Tate and Lyle reaches sale agreement of American subsidiary
Tate and Lyle has reached agreement with KPS Capital Partners for the sale of its remaining stake in Primient, an American subsidiary of Tate and Lyle.
The firm said after the sale of its near 50 per cent stake, net cash proceeds, after tax and transactions costs, are expected to be around $270m (£215m).
The transaction completes the staged exit from Primient ahead of expiry of the original lock-up period of eight years which lasts until April 2030.
Nick Hampton, chief executive at Tate and Lyle, said: “I am delighted that we have reached agreement with KPS for the sale of our remaining stake in Primient well ahead of the original lock-up period.
“This is testament to the relationships we have built with KPS and Primient, and the robust framework for the separation of Primient established two years ago.”
He added:“With this sale, the transformation of Tate & Lyle into a fully-focused speciality food and beverage solutions business is complete.
“We are now well-positioned to capture the significant growth opportunities ahead as we look to provide our customers with the solutions they need to meet growing consumer demand for healthier, tastier and more sustainable food and drink.”
It comes as the firm announced its final year results in the year ending March 2024.
Revenue at the firm was down two per cent to £1.6bn, but adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew eight per cent to £218m.
The London-listed company has faced pressures from rising cost inflation which resulted in lower revenue as it looked to pass through costs to customers.
Tate and Lyle said this is expected to continue in the first half of the 2025 financial year.
Hampton added: “In challenging market conditions, it’s been another year of robust financial performance and strategic progress, with strong profit growth and productivity delivery, excellent cash generation, and further progress to transform the business.
“The actions taken over the last six years have created a higher quality and more resilient business, with the agility to navigate the challenging economic environment and softer consumer demand we saw last year. “
“While managing these short-term market dynamics, we also continued to set up the business for long-term growth by increasing investment in technology, innovation, solution selling and new capacity, and by intentionally moving away from low margin business. I am particularly pleased by our progress building our solutions business with customers, a core element of our strategy, with solutions new business wins continuing to grow.”
Pressure on as competition watchdog launches investigation into UK vet industry
The competition watchdog said it would press ahead with an investigation into the UK’s vet industry following concerns pet owners are not getting value for money.
On Thursday, the Competition and Markets Authority (CMA) announced plans to launch a market investigation after the review it undertook last September.
The review, which prompted over 56,000 responses from the public and vet industry, raised concerns about how animal care clinics are being run throughout the UK.
This included fears that owners are being overcharged for medicines and how a rise in larger groups taking over smaller practices may have reduced competition in the market.
In 2013, around 10 per cent of vet practices belonged to large groups, but that share is now almost 60 per cent.
Sarah Cardell, chief executive of the CMA, said the message from vets work so far has been “loud and clear”.
“We’ve heard from people who are struggling to pay vet bills, potentially overpaying for medicines and don’t always know the best treatment options available to them.
“We also remain concerned about the potential impact of sector consolidation and the incentives for large, integrated vet groups to act in ways which reduce consumer choice.”
She added: “In March we proposed that a formal market investigation was the best route to fully explore these concerns and, if appropriate, take direct action to address them. That proposal has been overwhelmingly endorsed through our consultation.”
“While we’re aware of acute staff shortages and difficult working conditions for vets, we consider a formal market investigation is essential to ensure good outcomes for the millions of pet owners in the UK as well as professionals working in the sector.”
The CMA has now offered tips for pet owners to navigate pet services better. These include travelling away from the closest vet clinic to get a cheaper service and buying medication elsewhere.
More pressure for top vet clinics
The investigation will place further pressure on the top dogs in the UK veterinary sector,
They said: “CVS has a clear strategy with its purpose to give the best possible care to animals and its vision to be the veterinary company people most want to work for. The Group is proud of the dedication and commitment of its colleagues in providing great care to its clients and their animals.
“CVS launched a new clinical governance framework in November 2023 as an industry first in the UK veterinary sector.
It added: “This clinical governance framework places contextualised care at the heart of the Group’s approach to providing clients and their pets with appropriate care. This focus is neatly reflected in the Group’s approach to understanding client needs under the mantra of “what matters to you, matters to us”.
