The Daily Telegraph Thursday 1 August 2019 *** 29
BAE holds fire on Typhoon sale to Saudi Arabia amid export ban
By Alan Tovey
BAE Systems refused to say how a ban
on exporting weapons to Saudi Arabia
in the wake of the murder of journalist
Jamal Khashoggi could affect a block-
buster deal to sell Typhoon jet fighters
to the Gulf nation.
The defence giant last year agreed a
provisional sale with the kingdom for
48 of the aircraft – that BAE builds as a
member of a pan-European consor-
tium with Airbus and Leonardo – part
of a £5bn-plus package.
However, in the wake of the murder
of Mr Khashoggi, Germany imposed a
ban on exporting weapons to Saudi
Arabia, a country that represents 12pc
of BAE revenues.
Announcing positive half-year re-
sults, BAE boss Charles Woodburn
would not be drawn on the likelyimpact of the export ban, which could
scupper the sale if it continues, al-
though BAE has yet to formally book it
as an order.
He described BAE as being “subject
to geopolitical uncertainties”, but said
the company “continues to provide
equipment, support and training to
Saudi Arabia” for products already
delivered to the country. The company
was “working closely with industrypartners and the UK government to ful-
fil contractual support arrangements
on key European collaboration pro-
grammes”.
The stance came as Airbus, which
also reported interim figures yester-
day, said it would take a €208m (£190m)
hit to profits from the German-imposed
ban related to a border security con-
tract, but the warning also raises ques-
tions about future Typhoon sales. BAEsaid stronger performances from its
maritime and combat vehicle pro-
grammes helped deliver a 36pc rise in
pre-tax profits to £776m, while reve-
nue was up 4.5pc to £9.4bn.
Orders taken in the period were
£8.4bn, lifting BAE’s order book to a
record £47bn. Mr Woodburn said the
stronger performance showed the
company was delivering on a drive to
improve operational performance.“We’ve got the right people in the right
jobs, where they can address problems
earlier before they require major
course corrections,” he said, adding the
new regime helped allow the dividend
to be raised by 4.4pc to 9.4p.
BAE shares closed 1.1pc higher at
548.6p. Across the Channel, Airbus
posted revenues of €30.9bn, up 24pc,
and net profits of €1.2bn, a rise of 141pc
on last year.Fears over rise of
zero-hours jobs
and gig economy
‘being overdone’
By Tim Wallace
PANIC over the rise of the gig economy,
zero-hours contracts and insecure
work is based on a misunderstanding,
according to the Chartered Institute of
Personnel and Development (CIPD).
Rather than becoming less secure,
the world of work has become more
stable, despite the rising profile of flex-
ible online jobs and the use of gig work-
ers in industries such as minicab
driving and takeaway delivery.
The professional body’s study of the
job market found that the number of
people in “atypical” work has risen, but
largely because the overall number of
people in work has hit record highs.
There has been little change in the
level of part-time work or self-employ-
ment as a proportion of those in work,
while temporary work has declined in
favour of permanent positions – sug-
gesting worries over a supposed surge
in insecure work are overdone.
“On a wide range of indicators, the
evidence suggests that, actually,
employment security has remained
remarkably stable over the past two
decades with little substantive
evidence of an increase in casual and
insecure work,” said Ben Willmott at
the CIPD.
CIPD’s surveys indicate that gig
workers typically choose this type of
job to boost their income. Just 14pc said
they wanted a regular job but could not
get one and settled for this type of job.
Mr Willmott cautioned against “de-
monising” zero-hours contracts, not-
ing that they do suit some workers at
different points in their careers, such
as pensioners seeking flexible work.
Some 85pc of workers are classed as
employees, barely changed from 87pc
in 1998. Self-employment is up but
temporary work is down, as is the num-
ber of people taking a second job.
The share of young people across
those two categories has barely
budged, rising from 17pc before the
turn of the millennium to 18pc now.
Similarly, the number of 15 to 24-year-
olds on zero-hours contracts edged up
from 6pc in 2014 to 7pc last year. Only
about a quarter want more hours.
