small house builders have started to ease but they are still present”.
“This is the fifth consecutive year that small house builders have cited lack of access to available and viable land as the number one barrier. Small sites are the bread and butter of SME development, but unfortunately local authorities’ Local Plans are still far too focused on large sites.”
JLEN renewable infrastructure leads the way in making the ethical profitable
You’d have to be living under a rock, or some other equally weighty and soundproof implement, to not be aware of climate activist Greta Thunberg and the uproar caused by the unshakeable extinction rebellion. Greta laments elites and corporations alike, for focusing wholly on myopic ‘economic growth’ without any concern for the long-term implications of quarterly profit maximization. And to some extent she’s right to do so. Regardless of whether you like her message (or indeed her presentation), she highlights a wider structural inability within modern society: to reconcile market interests and socio-political obligations. A plethora of approaches have been offered to address this dilemma, the bulk of which focus either on adjusting consumer habits or government regulation – both of which are at worst untenable and at best disruptive. Alternatively, some companies have taken it upon themselves to act as the engines for change, though this has more often-than-not boiled down to little more than symbolic or shallow fads to peddle their respective marketing narratives. The subject of this article – JLEN (LON: JLEN) – provides a means of ameliorating short-term economic gain and larger-picture thinking, with a business model that makes the ethical, profitable.
With such a forthright opening, it’s only right I try to qualify my claims by sharing what I’ve learned. Some weeks back I had the pleasure of speaking to Chris Tanner and Chris Holmes, both of whom are involved with JLEN in an investment advisory capacity. In the most concise manner possible, Tanner told me the Company is,
“A diversified environmental infrastructure fund.”
They invest in an assorted portfolio of environmental infrastructure assets, which currently include; onshore wind, solar, waste management and waste water, run-of-river hydro (with co-located battery) and anaerobic digestion assets. I stress that ‘currently’ is the optimum word. Not only because JLEN has continued its efforts to branch out with recent acquisitions in the two latter-mentioned sectors, but because the Company have said further diversification is within its remit.
Diversification is key
This theme of diversity is something of a motif, not only within JLEN’s portfolio, but within its business model. I could repeat the word one hundred times over and I still wouldn’t be able to emulate the enthusiasm Tanner and Holmes conveyed in regard to this approach. Setting out the Company’s strategy, Tanner stated, “diversification means no one risk predominates. It gives us a good spread of risks. We have a high level of fixed price index linked revenues, and that in turn underpins our dividend.” With a view to continue the variation of their portfolio in future, the Company are currently excited about the potential returns of their anaerobic digestion offerings, including their recent Warren acquisition. “We think it offers a very good risk-return profile and a good opportunity to enhance the value of those assets,” said Holmes. He continued, “Where we can, we’d like to pick up some more assets in that sector. But we think there are other asset classes out there, for example biomass and energy from waste, that are of interest to us.” Already, then, while lauding the potential of their recently expanded anaerobic digestion offerings, the Company are already contemplating a presence in sectors such as biomass. Tanner explained that this asset class could prove favourable, not only on account of its straightforwardness and subsidy backing, but also the fact that JLEN has the opportunity to access the developed biomass assets listed on a first offer agreement it has with John Laing – all factors which combine to make this sector an ‘exciting investment opportunity’. Further, when asked about whether the Company would entertain an expansion into geothermal energy, Tanner stated that it was “within mandate”, but that JLEN is ultimately focused on expanding into what it deemed to be tried and tested asset classes. Geothermal energy will have to gain scale and post some encouraging yields before enticing this Company, then. After all, maximising the return on not-yet-commercial assets by spreading your risk base, only works if you don’t buy haphazardly into risky assets. Tanner summarised it perfectly, “We aim to be ‘steady as she goes’, which is why we invest in assets with a track record […] and support the dividend promise which is still a major feature for our investors.” Going forwards, the Company will explore more options following its change of financial advisor, to Foresight, earlier in the year. Additionally, it will look to involve itself more heavily outside of the UK, with a pipeline of potential assets amounting to around £200 million, with this predominantly being made up of wind assets.Dividends and risks