GPE to raise £350m to invest in London’s ‘attractive’ commercial property market
One of the capital’s biggest landlords, GPE has launched a rights issue to raise approximately £350m to invest in new properties across London.
The rights issue announcement came alongside the company’s full-year results and the announcement that it has swapped a property with the City of London Corporation.
The firm announced the launch of a fully underwritten three-for-five rights issue to raise gross proceeds of approximately £350m – £336m net of expenses – through the issue of 152m new Shares at a price of 230 pence each.
A Rights Issue is where existing shareholders are given the opportunity to buy a set number of new shares in the company they own.
GPE added: “Higher interest rates have disrupted the commercial property investment market, creating significant near-to medium-term acquisition opportunities in central London with values approaching their trough and assets trading broadly in line with 2009 real capital value levels”.
The fundraising comes as demand for the group’s office spaces across London has continued to return to pre-pandemic levels.
Moreover, the London office market has become more competitive due to a shortfall in high-quality office space.
After the pandemic, tenants have become increasingly picky and tend to favour best-in-class buildings with less space due to work-from-home practices.
GPE intends to use £168m of the proceeds from the Rights Issue to commit to capex for its Soho Square Estate and a new development, The Courtyard.
This will take total capex on committed GPE schemes from £498m to £666m.
The Courtyard is a new deal, acquired via a property swap with the City of London Corporation. GPE swapped its interest in 95/96 New Bond Street, W1 for £18.2m while simultaneously acquiring the long leasehold interest at The Courtyard, 1/3 Alfred Place, WC1 for £28.6m.
GPE will seek to deploy the remainder of the proceeds in new acquisitions over the next 12-18 months, subject to market conditions.
Analysts at Barclays said: “GPE raising equity to fund its developments is a strong signal given to the market that the London office market might have found a trough in values and opportunities to acquire and create value (which is their business model) are emerging, as the company has become a net buyer for the first time since 2013.”
Separately, GPE announced its final year results for the year ending March.
The company signed £22.5m worth of leases, which were booked at 9.1 per cent above last year’s estimated rental value (ERV).
The company reported an overall vacancy rate of 1.3 per cent. The value of its portfolio dropped 12.1 per cent in the year to £2.3bn.
Toby Courtauld, chief executive of GPE, said: “We are pleased to report on another year of strong operational performance.
“Our appealing blend of best in class HQ offices and Fully Managed Flex spaces, all in central London’s undersupplied markets, is proving attractive to customers, enabling us to beat the valuer’s ERV estimates by 9.1 per cent on all signed leases, the highest margin since 2012, and by 11.1 per cent across our office lettings.
He added: “Today, our portfolio is effectively full and, having delivered ERV growth towards the top end of last year’s guidance, we have upgraded our forecast for this year to five per cent to 10 per cent for our prime offices.”
Election 2024: Rishi Sunak will get his hearing. Does he have anything to say?
This election is a chance for Rishi Sunak to grab the nation’s ear. But he’ll have to say something more compelling than he’s managed so far to keep Britain’s attention.
The best that can be said for Rishi Sunak’s speech outside 10 Downing Street yesterday is that unlike his predecessor but two, Theresa May, the stage didn’t fall down. Standing sodden in the rain, looking every bit the wally without a brolly, he looked a man who knew he was facing the fight of his life – and who didn’t feel as if the gods were on his side.
In truth, he had to take the plunge at some point, though perhaps he could have done so inside. There was a quite compelling working theory that the Tories were content to hang around for a while longer, hoping that something might turn up.
With tax cuts effectively wiped out as an option by borrowing figures and a warning from the IMF that an autumn fiscal event could sent the markets into a Trussian frenzy again, the best they could do was some not-quite-brilliant inflation numbers. May as well, eh.
Yet for all of the well-founded frustrations with the Conservative party, they do still have a real shot in this election. No matter how tired the country might be, the election gives you a hearing. Will Rishi Sunak have something to say?
There is a sense, sometimes, that we still don’t really know who the Prime Minister is. Instinctively, he doesn’t seem like a man who enjoyed lockdown; nor a man who is wholly comfortable with the Rwanda scheme, or some of the more culture war tactics his party have employed in recent years.
