Daily Mail - 07.08.2019

Daily Mail, Wednesday, August 7, 2019

Domino’s boss

to step down

as franchise

row rages on

by Hannah Uttley

Mastercard

nets Danish

rival in £2bn

blockbuster

PAYMENTS giant Master-

card has made its biggest

ever acquisition, buying

a stake in a Danish rival

for £2.6bn.

The firm said it is snap-

ping up part of payments

firm Nets in a push to offer

faster payments.

The deal will see Master-

card absorb Nets’ clearing,

electronic billing and

instant payment busi-

nesses, which are part of

the Denmark-based com-

pany’s corporate arm.

It comes after the Ameri-

can giant acquired UK-

based Vocalink, formerly

owned by a group of 18

banks, for £700m in 2017.

Michael Miebach, chief

product and innovation

officer at Mastercard, said:

‘This deal strengthens our

unique position as the one-

stop partner for any bank,

merchant or government’s

payment needs.’

Bo Nilsson, group chief

executive of Nets, said:

‘With its resources and

global reach, Mastercard

is uniquely positioned

to unlock the potential

of Nets’ account-to-

account business.’

Mastercard admitted

paying for the deal will hit

profits for up to two years

after it completes.

Nets employs 3,500 staff

across the group.

ONE of Britain’s most senior business-

women has abandoned plans to join

the Bank of England, so she can head

the UK operations of American soft-

ware titan Salesforce instead.

Dame Jayne-Anne Gadhia (pic-

tured), 57, the former boss of Virgin

Money bank, was due to become a

member of the Bank’s Financial Policy

Committee next April.

But she is following in the footsteps

of other Britons who moved to Sili-

con Valley companies including

former MP Sir Nick Clegg who heads

communications at Facebook,

designer Sir Jony Ive who recently

left Apple, Slack’s computer pro-

grammer Cal Henderson and investor

Wendy Tan White, who is at Google.

Gadhia was due to replace former

Barclays boss Martin Taylor when he

stands down next year from the com-

mittee, which monitors the UK’s

financial system and looks for risks.

The Treasury is now seeking an

alternative appointment. The Bank of

England said: ‘We fully understand

her decision and wish her well.’

Salesforce, based in San Francisco,

creates software for businesses.

THE chief executive of Domi-

no’s Pizza in the UK is to step

down amid a row with franchise

owners of its stores.

Shares surged more than 8pc

after David Wild said he is retir-

ing, to later close 1.7pc, or 3.9p,

higher at 237.7p.

Wild will remain until a

replacement is found and is to

stay on for a handover period.

Chairman Stephen Hemsley

will also depart after recruiting

a new chief executive, and once

his own replacement has been

decided on. The overhaul fol-

lows a long-running argument

with franchisees, who have been

demanding a higher share of

profits and are dragging their

heels on store openings.

Wild said talks are continuing

and added: ‘The situation is

complex, and we expect resolu-

tion will take some time, likely

into 2020. We are committed to

working with our franchisees to

agree win-win solutions.’

Analysts have also raised con-

cerns about Wild’s management

style after three finance direc-

tors quit during his tenure.

Wild, 64, denied he was at fault

for the resignations. He has

headed Domino’s UK business

since 2014, pushing sales past

£1bn a year for the first time.

Analysts at Barclays said:

‘While this may sound harsh,

the announcement that the

chief executive will retire is the

more positive news from an

investor perspective.’

The shake-up came as Domi-

no’s posted a 27pc fall in profits

to £30.5m for the first six months

of the year as expansion in

Europe affected performance.

It was also revealed that it has

forked out £7m on stockpiling

ingredients, such as tomato

sauce from Portugal and frozen

chicken from Asia, in prepara-

tion for a No Deal Brexit.

Despite difficulties overseas,

Domino’s posted a 3.9pc rise in

comparable sales in the UK,

compared with a year earlier.

The finale of fantasy television

series Game of Thrones in May

boosted sales as it sold a pizza

every four seconds. UK perform-

ance lifted overall sales, which

increased 3.5pc to £295.6m.

Nick Clegg

Head of

communications

Facebook

Sir Jony Ive

Design

architect

Apple

Michael

Acton Smith

Chief executive

Calm

meditation

app

Cal Henderson

Chief

technology officer

Slack

messaging

service

Britons who have made it big

with Silicon Valley firms

Jayne-Anne

Gadhia

UK and Ireland

chief executive

Salesforce

GADHIA DITCHES BANK

ROLE FOR TECH TITAN

W

HEN Bill Clinton was

up to his neck in

impeachment hearings

over a liaison with

Monica Lewinsky he

ordered an air strike against terror-

ists in a move construed as an effort

to divert attention.

There is a suspicion that President

Donald Trump tried a similar ploy this

week when he decided to ratchet up the

pressure on China by proposing ever

more tariffs and labelling the country as

a currency manipulator, in the face of

criticism over the response to the El

Paso shootings.