Alongside its asset strategy, one of JLEN’s major selling points is its inviting income potential. Due to the quality of its assets, the Company was able to pay a full-year dividend of 6.51p with a current cover of 1.2. This is forecast to increase to 6.66p for the full-year 2019/2020, which would represent a generous yield of around 5.60%. The Company identified one of the main risks posed to it fulfilling this target as being, like any energy-focused actor, their exposure to wholesale power prices. The fact that JLEN relies upon renewables appears more of a virtue than a vice, at least in the short term. On the one hand, Tanner pointed out, “Low wind speeds, low solar radiation, lower crop yields. These are all things that have an impact,” however, he went on to say that, “because we’re diversified, we’re not overly exposed to any one of these risks.” Further, their diversity means that they’re not left quite as stranded by volatile power prices, as some of their energy counterparts. For instance, Tanner pointed out that their anaerobic digestion assets’ revenues are largely made up of subsidies and feed-in-tariffs. Thus, aside from having different asset classes making money, the Company somewhat shields itself from volatility by having revenue streams coming from different sources. What is even more interesting though – and surprising given that “less than 1%” of its assets are overseas – is that that JLEN isn’t particularly fazed by the UK’s current diplomatic situation. In fact, Tanner said, “We don’t see any first order issues from Brexit, particularly from a disorderly Brexit. As a second order issue, we can speculate that if Brexit had a strong impact upon FX rates and the Sterling depreciated, you may see that come through in higher UK domestic electricity prices. Because the margin generator (the price setter) does tend to be gas, and gas is imported either in Euros or dollars, that may actually be a positive for funds like ourselves with UK-generating assets. That’s the main risk out there at the moment and it’s not one we see as particularly negative for us.” So, without being cynical and shorting the failure of other companies or the market itself, JLEN still sees Brexit as an opportunity. Can it get any better?Environmental and social added value
Actually, yes. Aside from offering what its track record shows as a consistent source of income, JLEN goes one step further by adding value to wider society, in the form of the social and environmental impacts of their operations. The Company predicted that each year, their assets produce an estimated 520 GWh of energy, which is equivalent to some 140,000 homes having their electricity and heading needs fulfilled. What this level of renewables implementation means in terms of emissions, is an avoidance of 370 kilotons of CO2 equivalent from being created, which equates to the effect of having 170,000 cars taken off the road. If that wasn’t enough – and demonstrative of the Company’s commitment to environmental ends – JLEN buys UK woodland tree planting carbon credits in order to offset the carbon emissions from all flights between their headquarters in Guernsey and their offices in London. Now, while a renewables infrastructure company lauding its eco-friendly merits may not seem too unsurprising, the Company’s commitment to social surplus should be applauded. Going beyond the mutualised business structure of old, where all parties involved would have a say and a stake in the business, JLEN commits to putting money back into the communities where it has a presence. In the full-year 2018/2019 alone, the Company delivered £350,000 worth of funding to local communities. This manifested near one of its anaerobic digestion sites, as heating units for residential care homes and funding for scout equipment. Near one of its wind assets, this materialised as a much-needed extension to the village hall and a refurbishment of local sports facilities. If by this point, you’re thinking JLEN offers a model for business conduct which should act as a benchmark for all those that follow, I would be hard-pressed to disagree. It’s almost alien to the senses to think something profitable can also