He looks more comfortable talking about tech, about a twenty-first century Britain that’s on the front foot. Can that optimism turn around his poll ratings? An election is a moment for sunlit uplands. We aren’t convinced, but then, the negativity certainly won’t.
For Keir Starmer, the challenge is different: hold on. Stay solid. Show the country that there’s a leader as well as a technocrat, a Prime Minister not just a critic.
There will be days when the polls narrow, and widen. There will be over-reactions. There will be days that feel important that aren’t and days that are important that don’t feel it. Let battle commence.
Natwest share sale shelved as election brings government to a halt
The government’s much touted retail sale of Natwest shares has been derailed by Rishi Sunak’s move to call a snap election, City AM understands.
Ministers had been gearing up to offload a chunk of the government’s remaining stake in Natwest to retail investors this summer, in plans confirmed by Jeremy Hunt in his March budget.
However, those plans have now been put on ice after the prime minister announced the country would head to the polls in July, Treasury sources confirmed with City A.M.
Sky News’ Mark Kleinman first reported the news.
The government had been hoping to ignite a culture of retail investment in the UK by conducting a mass sale of the shares to the general public this summer.
In their promotion of the share sale, the chancellor and City minister had likened the move to the Thatcher-era ‘Tell Sid’ advertising campaign used to drum up interest in the privatisation of British Gas.
“It’s time to get Sid investing again,” the chancellor Jeremy Hunt said last year, referencing the state backed share-ownership campaign under Thatcher in the 80s.
Those plans had already been thrown into doubt however after the government hit pause on a bidding process in March.
The government has held a stake in Natwest since rescuing the bank during the financial crisis. Over the past few months the government has been gradually feeding its stake back into the market
The move to pause the sale comes as ministers reportedly prepare to either abandon or rush through scores of bills through parliaments ahead of the election.
Election 2024: No party has ever come back from this far behind – but anything can happen
Rishi Sunak has clearly decided that the risks of waiting outweigh the dangers of calling a general election when the polls are so dire, says Henry Hill
There was a case, despite the state of the polls, for Rishi Sunak calling an early election. From the Conservative Party’s perspective, going to the country in May (to coincide with the locals) made a lot of sense.
It would lift turnout, hopefully amongst disaffected Tory voters who aren’t going to vote for anyone else but were not sufficiently motivated to join the civic-minded minority who cast their ballots in local elections. In large parts of the country the party would have been out in force, fighting for their own positions in town halls.
Once the window of opportunity for such an election closed, it seemed all but settled that the Prime Minister would go to the country in the autumn: pass his two-year anniversary in the job; hold another fiscal event loaded with pre-election goodies; hope some good news turned up.
But there isn’t an obvious case for calling an election now, specifically. Yes, the most recent inflation announcement is good news – but it will take time for the benefits to be felt by voters, especially homeowners with mortgages who have been feeling the squeeze.
Likewise, the passing of the Safety of Rwanda Bill is a victory of sorts for the Prime Minister and his team, but such procedural wrangling does not quicken the electorate’s pulse – and no plane has yet taken off.
So what’s happened? The most likely answer is simply that Sunak and his advisers have looked at the next six months and decided that the risks of waiting outweighed any possible advantage.
Perhaps they’re right. The summer will see the annual surge in Channel crossings; it’s only a matter of time before one of the prisoners ministers have released early to free up prison spaces re-offends. Developments in Ukraine, the Red Sea, or another global flashpoint could shock the world economy.
Even so, this is an extraordinary moment. When Theresa May called a snap election in 2017, she was at least 20 points ahead in the polls; the Government, by contrast, is 20 points behind. That’s the sort of margin where first past the post starts doing very strange things; Tory MPs sitting on what ought historically to be comfortable majorities have just been plunged into the fight of their lives.
There’s nothing they can do about it, though. There has been some fevered speculation (when is there not?) that MPs might be sending letters in to Sir Graham Brady to try and trigger a leadership contest. But the Conservative Party’s internal procedures do not trump the Prime Minister’s constitutional prerogatives; all a leadership challenge would do is disembowel whatever election campaign CCHQ can put together.
