The Daily Telegraph Wednesday 24 July 2019 *** 31

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Inside

Jam today

It’s time

for Boris

Johnson to

indulge in

some fiscal

populism

Jeremy

Warner

Saving face

Users are

spending

less time on

Facebook as

rivals circle,

so how will

Zuckerberg

fight back?

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Bank should

not ride to

the rescue,

says Haldane

By Tom Rees

THE Bank of England’s chief econo-

mist has warned the new government

not to expect the “monetary cavalry” to

come riding to the rescue if the econ-

omy flounders.

Andy Haldane said a “dependency

culture” around central banks could

develop after a decade of ultra-low

interest rates, adding rate-setters

should not be “called at the first whiff

of grapeshot”.

Mr Haldane, who sits on the mone-

tary policy committee, said he “would

be very cautious” about cutting rates

“barring some sharp economic down-

turn” as the City frets over the rising

risk of a no-deal Brexit.

“A decade ago, central banks were

the only game in town and monetary

medicine was the right prescription,”

he said while visiting Scunthorpe. “The

game has changed and so too might the

policy prescription needed in dealing

with any downturn,” he warned.

Markets expect top central banks to

cut interest rates and reboot bond-buy-

ing programmes as global growth stut-

ters. The European Central Bank and

the US Federal Reserve are expected to

reduce rates in the coming weeks.

However, Mr Haldane said the chal-

lenges facing the economy are based in

its total supply rather than demand.

Central banks were at the forefront of

firefighting the financial crisis through

rate cuts and quantitative easing, lift-

ing demand in the economy towards

aggregate supply – the total goods and

services an economy can produce.

However, investors can no longer

rely on central banks closing this gap as

“demand is now back in line with sup-

ply” in the UK and US. He said fiscal

and structural policies from Whitehall

are the “right medical prescription”

given the most likely economic shocks,

such as Brexit and trade warfare, are

“radically different”.

“Supercharging the supply-side of

the economy is what is now needed”.

Factory orders have had their big-

gest plunge since the crisis: the overall

orders book index in the CBI industrial

trends survey fell to minus 34pc.

‘The game has changed and

so too might the policy

prescription needed in

dealing with any downturn’

Fever-Tree pair catch a £30m cold

By Oliver Gill

FEVER-TREE’s founders
were left nursing losses of
almost £30m as investors
took a dim view of  a sharp
fall in sales growth.
Charles Rolls and Tim
Warrillow, who own almost
12pc of the drinks maker,
were hit as shares fell by
nearly a 10th yesterday. Mr
Warrillow, chief executive,
said overall trading in the
year was “encouraging”.

Fever-Tree said half-year

revenue rose 13pc to £117m,

missing City expectations –

growth was 45pc last year.

Sales in the UK, its biggest

market, rose 5pc, compared

with a 73pc surge in the first

six months of 2018. Pre-tax

profit was 7pc up at £35m.

Fever-Tree, which domi-

nates the mixers market, has

faced scrutiny from City ana-

lysts for falling growth re-

cently.  Prior to the half-year

results its shares had lost

around 40pc since last sum-

mer. Sales in the first six

months of last year had been

boosted by record tempera-

tures and Fever-Tree admit-

ted a “moderation” in its

growth in the UK after “un-

seasonably poor weather”.

US sales swelled by 31pc,

after a deal with Southern

Glazer’s Wine and Spirits.

Investec’s Nicola Mallard

said the “numbers show en-

couraging progress from the

international operations”.

SFO investigates De La Rue over South Sudan ‘corruption’ claims

By Alan Tovey

DE LA RUE is being investigated by the
Serious Fraud Office (SFO) over “sus-
pected corruption” in Africa as the em-
battled printer’s bad news continues.
Shares fell as much as 15pc yesterday
after it was revealed a probe has been
opened into the banknote business and
“its associated persons in relation to
suspected corruption in the conduct of
business in South Sudan”.
De La Rue said it would co-operate
with the SFO, adding because of the
“early stage” of the investigation it is
“not possible to predict reliably what
effect their outcome may have”. It de-
clined to give more details. SFO investi-

gators urged whistleblowers to get in

touch, via its secure reporting portal.

De La Rue trumpeted its success in

winning the contract to print bank-

notes for South Sudan in 2011, the year

that it seceded from the Republic of

the Sudan.

The company said it spent six

months producing a new currency for

the world’s newest country.

However, three years ago South Su-

dan media reported allegations of cor-

ruption among government ministers

and officials linked to the bank – claims

dismissed by its then finance minister.

The investigation is the latest trou-

ble for De La Rue. One of its largest

shareholders, activist investor Crystal

Amber, wants chairman Philip Roger-

son to step down immediately, saying

De La Rue has had massive value de-

struction under his seven-year watch.

Shares have near-halved in the past

year, after profits plunged and a further

warning at the annual results in May.

Chief executive Martin Sutherland said

he would go when a successor is found.

He was at the helm last year when De

La Rue lost the £400m contract for UK

passports – and threatened to sue the

Government over the awarding of the

10-year deal to French-Dutch firm

Gemalto, before quickly backing down.

