The Times - UK (2022-06-13)

the times | Monday June 13 2022 37

Business

that any tilt at BT would put “the Altice

track record at places like Altice USA

and SFR [the tycoon’s French telecoms

company] into the spotlight and here

reports of customer and employee

dissatisfaction should give politicians

sufficient worry about a take-out of

such strategic national importance”.

Drahi, 58, has had several run-ins

because of his acquisition sprees. Four

years ago the European Commission

imposed a €124.5 million fine on Altice

for implementing its acquisition of

Portugal Telecom before notification

or approval by the commission. Mar-

grethe Vestager, the competition com-

missioner, said the fine reflected the

“seriousness of the infringement”.

Moreover, it was the second time that

Altice had “jumped the gun” on a deal.

In November 2016, France’s competi-

tion authority imposed an €80 million

The week ahead

tomorrow

Attention will turn to central banks

on both sides of the Atlantic as they

battle inflation. The US Federal

Reserve is widely expected to raise

interest rates by another 50 basis

points on Wednesday, matching the

accelerated pace of monetary

tightening that it carried out in May

and signalling a similar rate rise for

July. The world’s most powerful

central bank has embarked on

aggressive monetary tightening to

contain domestically driven

inflation that has hit a 40-year high

of 8.6 per cent.

Other central banks have taken a

similar path to the Fed, albeit

tightening monetary policy at a

slower pace. The Bank of England

has carried out a more moderate

pace of rate rises at 0.25 basis points

since December last year. Markets

expect the Bank’s monetary policy

committee to raise rates again on

Thursday, lifting the main Bank

Rate to 1.25 per cent for the first

time since 2009.

The nine-strong monetary policy

committee has been divided over

the path of interest rates in recent

months, as inflation is expected to

peak at double digits later in the

year and as the economy faces a

prolonged slowdown. Economists at

Bank of America expect the MPC to

vote in favour of a 25-basis-point

rise by six votes to three, with

dissenters arguing for a 50-basis-

point rise to the Bank Rate.

Silvana Tenreyro and her fellow MPC

members are expected to raise rates

In their last round of

updates back in the

spring, housebuilders

gave no indication that

demand for new-build

houses was slowing. If

anything, their

showrooms were

getting busier.

However, new

mortgage approvals

have started to fall and

the pace of house price

rises is easing down.

Crest Nicholson is

reporting its first-half

numbers. Inflation is

affecting every

business, but so far

Crest and its peers

have been able to

offset rising build costs

by raising their prices.

Interims Crest

Nicholson, Paragon

Banking

Finals Ashtead, CML

Microsystems,

DiscoverIE,

FirstGroup, Iomart,

OnTheMarket, Oxford

Instruments, Palace

Capital

Trading updates

Bellway, Ferguson,

Standard Bank

thursday

wednesday

friday

Speculation over the future of

Alison Brittain, right, does not

appear to be distracting the

Whitbread chief executive from

her day job. Morgan Stanley

thinks its first-quarter

trading update will

show Premier Inn’s

revenue per

available room —

revpar, the key

industry metric —

18 per cent ahead of

pre-Covid levels,

well ahead of the

13 per cent increase

for the wider mid-scale

and economy market.

At its final results in April,

Premier Inn reported a remarkable

30 per cent jump in UK

accommodation sales in the first

seven weeks of the current year and

there are hopes it may have

managed to keep the momentum

going at a similar rate since.

Inflation, labour shortages and

supply chain disruption will be a

focus of attention, with cost

inflation likely to be at

something close to 10

per cent, although

seasoned

Whitbread-watchers

are convinced

Brittain will bring

forward or increase

the scale of the

£140 million of cost

savings planned by

2025.

Interims Idox

Finals Allied Minds,

Bloomsbury Publishing, Castings,

Motorpoint, Severfield, Tatton Asset

Management

Trading updates Whitbread,

WH Smith

In a trading update for the three

months to May, Tesco is expected to

shed more light on how customer

spending is holding up as shoppers

deal with rapidly increasing food

inflation. The Office for National

Statistics said on Friday that 41 per

cent of households surveyed over

the past fortnight were spending

less on food shopping and essentials.

Analysts at Jefferies expect Tesco to

reveal a 1.4 per cent decline in like-

for-like sales, excluding fuel, over

the quarter, compared with a

lockdown-boosted performance

from last year. In April the retailer

said total retail operating profits

were set to fall by up to 9 per cent in

the year to next February.

Trading update Tesco

Biffa is “minded” to recommend a

£1.36 billion takeover proposed by

Energy Capital Partners, a private

equity firm. Britain’s third largest

waste disposal company is due to

report profits of about £75 million

on annual revenues of £1.2 billion.

After reporting the takeover

approach, it also admitted it could

be facing a tax bill, interest charges

and penalties of up to £153 million in

a row with HM Revenue & Customs

over the alleged mispayments of

landfill taxes.