A few weeks is a long time in politics, of course. Maybe better economic conditions (and nicer weather) will lift the mood of the voters. But there is no precedent for a party coming back from a polling deficit on this scale.
May threw one way in 2017, but that is much easier to do from government than from opposition. It’s difficult to imagine the sort of self-inflicted wound that could cost Sir Keir Starmer the keys to Downing Street at this point.
Regardless, it is done. Perhaps the white heat of the campaign will unite Sunak’s divided party and let the Government go down swinging, rather than bleeding out from a thousand cuts over the next six months.
Election 2024: Is Keir Starmer ready for government?
If the pledge card Keir Starmer launched last week is anything to go by, the still doesn’t know what it will actually deliver if it gets elected, says Will Cooling
Last week Sir Keir Starmer put Labour’s election campaign on a new footing when he launched his pledge card. This attracted groans, as many commentators rushed to point out that Tony Blair’s famous pledge card played little role in securing New Labour victory in 1997.
Like then, Labour and Starmer himself already enjoy a hefty polling lead, with little headroom for additional growth. But it would be wrong to dismiss the pledge card as a gimmick. Forcing politicians to specify what they will change if they get elected better communicates their priorities and values than a lengthy manifesto filled with long-winded platitudes. Indeed, this process of narrowing down their ambitions to a series of key priorities can be clarifying for the politicians themselves.
It is a shame then, that Labour’s new pledge card too often retreats to generalities, lacking the specific details that the party offered in 1997. For example, on the economy they do not make a promise as clear as Blair’s pledge not to increase income tax and to cut VAT on household energy, with Starmer merely promising to keep taxes as low as possible. Likewise, whereas New Labour clearly pledged to halve sentencing and get young people off benefits through creating 250,000 subsidised training places, today’s party gives no numbers to the additional police officers, tougher sentences, and new town hubs with which it hopes to tackle anti-social behaviour.
The lack of detail is more striking with regards to the pledge to set up Great British Energy, which seemingly by magic will cut customer bills and boost national security. That Starmer now feels the need to include a pledge on energy shows how the landscape has changed since 1997, but this pledge would be much more meaningful if he had specified what Labour will do differently beyond setting up a potentially superfluous state-owned energy company. Given the party has earmarked £8bn to spend on its environmental policies, it would surely be possible to explain how many new wind or solar farms it plans to build in the new parliament. This confusing of means with ends can also be seen in the immigration pledge. A new Border Security Patrol may well be needed, but there’s no detail about what it will do in practice, beyond a boast to utilise counter-terror powers to smash the gangs.
At least in these areas there’s a vague sense of vision, unlike the education pledge, which implies that hiring less than 7000 additional teachers will somehow transform education. Again, Tony Blair set out a clearer, more exciting vision, promising to get class sizes under thirty for the youngest school pupils. One wonders whether a pledge to address the school infrastructure backlog would have made more sense.
There is however one pledge that gets the format. And that is health. Just as back in 1997 they promised to treat 100,000 extra patients, today Labour promises to create 40,000 additional medical appointments in the evening or weekend. Not only is it a tangible target, focused on the experience of the user not provider of a key public service, but it also speaks to the type of flexible, patient-focused NHS that Wes Streeting has talked about wanting to encourage. It shows a clarity of thought and communication, that is sadly lacking in the rest of the pledges.
The weaknesses of Sir Keir Starmer’s pledge card won’t cost him the election, any more than the strengths of Tony Blair’s helped him win his. But what Blair’s pledge card did do, was show how focused Labour would be on delivery – something that would pay real dividends in government. If on the eve of a general election Labour still lacks clarity on what its policies will mean in practice, is it actually ready for government?
Marks and Spencer shares surge to the top of the FTSE 100 as it smashes analyst expectations
Marks and Spencer shares have surged to the top of the FTSE 100 today after the company published a bumper set of results.
Shares in the company jumped 9.4 per cent in early deals before pairing gains after it posted a 58 per cent jump in profit before tax for the full year as chief Stuart Machin’s turnaround plan paid off.
Analysts had previously forecast a 35 per cent rise in underlying pre-tax profits to £653m for the year to April, with revenue growth of 8.9 per cent.