Mr Rogerson said he will go once a

new chief executive is found but Crys-

tal Amber wants him to quit immedi-

ately and is threatening to call a special

meeting to vote on ousting him. The

investor, which has a 6.3pc stake, also

hit out at what it calls strategic blun-

ders and failures to engage with poten-

tial partners – denied by De La Rue.

Fund manager Richard Bernstein

has also criticised bosses’ bonuses at

the printer, and the firm faces the

prospect of a rebellion at its annual

meeting tomorrow.

Shareholder adviser ISS wants inves-

tors to vote against De La Rue’s remu-

neration report because of worries

about bonuses awarded despite the

firm’s poor performance.

Concerns about remuneration in-

clude Mr Sutherland’s total pay, which

rose more than 20pc to £954,000 for

the year, including a £197,000 bonus

that Crystal Amber wants repaid.

ISS said: “Bonuses have been paid

out despite a decline in financial and

share price performance.

“It is questionable whether any bo-

nus is appropriate given this backdrop

... especially in the case of the chief

executive, whose departure was an-

nounced concurrently with the [full-

year results].” The Investment

Association has issued an “amber top”

warning” about the company, with

concerns over pension payments to

Mr Sutherland.

The £132,000 the chairman is in line

for is equal to 30pc of his salary, a level

that the association says is outsized

compared with most workers.

Mr Bernstein said: “The South Sudan

news is just another body blow for

management at De La Rue.”

He added that while few details are

known about the SFO probe, “manage-

ment needs to take responsibility. All

bonuses should be repaid.”

De La Rue chief

executive Martin

Sutherland has said

he will leave once a

successor is found

Across the pond Country-chic retailer Joules says it wants a larger slice of the US market

after resilient full-year results. Pre-tax profits rose 14.9pc to £12.9m and sales were up 17pc.

International sales, including the US, accounted for only 16pc of Joules’ £218m revenues.

Sky chief gets

key role at

No 10 under

PM Johnson

By Christopher Williams
and Lucy Burton

BORIS JOHNSON has called on Sky’s
long-standing finance chief, Andrew
Griffith, to forge stronger ties between
No 10 and the business world, in one of
the new Tory leader’s first appoint-
ments as he takes power.
Mr Griffith, who most recently held
the title of Sky’s chief operating officer,
is due to take up his office at Downing
Street today as part of the new adminis-
tration, bringing his two decades of ex-
perience with one of Britain’s most
successful companies.
He told The Daily Telegraph: “The
reality is Boris is very pro-business and
on a personal level he likes spending
time with business.
“This is not about my agenda. This is
about whether I can bring experience
to help deliver Boris’s agenda, which is
a very exciting one.”
The 48-year-old played an informal
role in Mr Johnson’s campaign, provid-
ing his Westminster townhouse as
headquarters.
During his career at Sky, which he
joined in investor relations from the
investment bank Rothschild, Mr
Griffith was responsible for managing
the pay-TV giant’s relationship with
the City.
He also oversaw major deals such as
the £7bn takeover of Sky Italia and
Sky Deutschland, and he was also
closely involved in the sale of the com-
pany to Comcast last year for £30bn in
an extraordinary head-to-head blind
auction.
Mr Griffith was known at Sky for act-
ing as a foil and enforcer for chief
executive Jeremy Darroch, who paid
tribute to his “fundamental role in
many of our proudest collective
achievements”.
His links to the Conservative party
are also extensive. Mr Griffith twice
unsuccessfully stood as a parliamen-
tary candidate for the Corby constitu-
ency and in 2005 he co-authored the
book Direct Democracy alongside

figures such as Douglas Carswell, Dan-

iel Hannan and Jeremy Hunt.

It proposed radical reforms and

modernisation of major British institu-

tions including the NHS, the electoral

system and schools.

The appointment of an experienced

City figure to the heart of government

is designed to signal a shift from The-

resa May’s frosty approach to big busi-

ness. Mr Johnson has already toured

the Square Mile to address concerns

over his own “f--- business” comment.

Mr Griffith’s appointment as busi-

ness adviser is likely to cause concern

at BT, however. At Sky he campaigned

for the former state monopoly to be

broken up to encourage investment in

full-fibre broadband.

During his campaign for the Tory

leadership Mr Johnson pledged to

deliver such an upgrade for all homes

by 2025.

Leading Tory donor Crispin Odey,

the founder of Odey Asset Manage-

ment who backed Mr Johnson during

his leadership bid, urged the City to

view Mr Johnson’s election as “an

opportunity not a nightmare”.

“The best thing about Boris is that

he’s an enthusiast and he’s collegiate

and he steals ideas from anybody,

which is great,” said the hedge fund

boss. “We just had a government that

didn’t know what an idea looked like.”

Others were more circumspect

about the incoming Prime Minister.

Jon Moulton, the former Conserva-

tive party donor and Brexit backer, said

Mr Johnson “sometimes thinks he’s

Winston Churchill and sometimes

Donald Trump” adding “we must hope

for the best”.

Andrew Griffith said

he will use his

experience to deliver

the Prime Minister’s

agenda, which is ‘a

very exciting one’

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