His upping of the stakes in the trade dis-

pute was enough to spread panic across

global equity markets. In spite of the rheto-

ric, there has long been a view in global

financial circles that eventually Trump and

his ‘good friend’ President Xi Jinping would

eventually settle their differences.

This is not dissimilar to the belief that the

Commons could not be stupid enough to

reject Theresa May’s Brexit deal and imperil

prosperity. The Federal Reserve was criti-

cised last week for cutting US interest rates

by a quarter of point, citing worsening eco-

nomic conditions when there weren’t any.

The cautionary loosening of borrowing

costs may have been the right thing to do.

China has limited tools with which to hit

back at the US, its biggest export market.

There is simply not enough pork bellies or

soya for the Chinese to retaliate against the

US. This week Beijing adopted a new tactic

by allowing the exchange rate for the Chi-

nese currency – the renminbi – to drop

through the floor of seven to the dollar.

Arguably, Beijing was playing politics

with the currency, as in the past it has inter-

vened to maintain its value. Trump’s retali-

ation has been to describe China as a ‘cur-

rency manipulator’.

The president has taken the Sino-US dis-

pute to a more perilous level. Voters in

America’s Rust Belt may welcome him

teaching China a lesson. They may regret

the repercussions should China’s output

continue to tumble, markets go into parox-

ysm and there is a recession.

Brinkmanship is all very well from the

author of the ‘The Art of the Deal’. But you

cannot bully the People’s Republic without

appalling consequences for the livelihoods

of ordinary people.

Tailwinds

MAKING head or tail of the financial results

of Rolls-Royce is tricky.

This is a result of the mismatch between

the long-term nature of what it does and

the reporting cycle. At first blush, it looks

as if Rolls made a stonking loss.

But there are all sorts of distortions. The

biggest is the hedge of $35bn (£28.8bn)

required to protect its orders against cur-

rency movements.

This resulted in a charge of £861m in the

first half of this year. Strip this out and

underlying profit actually climbed by 32pc,

to £203m, on turnover up 7pc, to £7.35bn.

Exceptional costs, including the problems

with the Trent engine, will cost the engineer

£100m over the next three years.

Rolls has encouraged people to keep an

eye on cash flow as a better measure of per-

formance. That doesn’t look too bright

either, with £391m flowing out in the first

half. But Rolls says this will be reversed in

the current period and is sticking with guid-

ance of £700m-plus for the second half.

What is encouraging is the order book. It

delivered 257 large engines in the first half

of this year and there is a wide-body order

book for 2,136 more units plus the service

income that comes with it.

Power Systems is going great guns and

Rolls has taken a step towards meeting the

climate change challenge by mopping up

Siemens eAircraft enterprise.

Behind all the murk there is a growing

enterprise which is seeking to climb out of

financial turbulence.

Bigger bucks

HAVING collected £8m when CYBG bought

Virgin Money in mid-2018, Dame Jayne-

Anne Gadhia opted for public service when

she agreed to join the Bank of England’s

Financial Policy Committee, which main-

tains stability.

The choice was applauded. It brought

gender diversity and great expertise in con-

sumer banking to the committee.

Now Gadhia has changed her mind and is

to take a top job at the cloud computing

giant Salesforce, which plans to invest

£2bn-plus in Britain.

Public service was a nice thought. But the

allure of executive responsibility and even

bigger bucks won.

Trump’s dangerous game

Alex

Brummer

CITY EDITOR

Page 63

Barneys bankrupt

US luxury department

store Barneys has gone

bust 96 years after it

was founded.

The retailer is up for

sale and has filed for

Chapter 11 bankruptcy

after struggling to pay

soaring rents. At its

flagship store in New

York, rental bills almost

doubled to £25m.

Barneys will close

shops as it hunts for a

buyer. It has secured a

£61m loan to keep it

afloat during the bank-

ruptcy process, which

in the US does not nec-

essarily mean a busi-

ness will cease trading.

Boss Daniella Vitale

said: ‘Barneys has been

dramatically impacted

by rents that are exces-

sively high.’

IN THE MONEY

Ivan Menezes, 60

£ Chief executive, Diageo

THE boss of

drinks firm

Diageo pock-

eted £11.7m

in the year

to June 2019.

Father-of-two Ivan

Menezes, was paid

£2.7m more than in

the previous year.

He got a £1.2m base

salary, £407,000

towards his pension

and £95,000 in bene-

fits such as medical

insurance and a com-

pany car allowance.

But most of the rise

came from growth in

his bonuses which

depend on Diageo’s

share price growth.

The stock climbed by

25pc in the period

and his total bonuses

came to £9.9m.

Boots language aid

HIGH Street beauty

chain Boots is testing

technology that

will allow staff to

communicate with

customers unable to

speak English.

It will use an app,

Voyce, to connect staff

and patients with trans-

lators in more than 245

languages.

Around 726,000 people

in England and Wales

are not fluent in Eng-

lish, with 138,000 unable

to speak it at all.

The service is being

tested in Belfast, Bir-

mingham, Knights-

bridge, Leicester and

Southampton.

Richard Bradley, at

Boots, said: ‘This is a

great example of how

technology can help.’

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