Finals Biffa, Best of the Best,

GB Group, Halfords, Halma, JLEN

Environmental Assets, Lindsell

Train Investment Trust, Mountview

Estates, Syncona

Trading updates Boohoo, N Brown

focus of a

inflatio

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B

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£1 4

savi

202 5.

Interims

Finals Allied

Bl b P bl

Stanley

r

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n April,

kbl

fine relating to the takeovers of SFR

and OTL Group, which distributed

services under the Virgin Mobile brand.

Amid Drahi’s reputation — he has

earned the nickname “the cost-killer”

among French trade unions — and the

sensitivities over BT, one of Britain’s

most strategically important compa-

nies, Mike Clancy, general secretary of

Prospect, the technicians’ union,

warned ministers in December that the

government needed “to ensure that

any proposed takeover protects our

national interest, infrastructure and

jobs... BT is too important to our future

economic needs.”

The FTSE 100 company, privatised in

1984 and valued at £17.7 billion, is invest-

ing £15 billion via its Openreach

division to build a full-fibre broadband

service to 25 million premises by 2026,

the centrepiece of Philip Jansen’s

strategy since he became chief execu-

tive in 2019 and in line with govern-

ment policy. Jansen, 55, also has been

stepping up a multibillion-pound cost-

cutting and modernisation drive at BT,

which owns EE, the mobile network,

and BT Sport. That savings drive has

led to a confrontation with unions.

Drahi’s lock-up expires a day before the

Communication Workers Union is due

to send ballot papers to its members

amid threats of BT’s first national strike

in 35 years in a dispute over pay.

Drahi seemingly has sought to tread

carefully with politicians and regula-

tors. He has engaged Flint Global, the

advisory consultancy co-founded by

Ed Richards, the former boss of Ofcom,

and Sir Simon Fraser, a former per-

manent secretary at the department for

business, and Altice met Kwarteng last

July, shortly after the Frenchman first

emerged with his shareholding.

He has remained tight-lipped over

his BT investment, but at the time he

raised his position in December he said

that he held BT’s board and manage-

ment in “high regard” and remained

“fully supportive of their strategy”.

Jansen said last year he was

“delighted” that Drahi had invested in

BT as the billionaire “knows the indus-

try extremely well”.

Drahi is thought to believe that

Britain is now one of Europe’s most pro-

investment network environments,

after BT secured a pivotal agreement in

March with Ofcom, the regulator, and

that the company is undervalued by the

stock market. He is said to view BT as a

long-term investment, a position that

the government’s security review and

his recent business fortunes have

thrown into doubt.

for Drahi’s next call

67%

Fall in Altice USA

shares since $30 per

share 2018 float

¤7bn

Potential sale of

Altice Portugal

dropped

$5bn

Potential IPO of

Teads dropped

$5bn

Potential IPO of

Sotheby’s

BlackRock gives investors voting choice

The world’s largest asset manager is

expanding the opportunity for its

clients invested in index funds to

participate in the shareholder votes of

companies amid increasing interest in

governance issues.

BlackRock launched an initiative in

October giving some institutional

clients, such as pension funds and

insurance companies, more choice in

how they participate in shareholder

votes such as those at annual meetings.

It is now expanding its eligible insti-

tutional pooled fund ranges in the UK

and launching it in Canada, meaning

that almost half, or 47 per cent, of its

$4.9 trillion index equity assets, includ-

ing more than 650 pooled investment

funds in the United States and Britain,

are now able to participate in its “voting

choice” initiative.

Thus far the firm’s clients have com-

mitted $530 billion, or a quarter of their

eligible assets, to voting their own

preferences. BlackRock is exploring the

potential to expand the initiative, in-

cluding to individual investors in funds.

The plans come amid the increasing

importance of issues of ESG —

environmental, social and corporate

governance — such as concerns about

executive pay and boardroom diversity.

Romi Savova, 46, chief executive of

PensionBee, which was floated in

London in April last year, said: “Giving

customers the ability to participate in

shareholder voting through their pen-

sions is the powerful next step towards

our vision to create a future where

everyone can have a happy retirement.”

In Janury Larry Fink, 69, the head of

BlackRock, defended the firm’s push to

hold companies to account for their

environmental and social progress

after conservative lawmakers in Amer-

ica claimed that the investment firm

was using its financial power to impose

ideological beliefs on the corporate

world. Fink wrote in his annual letter to

chief executives that “stakeholder

capitalism”, where companies should

adopt policies that benefit their com-

munities as well as their shareholders,

“is not woke... it is capitalism”.

Sandy Boss, global head of invest-

ment stewardship at BlackRock, said

that some clients were “seeking in-

creased customisation, including the

opportunity to align their voting with

their unique investment philosophies

or their views”.

BlackRock voting choice is available

to all American pension plans, while in

Europe and Britain 80 per cent of

BlackRock’s index equity assets, other

than exchange-traded funds, are

eligible. BlackRock’s clients invested in

index holdings can still continue to

elect the firm to manage their voting

decisions on their behalf.

Alex Ralph