Despite concerns over flexible work-
ing reducing the stability of earnings,
the Office for National Statistics found
variable pay had dropped. “As a share
of earnings, the importance of over-
time, shift pay, bonuses, and incentive
pay has fallen since 2000, although
much of this decline seems to have
happened pre-crash and in more re-
cent years the shares have been rela-
tively stable,” said the CIPD report.
“They are also quite low – premium
shift pay accounted for about 1pc of
full-time earnings in 2017, incentive
payments just over 1pc, and paid over-
time 2.5pc.” Similarly the proportion of
workers on low pay, defined as below
two-thirds of the national median aver-
age, is down from 22pc of the work-
force in 1997 to 18pc last year.
The share on more than 1.5pc of the
average has not budged, indicating
there are more jobs paying wages in the
middle of the distribution, countering
the common idea that the jobs market
has been polarised around more high
and low earners. This also applies to
the idea that workers decades ago used
to have a “job for life” but now switch
employers more regularly. The average
length served in a job has risen from
eight years in 1998 to 8.6 years now. Just Eat profits
swallowed by
investments as
merger nears
By Matthew FieldLONDON-BASED food delivery firm
Just Eat enjoyed a surge in orders at the
start of this year even as profits were
gobbled up by investments ahead of a
proposed merger with Dutch rival
Takeaway.com.
Just Eat, which confirmed the £9bn
deal earlier this week, reported reve-
nue growth of 30pc to £464.5m in the
first half of the year as orders ticked up
21pc. However, profits tumbled 98pc to
just £800,000 on the back of invest-
ments in its Brazilian iFood arm.
“Performance in our UK business
strengthened in [the second quarter],
our Canadian and European businesses
are performing well and Australia has
returned to top line growth with our
delivery operations achieving gross
profitability,” said Peter Duffy, Just
Eat’s interim chief executive.
Just Eat’s merger partner Takeaway.
com also experienced rapid growth,
with orders rising 70pc compared with
the first half of 2018. Revenues jumped
68pc to €185m (£170m), with a loss of
€37m. News of the merger sent Just Eat
shares soaring 21pc this week, valuing
the London-listed company at £5.2bn.
The deal would create a global food
delivery giant and a bulwark against
new, fast-growing rivals such as Deliv-
eroo and Uber Eats.
Under the agreement with Takea-
way.com, Just Eat investors would own
52.2pc of the group. Takeaway.com has
become one of Europe’s leading food
delivery firms. The companies have
until Aug 24 to confirm the deal.
Just Eat maintained its full-year
guidance and said the UK had seen
order growth of 11.2pc in the second
quarter. It has also announced new
tie-ups with Greggs and Asda in the
UK, as well as deals with Burger King
and Domino’s overseas.
Just Eat said it expected recent ac-
quisitions of smaller firms including
Flyt, Practi and corporate catering
start-up City Pantry would hit profits
by £10m to £12m over the year.All eyes The owner of Ray-Ban sunglasses, sported here by Ashley James, the broadcaster
and DJ, is to take over Vision Express parent GrandVision for €7.2bn (£6.5bn). The deal will
give EssilorLuxottica control of more than 7,000 outlets across the world.GETTY IMAGES EUROPEIntu cancels dividend and warns
over debts as it posts £856m loss
By Jack Torrance
SHOPPING centre owner Intu has
warned investors it could be forced to
raise cash to shore up its balance sheet
as the struggling retail sector contin-
ues to weigh on its fortunes.
The owner of both the Lakeside
Shopping Centre in Thurrock, Es-
sex, and Greater Manchester’s Trafford
Centre has axed its dividend “for the
time being” as it revealed a dramatic
slump in the value of its properties had
sent it to an £856m half-year loss.
Intu’s like-for-like rental income fell
7.7pc in the six months to June, bat-
tered by a series of retailers including
Arcadia and Debenhams going through
insolvency proceedings.
Matthew Roberts, chief executive,
said an equity raise was “one of a num-
ber of levers” the FTSE 250 firm could
pull as it struggles to get to grips with
its £4.7bn debt mountain. Intu has
been selling stakes in some of its
shopping centres, cutting capital
spending and is divesting its Spanish
business.