be (for want of a better word) so wholesome, but the Company are fully aware that what they offer is something to be excited about. “For some people it is absolutely not enough just to say ‘this is a good financial investment’. They want to know what the impact is and whether their money is ultimately being channelled into something that’s doing good” Tanner told us. In turn, you could say the Company acts as an ideal case study for ethical investment. For those shying away from trading on the basis of moral queries, JLEN could offer the perfect solution. You know your investment is not only going to make money, but that it will help further the worthwhile causes the Company is committed to supporting.Renewables gaining scale
Aside from further expansion and hopefully more of the same, what does the future hold for companies such as JLEN, and will renewables surpass oil? “Its difficult to comment on oil per se” responded Holmes, “I think what we can talk about is government aspirations – the most recent one being net zero by 2050 – which in itself requires a huge expansion in the amount of renewable generation that’s on the system at the moment.” “The obvious place for that in terms of the scale required would be offshore wind, and you can see that already taking place with further tender rounds being released and the size and the scale of those assets would help to bridge some of that gap.” “I think the desire to get to that net zero target will stem the tide of renewables being rolled out.” The company think the likelihood of listed pure play renewable funds becoming more commonplace in the near future, is dependent upon the speed and scale at which unsubsidised wind and solar ventures become investable. Tanner added that this is already the case in some places in the UK, and that the question then becomes – will it only become investable in certain, very specific locations (in positions with high wind speed, an industrial user close to the site)? For now, though, we wish JLEN every success going forwards, as it treads the path which many of its counterparts could do little better than to follow. The Company has provided a means of tackling contemporary dilemmas in a way that is profitable, and can only wait as everyone else catches up. Elsewhere, there have been renewable energy updates from; Scottish government policy, Active Energy Group PLC (LON: AEG), Velocys PLC (LON: VLS), AFC Energy plc (LON: AFC), John Laing Environmental Assets Group Ltd PLC (LON: JLEN), SIMEC Atlantis Energy (LON: SAE), Aquila European Renewables Income Fund (LON: AERI), PowerHouse Energy Group (LON: PHE) and SIMEC Atlantis Energy (LON: SAE).The Scottish government should lean towards renewables to power prosperity
Scotland is currently a shining example of a clean energy policy taken seriously. By 2016 it had completely outstripped England, with almost 86% of its electricity coming from clean sources (renewable and nuclear – both around 43% apiece), compared to under 44% in England, and 25% or lower in Northern Ireland and Wales. By 2018, it was producing 26,408 GWh of renewable energy, which comprised 74% of its total electricity demand. Based on that trajectory, Scotland is well on track to fulfil its promise of achieving 100% renewable sufficiency for its electricity supply, by 2020.
Aside from the inevitable challenges it will face, and the coinciding criticism, the efforts of the SNP government should be lauded, and should act as an example upon which other Western countries should model themselves.
Why is renewable energy dependence desirable?
While it wouldn’t appear prudent to largely ignore the ecological and environmental merits of renewables, I’ll do so in this case largely because these considerations are well-documented. What I think is equally, or even more valuable, is the fact that renewables offer Scotland greater agency. While Scotland enjoyed some of the spoils of the 1980s North Sea oil discovery, the benefits offered by renewables go beyond short-term financial gain. First and foremost, what renewables offer are an inexhaustible source of energy. While critics would argue that the reliability of supply from renewables is dubious, I’d wager that fossil fuels aren’t – and won’t be – any better. On a political level, what renewables offer is energy sovereignty. While most of Europe will quake in their boots the next time Vladimir Putin gleefully chokes Europe’s supply of natural gas, Scotland will thank its government for having some foresight. On a societal level, steady reliance and investment into renewables offers scope not only for steadier energy prices but a demand for more engineers – or put more plainly, job opportunities.What more can be done?