However, the retail behemoth said revenue was up 9.3 per cent on last year figures to £13bn, helped by demand for clothing and food lines.
Food sales grew 13 per cent as cash-strapped shoppers sought out its ‘Dine-In’ offer. Clothing sales were also up 5.3 per cent.
Profit before tax and adjusting items came in at £716.4m and adjusted basic earnings per share jumped 45.6 per cent to 24.6p.
Off the back of the figures, Marks and Spencer said it had “the opportunity to restore dividend payments at a sustainable level.” It proposed a final dividend of 2p, giving a dividend for the full year of 3p per share.
Shares in M&S were up over nine per cent in early trade.
Pushing ahead
Wednesday’s update follows a strong Christmas for Marks and Spencer, which employes some 65,000 people across the UK. The business posted a 7.2 per cent hike in total sales growth in the three months to the end of December.
Its continued success in a tricky retail environment highlights the success of chief Stuart Machin and chair Archie Norman’s turnaround plan – which included overhauling its store estate and selling more trendy clothing.
Commenting on the results, Machin said: “Two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing and Home grew volume and value share ahead of the market and sales increased across stores and online.
“Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives us wind in our sails, and confidence that our plan is working. We are becoming more relevant, to more people, more of the time.
“We remained unswerving in our commitment to trusted value, offering customers exceptional quality at the very best price. Food’s leading quality perception increased even further with over 1,000 products upgraded and 1,300 new lines launched. Continued progress was made on value perception with £60m invested in price. “
He added: “In Clothing & Home, style perception continued to improve and our decisive lead on quality and value perception was extended. Our commitment to ‘First Price Right Price’ supported full price sell through ahead of last year.”
Marks and Spencer’s joint venture
Marks and Spencer also provided insight into how Ocado.com, the online grocery business it has a 50 per cent stake in, was performing.
Revenue increased 11.2 per cent to £2.47bn, while adjusted earnings before interest, tax, deprecation and amortisation (EBITDA) came in at £26.8m against a loss of £15.1m last year.
While adjusted EBITDA improved, M&S group’s share of adjusted loss increased by around £8m to £37.3m due to higher interest costs on shareholder loan funding and a write-off of a deferred tax asset in the current year.
Marks and Spencer said although the financial performance of Ocado Retail remains disappointing, the “revenue improvement this year under the new management team has been marked”.
The pair is currently embroiled in a dispute over a final payment related to their online food joint venture.
Ocado and retail giant Marks signed a 50:50 deal nearly five years ago for Ocado to sell the retailer’s food via its online store, with Marks and Spencer paying an upfront sum of over £560m.
It is due to pay an additional £190.7m this August, based on certain performance targets being met.
Marks and Spencer has claimed Ocado has not reached these performance targets, so it is withholding the final payment.
Not a ‘flash in the pan’
The company’s robust results have promoted a wave of positive comments from analysts.
Charlie Huggins, manager of the quality shares portfolio at Wealth Club, commented: “Marks and Spener has had an excellent year and there is now enough evidence to suggest this isn’t a flash in the pan.
The most impressive thing about the M&S turnaround story so far has been the market share gains, in both Clothing and Food. They have been able to achieve this while reducing discounts, which is a good sign. In other words, they aren’t just slashing prices in the hope of getting quick sales growth. They have been focused on reinvigorating branding and designs, which ought to be more sustainable.”
Huggins added: “All-in-all, M&S’ execution has been impressive in a difficult retail environment. Encouragingly, it sounds like there are plenty more self-help initiatives to go for, to keep this momentum going.”
While Mark Crouch, analyst at investment platform eToro, said: “In what has become one of the most emphatic turnarounds seen in British retail in recent years, the Marks and Spencer comeback story is turning into something of a fairytale for investors. Shares are up over 50 per cent in the last twelve months as the business maintains the trend of attracting new customers and accelerating growth.
“Despite inflationary pressures easing, retailers remain fully engrossed in a tug of war for market share, one where quality and value are proving to be key battlegrounds. M&S, renowned for their quality, has applied focus to offering customers significant value along with it and it seems to be working.”
