British Steel is reportedly at risk of collapsing into administration this week, as it looks to the government for a potential rescue. The UK’s second largest steel maker is hoping to secure £75 million from the government to avoid bankruptcy. The company has roughly 5,000 employees, predominately based in its Scunthorpe plant in North Lincolnshire. It is now awaiting a decision from the government, otherwise it is understood that administrators may be called in as soon as Wednesday. Should this happen, EY is expected to handle the wind down. British Steel already received a £100 million loan from the government back in April to cover a EU carbon bill. In a statement, the Department for Business, Energy and Industrial Strategy commented: “As the business department, we are in regular conversation with a wide range of companies.” If British Steel were to collapse it would prove a massive blow to the British steel industry, which is a central part of the UK’s manufacturing sector.

A bad day for British businesses?

Meanwhile in the retail and leisure sector, it was revealed today that Jamie Oliver’s restaurant chain is appointing administrators after failing to locate a buyer. The collapse of Oliver’s 25 restaurant locations places 1,000 jobs at risk.      

Jamie Oliver’s restaurant chain is set to fall into administration later today, placing 1,300 jobs at risk. The restaurant group, which operates 23 Jamie’s Italian locations, has been struggling to find buyer amid an increasingly difficult few years of trading. It is understood that KPMG will handle the administration process. Oliver’s Fifteen London and Barbecoa sites are also expected to be included in the procedure. Oliver said: “I am deeply saddened by this outcome and would like to thank all of the staff and our suppliers who have put their hearts and souls into this business for over a decade. I appreciate how difficult this is for everyone affected.

Shoe Zone reported its interim results for the six months to 30 March, with profits remaining flat. The high street shoe retailer reached revenues of £73 million, down from £73.7 million posted during the same period in 2018. Nevertheless, product gross margins increased to 62.0%, compared to 60.6% a year ago. Meanwhile, the company reported a profit before tax of £1 million, unchanged from a year ago. By the end of the period, Shoe Zone said it had funds of £3.3 million, down from £5.9 million the year before. The group also reported statutory earnings per share of 1.65p, falling from 1.70p. Shoe Zone also announced an interim dividend maintained at 3.5p per share. Nick Davis, Chief Executive of Shoe Zone, commented: “The first half of our financial year has been positive for the Group, trading in line with management’s expectations and achieving profitable revenue growth in our two key growth areas of Digital and Big Box. Our ongoing strategic focus continues to be on the Big Box roll out with a target of 45 stores by the end of December 2019. This is progressing to plan and we will be operating from 33 Big Box stores by the end of May.” Looking ahead, Mr Davis added: Trading momentum has continued into the second half, in line with market expectations. With our growth strategy in place, we believe we are favourably insulated against many of the structural sector issues and the Board continues to look to the future with confidence.” Shoe Zone (LON:SHOE) are currently trading down -5.73% as of 10:33AM (GMT).

Severn Trent (LON:SVT) posted its annual results on Tuesday in which it underscored its ongoing communication with the government concerning the future of the water sector. The water utility company, which posted a 4.2% increase in group turnover, said that the renationalisation of the water industry continues to remain a possibility in the event of a change of government. Severn Trent continued, underlining that any associated changes in government policy may ultimately affect its ability to deliver its strategic objectives, also having an impact on shareholder value. Leader of the Labour party, Jeremy Corbyn, said recently that water, electricity, gas and railway operators would be controlled by the state in the event that Labour comes into power. Severn Trent aims to ensure that the sector in England and Wales continues to deliver a top service for its customers. It aims to minimise any potential risks and maximise opportunities through regular communication and strong scenario planning alongside the evolution of government policy. “This has been a year where our teams have really stepped up, whether in response to customer needs in the face of one of the hottest and driest summers we’ve seen or by being named by Ofwat as one of the top companies in the sector when we received fast-track status for our future plans,” Liv Garfield, Chief Executive of Severn Trent commented. “At the heart of all of that is our drive to succeed for all of our stakeholders, which is shown in the results we’re announcing today. They demonstrate not only that we can deliver for our investors but also that we’re putting ourselves at the heart of the communities in which we live and work by building a lasting legacy for future generations,” the Chief Executive continued. In its results, Severn Trent revealed that it has maintained the lowest bills in England for ten years, aiming to project this to at least 2025. Profit for the year was up 6.8%. The company proposed a final dividend of 56.02p, in line with policy. The company remains on track to exceed its 50% renewable energy self-generation target, which has been boosted by the acquisition of Agrivert UK. In its half-year results, Severn Trent saw an increase in its half-year underlying profit by over 4%.