Reframe perceptions of the development of renewable energy, so that they’re understood as profitable as well as ethical. This will take some remodelling of the Scottish government’s understanding of itself, and that the profit that can be extracted from renewables needn’t only be enjoyed by private entities. Its no accident that 28.9% of renewable energy generated in Scotland in 2015 was exported, or that renewable infrastructure asset management companies are appearing with increased prevalence. What Scotland should aim to do going forwards is realise it shouldn’t only rely on renewables for energy procurement, but understand the business potential of fostering growth in the renewables industry. Indeed, having a relatively stable and self-sufficient supply of energy is beneficial for Scotland’s own citizens, but there is also money to be made from creating and exporting surplus energy to more myopic countries, who do not protect themselves against fossil fuel volatility during times of uncertainty. This isn’t a ludicrous notion, as stated by JLEN financial advisor Chris Tanner when discussing the threat posed by Brexit, “As a second order issue, we can speculate that if Brexit had a strong impact upon FX rates and the Sterling depreciated, you may see that come through in higher UK domestic electricity prices. Because the margin generator (the price setter) does tend to be gas, and gas is imported either in Euros or dollars, that may actually be a positive for funds like ourselves with UK-generating [renewable energy] assets. That’s the main risk out there at the moment and it’s not one we see as particularly negative for us.” Apart from the financial potential of selling the power produced by renewables, I see two further benefits. First, the government should consider the opportunities offered by the renewable asset management fund structure. It could either buy up large shareholdings in renewables infrastructure groups, which would not only bolster the spending power of these groups to invest in more renewable asset classes (and thus increase the supply of renewable energy) and increase their social surplus (as seen with JLEN’s community spending commitments and apprenticeships) but also provide a steady recoup of money from the attractive income offered by renewable asset management companies such as JLEN. Alternatively, the government could set up its own fund, financed by fiscal resources. Aside from the increased efficiency a fund structure would aim to ensure to maximize profit, a large-scale government-backed fund could be used to educate the general populace on renewables and asset management. In turn, investment could not only be made more accessible to Scottish citizens, but each taxpayer could receive a holding in the fund proportionate to their tax contribution. Subsequently, they will receive cashback in the form of income paid as dividends on their respective share holdings, and the fund will be publicly accountable and mutualised. While these proposals may seem somewhat farfetched or logistically exhaustive, what they would offer is a profitable, ethical and publicly owned asset management structure. It may be too good to be true, for now at least. Addressing the North Sea shaped elephant in the room, renewables could offer the SNP a get-out-clause for what many argued was a red herring, in regard to what they lauded as the fountain of gold that is (maybe was) North Sea oil. Regardless of which claims about North Sea oil are true, a commitment to renewables could offer the Scottish Nationalist narrative a new lease of life, or at the very least a new layer. Scottish economic viability – and in turn any chance the SNP has of achieving Independence – may not hinge on spurious claims over oil reserves. Further, should renewables ever gain such scale they act as one of Scotland’s primary exports, it would allow them to ‘bank’ oil reserves and Shetland gas reserves, and not sell them out of necessity for whatever happens to be the going rate at the time. Ultimately, what I have offered in this article is a highly political and romanticised perspective on the potential of renewables in Scotland. The bottom line is, they have a highly educated youth from three Russell Group universities, the growing Silicone Glen technology corridor between its two major cities and a wealth of open land. Scotland has never been able to replicate the success of pre-1980s manufacturing and its financial services offerings will never be able to compete with London: why isn’t a comparative advantage in commercial renewables a good place for it to start looking for a more prosperous future? Elsewhere, there have been renewable energy updates from; Kaiserwetter, Active Energy Group PLC (LON: AEG), Velocys PLC (LON: VLS), AFC Energy plc (LON: AFC), John Laing Environmental Assets Group Ltd PLC (LON: JLEN), SIMEC Atlantis Energy (LON: SAE), Aquila European Renewables Income Fund (LON: AERI), PowerHouse Energy Group (LON: PHE) and SIMEC Atlantis Energy (LON: SAE).
UK new car market declines, Brexit uncertainty weighs
New data revealed on Friday that the UK new car market declined in the first nine months of the year as Brexit uncertainty weighs on consumer confidence.
Figures from the Society of Motor Manufacturers & Traders show that the new car market declined by 2.5% over the first three quarters of the year.
Registrations in the month of September increased by only 1.3% to 343,255 new vehicles.
September’s yearly growth comes after a significant decline of 20.5% for the same month in 2018 as “new emissions regulations and lack of testing capacity across Europe affected supply,” the Society of Motor Manufacturers & Traders said.
“September’s modest growth belies the ongoing downward trend we’ve seen over the past 30 months,” Mike Hawes, the Society of Motor Manufacturers & Traders’ Chief Executive, commented on the data.
“We expected to see a more significant increase in September, similar to those seen in France, Germany, Italy and Spain, given the negative effect WLTP had on all European markets last year,” Mike Hawes continued.
“Instead, consumer confidence is being undermined by political and economic uncertainty.”
Indeed, as the nation has now entered the month of the Brexit deadline, uncertainty prevails.