Sir David Clementi: King’s Cross chief ends 16-year stint before Google move-in
City grandee and former BBC chair Sir David Clementi will step down as head of King’s Cross Central, marking the end of a 16 year stint at the company.
King’s Cross Central Limited Partnership (KCCLP), the group behind one of the biggest developments in central London, announced the appointment of a new chair today.
Property veteran Stephen Hubbard was unveiled as the new boss for the company which owns and manages 67 acres of the King’s Cross estate.
Hubbard, who had a 40 year tenure at CBRE and eventually became chairman of the property company, replaces Sir David Clementi, chair of the KCCLP board for 16 years.
Hubbard said:“This is an exciting time to succeed Sir David. Under his leadership, King’s Cross has successfully transitioned from a development to being a mature and exciting place to live, work and visit.
“The job now is to drive the excellence in customer focus and continue to ensure that King’s Cross remains an inclusive and progressive part of the capital.”
Clementi, was the first chair of KCCLP leading the company between 2008-2024.
During his 16 years he oversaw the creation of the 67-acre King’s Cross estate from the completion of Pancras Square, the opening of the Granary Square, which welcomed Central Saint Martin’s as the estate’s first occupier, through to the launch of retail destination Coal Drops Yard and planning approval for the final commercial Building F1.
Sir David Clementi added: “It has been a huge privilege to chair the Board for 16 years and to see the development of the King’s Cross Estate from a brownfield site to the thriving community it is today.
“I have enjoyed the job immensely, particularly since I have been surrounded by outstanding colleagues, both on the Board and across our professional and advisory teams.”
House prices rise for first time since last June but sticky rents likely to remain challenge for tenants
New government data has shown house prices grew for the first time since last summer in March, while private rents cooled from the record highs recorded at the start of the year.
According to the latest house price index from HMRC Land Registry, house prices have risen 1.8 per cent over the past year, taking the average UK house price to £283k – the first annual increase in prices since the year to last June.
The HMRC Land Registry house price index is based on completed sales rather than advertised or approved prices, which makes it a more accurate reading of market sentiment.
However, the figure falls in line with other reports, such as Rightmove’s, which said house prices are slowly creeping up.
Sentiment in the housing market has shown signs of improvement this year despite mortgage rates increasing and the Bank of England continuing to hold interest rates at 5.25 per cent.
On Wednesday, it was also reported that inflation has dropped to the lowest rate since September 2021 at 2.3 per cent which will also improve buyer confidence in the housing market.
Josh Skelding, commercial director at Fignum, said: “It’s certainly a positive sign that average asking prices are continuing to rise, with today’s data suggesting that the market is reaching a stable equilibrium.
“Demand has continued to heat up with the backlog of movers put off by last year’s volatile mortgage rates fuelling mortgage activity and putting upwards pressure on house prices. As we head into the spring and summer months, typically characterised by increased home listings compared to other seasons, the market looks set to remain buoyant.”
He added: “In addition, lenders are responding to optimism in the markets and the decline in swap rates has recently prompted three major lenders to cut rates to fixed rate products, providing another much-needed boost for borrowers.”
‘Particularly challenging’ renting environment
Meanwhile, private rents also cooled slightly from the record highs recorded in March.
The amount tenants pay grew by 8.9 per cent in the year to April against a 9.2 per cent rise in the prior month.
In London, rent inflation remained the highest, swelling to 10.8 per cent.
However, Rebecca Florisson, principal analyst, the Work Foundation at Lancaster University, said it is likely renters will still struggle with affordability.
She said: “On average, renters in Britain are having to find £103 more a month than they were last year. This is most acute for workers in London where rents are now 10.8 per cent higher than in 2023, and will hit insecure workers hardest as they earn on average £3,276 less than those in secure jobs.
“With only 30 per cent of employers preparing to give above inflation pay rises in 2024, many private renters will have little breathing room to pay their increased rental costs which are already outpacing wage increases.
She added: “This will be particularly challenging for the 1.4 million private renters in severely insecure work, who are most vulnerable to rent hikes while managing irregular hours and variable pay checks.”
“There is more bad news for renters as UK house prices have risen by 1.8 per cent on the year, putting the opportunity of buying a house further out of reach for many cash-strapped private renters.