Ryanair (LON:RYA) revealed its annual results on Monday for its financial year to 31 March in which it posted a 29% fall in annual profits to €1.02 billion. Amounting to €1.02 billion, its profit after tax for the financial year is down from the €1.45 billion figure from the year prior. Founded in 1984 and headquartered in Dublin, the Irish low-cost airline has been battling with rising costs and overcapacity. “As previously guided, Ryanair (excl. Lauda) reports a full year after tax profit of €1.02bn. Short-haul capacity growth and the absence of Easter in Q4 led to a 6% fare decline, which stimulated 7% traffic growth to over 139m (142m guests incl. Lauda). Ancillary sales performed strongly up 19% to €2.4bn, which drove total revenue growth of 6% to €7.6bn,” Ryanair’s Michael O’Leary commented on the results. Ryanair also said that it has delayed the delivery of its first five Boeing 737-MAX aircrafts until Winter 2019. Delays in the delivery of the model, following its world wide grounding earlier this year, has caused Ryanair to cut capacity by roughly 1 million passengers – according to Reuters. Its outlook for 2020 remains cautious on pricing. The airline said that traffic will grow 8% to 153 million. Assuming a revenue per pax growth of 3%, the Irish airline is guiding a broadly flat group profits. It has stressed, however, that its guidance is largely dependent on close-in peak summer fares, H2 prices, the absence of security events, and no negative Brexit developments. Additionally, the low-cost airline said that it closed unprofitable bases in Bremen and Eindhoven, in addition to slashing aircraft numbers in Niederrhein, Hahn and the Canary Islands. It highlighted that its rivals such as Wizz, Lufthansa and EasyJet also announced the closure of bases in recent months. “We expect further consolidation and airline failures in winter 2019 and again into 2020 due to over-capacity, weaker fares, and higher oil prices particularly among those airlines who are significantly unhedged, or unable to hedge,” Ryanair said in its results. Germany’s largest airline Lufthansa (ETR:LHA) also posted disappointing results earlier last month. It revealed a deeper loss for its first-quarter citing higher fuel costs. EasyJet (LON:EZJ) warned just last week of its outlook in the second half of the financial year, pointing towards Brexit-related market uncertainty and economic fragility in Europe.

The Restaurant Group (LON:RTG) published a trading update ahead of the group’s annual general meeting on Friday. The casual dining restaurant operator said revealed that current trading remained ‘in line with our expectations’, with like-for-like sales up 2.8% for the 19 weeks ended 12 May. Total sales were up 57%, driven by the group’s recent £559 million acquisition of Wagamama as well as a record number of new pubs and concessions sites across the period. The company added: “We are comfortable with the performance in the first 19 weeks of the current financial year and remain focused on realising the synergies from the Wagamama acquisition, executing on our multi-pronged growth strategy and optimising our leisure business.” The company announced the departure of CEO Andy McCue in February, due to “extenuating personal circumstances”. They recently announced ex-HBOS boss Andy Hornby as his replacement. Alongside the newly acquired Wagamama chain, The Restaurant Group operates Garfunkel’s, Frankie & Benny’s, Chiquito and Brunning & Price. Shares in the FTSE 250 company are currently down -1.83% on the back of the trading update.  

Metro Bank (LON:MTRO) announced it has secured £375 million as a result of a share placing on Thursday. The high street challenger bank surpassed its original target of £350 million amid interest among both existing and new shareholders. The bank had been struggling in recent months after its share price lost 75% of its value since January amid an accounting error. Vernon Hill, Chairman and co-founder at Metro Bank commented on the successful capital raise: “I am really pleased with the support we have received from both existing and new shareholders, and for their confidence and belief in Metro Bank’s strategy. The Placing was significantly oversubscribed and as a consequence we raised a total of GBP375 million. Although we’ve faced challenges in the past few months, we remain fully focused on providing the outstanding service and convenience that our customers expect of us. This growth capital will enable us to continue to expand the business and implement our strategic initiatives.” The Bank of England’s Prudential Regulation Authority also welcomed the move, stating: “Metro Bank is profitable and continues to have adequate capital and liquidity to serve its current customer base,” “It has raised additional capital in order to fund future growth.” Shares in the troubled bank have plummeted this year amid concerns over its financial health. Last week rumours circulated over messaging app WhatsApp that the bank would become insolvent and that customers should remove their funds. The bank was then forced to dismiss the social media speculation after various customers turned up to branches to empty their accounts and safety deposits. This followed another blunder in January when the lender admitted that some commercial loans had been wrongly classified as posing less risk. Metro Bank was founded back in 2010 by Anthony Thomson and Vernon Hill. It is now a constituent of the FTSE 250 on the London Stock Exchange. Shares in the London-listed bank are currently +17.44% as of 11:06AM (GMT).

EasyJet warned on Friday of its outlook in the second half of its financial year, citing Brexit-related market uncertainty and economic fragility in Europe. The budget airline revealed in its results for the first half of the financial year that it expects revenue per seat at constant currency in the second half to be slightly down. According to EasyJet, this outcome has been driven by the continuous negative impact of Brexit-related market unpredictability in addition to the wider macroeconomic slowdown to hit Europe. EasyJet previously warned at the start of April of its financial performance in the second half of the year. It pointed towards Brexit uncertainty impacting consumer demand in the market. For the first six months of its financial year, passenger numbers increased by 4.9 million, up 13.3%. Additionally, EasyJet said that its headline loss before tax amounted to £275 million. It cited the impact of the Gatwick drones at the end of last year, which caused chaos just days before Christmas. This contributed to an increase in the airline’s headline cost per seat, which grew in total by 3.9% additionally driven by fuel price increases, the impact of foreign exchange and underlying cost inflation. “EasyJet has performed in line with expectations in the first half,” Johan Lundgren, EasyJet’s Chief Executive, commented on the results. “I am pleased that despite tougher trading conditions, we flew more than 41 million customers, up 13% on last year, performed well operationally with 54% fewer cancellations in the period and customer satisfaction with our crew is at an all-time high. We have also continued to make good progress on our strategic initiatives in holidays, loyalty, business and with data,” the Chief Executive continued. “Cost control remains a major priority for EasyJet. Our focus is on efficiency and on innovation through data and we are on track to deliver more than £100m in cost savings during 2019.” “We are well-equipped to succeed in this more difficult market through a number of short term customer and trading initiatives for the summer; measures to improve our operational resilience; and by focusing on what is most important to customers – value for money, punctuality and great customer service. All this is underpinned by a market leading balance sheet.” EasyJet is not the only airline to face difficulty lately. In fact, elsewhere in the industry, Cobalt airline suspended all operations and WOW air suspended all flights amid financial difficulties.