The BBC reported today the the European Union is “open but not convinced” by Boris Johnson’s new plans for a departure deal with the EU.
“We need to restore stability to the market which means avoiding a ‘no deal’ Brexit and, moreover, agreeing a future relationship with the EU that avoids tariffs and barriers that could increase prices and reduce buyer choice,” the Society of Motor Manufacturers & Traders’ Chief Executive said.
Many outside of the automobile sector have also warned against the a no deal Brexit. Indeed, at the end of September it was reported that many small business in the UK have either not prepared or are unable to prepare for a no deal scenario.
As for UK retail, household name John Lewis also warned against a no deal as it believes the scenario will have a “significant” impact on the business.
Female entrepreneurs experience highest levels of gender bias
Female entrepreneurs in the UK experience the highest levels of gender bias across the globe, according to the latest data.
New research by HSBC Private Banking revealed that half of female entrepreneurs in the UK experience bias based on their gender when raising capital for their business.
According to the research, the gender bias emerges when female entrepreneurs are asked questions about their family circumstances during the investment process.
Female entrepreneurs must also face questions concerning their credibility as business leaders and loss prevention.
The UK is home to the nation in which female entrepreneurs experience the most gender bias at 54%, with the USA coming in second at 46%.
Data from the Federation of Small Businesses revealed last year that businesses owned and led by women contribute £221 billion to the nation’s economy.
Despite this, women still face obstacles when raising capital. Indeed, 70% of UK female entrepreneurs find raising capital the most difficult part of the process.
Meanwhile, 53% of female founders are denied funding. Even in the cases that funding is secured, women receive 6% less than men.
Last year, the UK government announced that it will launch a review into the barriers female entrepreneurs face, assessing the obstacles impeding women from establishing their own business.
“It is concerning that half of female entrepreneurs in this country have experienced bias when trying to raise capital for their businesses,” Kirsty Moore, Managing Director at HSBC UK Private Banking in the UK, commented on the research.
“HSBC Private Banking has been working with entrepreneurs in the UK for decades, but this research shows how far we have to go to level the playing field for women to fulfil their ambitions,” Kirsty Moore continued.
Victoria Peppiatt, UK entrepreneur and co-founder of Phrasee, added that “it’s important that institutions with the capacity to bring about change, like HSBC, continue to highlight these issues and draw attention to the ways in which gender bias can be overcome.”
“Mixed panels, more access to networking opportunities and a commitment from investors to review their investment choices are just some of the ways we can achieve more parity.”
As for gender equality in the world of work, the Guardian reported earlier this year that only six countries in the world give women and men equal legal working rights.
Shares in HSBC Holdings plc (LON:HSBA) were trading at -0.48% as of 09:43 BST Friday.
Tower Resources pursues joint venture with undisclosed oil major
Oil and gas exploration and development company Tower Resources has seen its share price rally on Thursday, following its announcement that it had begun discussions for potential co-operation on a joint venture.
The Company stated that it had given technical and commercial information to an ‘international oil company’ with a view to spark discussions of a potential joint venture.
The announcement follows preliminary discussions held earlier in the year, and is focused on prospective co-operation on Tower Resources’ Namibian Blocks venture.
Tower Resources comments
Jeremy Asher, CEO, stated,
“This process is at a very early stage, and may not lead to any agreement. However, it does provide a timely reminder that, in addition to our Cameroon appraisal and development project, the Company has two extremely attractive exploration opportunities in Namibia and South Africa.”
“Our Namibian Blocks, in which we have an 80% interest as operator, include two giant four-way dip closures in the West and four large structures in the Dolphin Graben where the 1994 Norsk Hydro well 1911/15-1 encountered three source rock intervals, and recovered oil from Albian carbonate core samples.”
“Our Algoa-Gamtoos license in South Africa, operated by NewAge, where our interest is 50%, adjoins Total’s license where it made its recent 1-billion boe Brulpadda gas-condensate discovery in the Outeniqua basin, and that Algoa-Gamtoos license includes a 364 million boe prospect identified by NewAge in the same Outeniqua basin.”