Mr Roberts said: “The last thing we
will get to is equity, but I’m very keen
to come across as on top of the issues,
front up to the issues and let peopleknow my thinking. Once we’ve done
the dividend and the capex cuts and
sold the assets, if we have to raise eq-
uity, then we will end up doing that,
but at present we’ve got lots of other
levers we can pull.” Intu’s shares fell31.9pc, or 22.4p, to close at 47.9p yes-
terday and have sunk more than two
thirds in the past 12 months, leaving it
valued at £727m.
Retail property valuations have been
waning as investors take fright at a
wave of “company voluntary arrange-
ment” insolvencies among retailers,
which have been hurt by the shift to
online shopping.
CVAs allow retailers to demand rent
cuts and debt write-offs from landlords
and lenders in the hope of staving off
collapse.
The value of Intu’s properties fell by
more than 10pc in the period, wiping
£872m off its portfolio.
Mr Roberts said he did not expect
Intu to be affected by any more major
CVAs this year: “If I look down my top
20 customer list, four of them have
gone through CVAs, the others are by
and large well capitalised, global
brands.ӣ4.7bn
Size of the shopping centre owner’s debt.
It said an equity raise was ‘one of a
number of levers’ it could pull to reduce itSpotify’s slowing
subscribers is music
to ears of rivals
By Natasha BernalSPOTIFY added 8m subscribers in its
second quarter – slightly fewer than
expected – which now gives the world’s
biggest music streaming service
108.5m paid-up users globally.
Spotify admitted it had “missed on
subs”, but added: “The good news is
that the shortfall was execution
related, rather than softness in the
business, and we expect to make up the
lost ground before year-end.”
The dip in subscriber growth comes
after Google and Amazon revealed free
versions of their music streaming ser-
vices, which are available on their
smart speaker products, to put pres-
sure on Spotify. Apple Music, Spotify’s
biggest rival, has about 60m paid users.
However, Sweden-based Spotify’s
total monthly active users rose by one
fifth to 232m, due in part to an increase
in demand from a push into podcasts.
The streaming service posted an
operating loss of €3m (£2.7m) for the
second quarter, down from €47m in
the first quarter, while revenues were a
better-than-expected €1.66bn, mostly
from subscription fees. Shares fell
almost 6pc before regaining some
ground to $151.72 in New York and have
increased more than a third this year.Business
Ryanair to cut around 900
staff as it has ‘too many crew’
By LaToya Harding
RYANAIR is poised to jettison about
900 jobs in the coming weeks in a bid
to tackle falling profits, the threat of a
no-deal Brexit and the grounding of
Boeing’s 737 Max aircraft.
Michael O’Leary, boss of the low-
cost airline, told staff in a video mes-
sage that it had an excess of more than
500 pilots and about 400 cabin crew
and that redundancies would be an-
nounced by the end of August. He
added that it would need 600 fewer
cabin crew by next summer.
“We have to cut our aircraft num-
bers and our staffing, not just in sum-
mer 2020, but also in winter 2019,” he
said. The news comes just days after
Ryanair posted a 21pc decline in pre-
tax profits to €243m (£221m) in the
three months to June, which it blamed
on higher fuel costs and a 6pc slide in
average fares. Revenues jumped 11pc
to €2.31bn.
The airline cited challenging condi-
tions in Germany, where it faces stiff
competition, as well as in the UK,
where Brexit uncertainty is sapping
consumer confidence.
Ryanair is also suffering from the
prolonged grounding of the 737 Max
following two fatal crashes in five
months that killed 346 people.
Boeing is still awaiting approval
from US regulators to allow the plane
back in the air, but that may not come
until December at the earliest.
Mr O’Leary had initially ordered 58
Max planes but is now expecting to
have 30 by next summer “at best”.
“It may well move to 20, it could
move to 10, and it could well move to
zero if Boeing don’t get their s---- to-
gether pretty quickly with the regula-
tor,” he said.
“We would not rule out redundan-
cies and job losses, which will be inevi-
table if these Max delays as are
presently envisaged get worse.”
Ryanair has already slashed flights
and said it may need to close bases as a
result of the ongoing crisis. It cut its
growth for summer 2020 from 7pc to
3pc, meaning it would carry 5m fewer
passengers in the year to March 2021.Michael O’Leary,
Ryanair’s chief
executive, blamed
Boeing’s 737 Max
woes for part of the
carrier’s problemsРЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS