Daily Mail - 04.03.2020

Daily Mail, Wednesday, March 4, 2020^

Hotel chain gambit

BUDGET hotelier Trav-
elodge is targeting job-
less parents to fill 4,000
h o u s e k e e p e r s r o l e s
around the school run.
The employees will
make up rooms at its
new hotels and provide
summer cover. A parent
doing 25 hours a week
can earn £11,300 per
year. Rebecca Baker, of
Travelodge, said: ‘We
have made it our mis-

sio n t o help unem -

ployed parents return

to work and housekeep-

ing is a great route in.’

The move by the firm,

which runs 573 hotels,

comes amid a crisis in

supply of labour. The

minimum wage is rising

and the number of peo-

ple coming to the UK

from Europe could fall

because of new immi-

gration rules.

Director’s Deals

Laxman Narasimhan, 52

Reckitt Benckiser chief executive

THE new boss

of Strepsils

owner

Reckitt

Benckiser

has bought

17,241 shares in the

company for £1m.

Laxman Narasimhan,

who joined last Sep-

tember, paid £58 each.

It comes on top of his

g e n e r o u s g o l d e n

hello, which saw him

scoop over £7.5m in

share and cash awards

to replace incentives

he forfeited on leav-

ing Pepsico.

Since taking over

Narasimhan, 52, has

quietly scrapped the

plans of his predeces-

sor, Rakesh Kapoor, to

split the business and

spin off its hygiene

and home business.

Northern spirit

A WHISKY distillery is

set to open in the far

north of Scotland to

meet demand.

The operation at John

O ’ G r o a t s i s b e i n g

opened by married local

entrepreneurs Derek

and Kerry Campbell,

and is scheduled to

open in 2021, producing

up to 60,000 litres a

year. It will be the first

whisky distillery in John

O’Groats since 1837.

Scotch whisky accounts

f o r a l m o s t £ 5 b n o f

annual British exports,

with 42 bottles shipped

every second in 2019.

Kerry Campbell said:

‘The whisky will be

unlike that from any

other distillery, due to

our coastal location and

the impact the local cli-

mate will have on our

spirit as it matures.’

MEDIA giant Disney has struck a deal

with Sky to make its new streaming

service available in Britain.

Disney, which owns Star Wars, Mar-

vel, Pixar and National Geographic,

will launch Disney Plus in the UK on

March 24. It will be available gener-

ally to the public on the internet.

But the deal means Sky TV custom-

ers can access it through their set-

top boxes. The partners said they had

struck a ‘multi-year’ agreement but

did not reveal details of when it will

expire or how much Sky paid.

It is thought the broadcaster outbid

rivals such as BT and Virgin Media to

seal the deal. Disney Plus is seen as a

major competitor to Netflix, with the

platform lining up a formidable sta-

ble of content for subscribers.

The service will feature content

such as The Simpsons (pictured) and

X-Men, which it acquired from Rupert

Murdoch’s 21st Century Fox last year.

It will cost £5.99 per month. Sky boss

Jeremy Darroch said: ‘We’ve built a

strong partnership with Disney over

three decades and we’re pleased our

customers in the UK and Ireland can

continue to enjoy their content.’

BT probes

Huawei’s

treatment

of workers

BT is probing claims that
controversial equipment
supplier Huawei has been
linked to slavery in China.
T h e t e l e c o m s g i a n t’ s
probe comes after research-
ers claimed subcontractors
were using Muslim workers
in factories where ‘condi-
tions strongly suggested
forced labour’.
Similar conditions were
found in the supply chains
of firms including Apple,
BMW, Gap, Nike, Sony and
Volkswagen, the Australian
Strategic Policy Institute
said. BT was urged to look
into the allegations by Tory
MP Bob Seely, a vocal
opponent of the Govern-
ment’s decision to let Hua-
wei supply kit to the UK’s
5G mobile network.
BT said: ‘Forced labour is
never acceptable in our
own operations or suppli-
ers, and we have engaged
with Huawei in connection
with these allegations.’
The claims have emerged
after China was accused of
persecuting Muslim minor-
ities, forcing them to live in
concentration camps. It is
thought up to 1m people
have been detained.
Huawei said: ‘We require
all suppliers to comply with
international standards
and laws. We have read the
report and are looking into
the matter.’

sky and disney seal deal

for streaming service

t

HE big question about

Covid-19 is: do the authori-

t i e s k n o w s o m e t h i n g

we don’t? This was not

my observation but that of

a U K F T S E 1 0 0 c h a i r m a n

employing 130,000 staff around
the world with a big presence in

the US and China.
The decision of America’s central bank,
the Federal Reserve, to slash its key
interest rate by half a percentage point to
a target range of 1pc to 1.5pc is intended
to be reassuring.
It is a signal that the Fed has the back of
consumers and commerce. Coming as it did
after finance ministers from the G7 leading
nations issued a relatively calm statement,
market operators also might wonder if the
Fed knows something we don’t.
One possibility is that US interest rates
have been unjustifiably high, as Donald
Trump often claims.
With inflation well under control the Fed
acted because it has the room to do so. UK
rates at 0.75pc are much lower, so the scope
for an eye-catching reduction, before the
economy comes juddering to a halt, is more
finely balanced.
The goalposts have moved a long way

since the broader group of G20 finance min-

isters met in Riyadh just a couple of weeks

ago. The International Monetary Fund

claimed the dial on the prospects for global

output had barely moved, and lowered its

official forecast by just 0.1pc.

The OECD has come roaring back and

warned that already feeble output of 2.9pc

for the developed world could be halved to

1.5pc. Given that much of the EU is stag-

nating and Britain is adjusting to Brexit

and Japan is in negative territory, then, at

the very least, large parts of the world could

be heading into recession territory.

Central banks spend a great deal of time,

post the financial crisis, gaming all kinds of

scenarios, from IT meltdowns to housing

market collapses. As far as one knows, a

coronavirus has not recently been on the

menu. This reminds us that you never quite

know where the next shock will come from.

What we do understand is that when the

tide goes out it is much easier to see the

detritus left behind.

One of the enduring big worries about

future risk, which was cited by the IMF in

its Global Financial Stability Report last

autumn, is the extraordinary level of corpo-

rate debt worldwide.

The Fund estimated that the company

debt-to-risk ratio (borrowings by firms una-

ble to cover their interest rate costs with

earnings) could rise to $19trillion (£14.8tril-

lion) this year, or 40pc of outstanding com-

pany debt. That is higher than during the

financial crisis.

So while it is possible to argue that, with

interest rates already at super-low levels, a

cut is not going to encourage consumers to

go and buy a new house or car, it could

mean the difference for companies being

effectively bust or kept on life support.

Last year in the UK the risks of being

over-exposed to debt were starkly demon-

strated when lenders withdrew support

from Thomas Cook.

The problem for publicly quoted compa-

nies, as we saw during and after the finan-

cial crisis, is that most debt is covenant-

heavy. When the share price falls, the

debt-to-equity ratio climbs, and banks get

nervy and call in or decline to renew loans.

That can create a cascade of defaults and

collapses. As a medical event, the worst-

case forecasts for Covid-19 might seem

grossly overdone. But for the markets it is

the real deal.

Australia led the field overnight by cutting

rates and the Fed has played its card. Mark

Carney’s last act as Governor could well be

to follow the leader.

Seasoned Wood

THERE is nothing very impressive, you

might think, about the latest result from

Go Compare, with operational profits down

sharply and revenues flat at £152.4m.

Look underneath the bonnet, though, and

it is possible to see that chairman Peter

Wood’s internally funded drive to grab a

share of a market of 13m energy consumers,

who never switch suppliers, is paying off.

Using the Look After My Bills, Autosave

and Weflip brands, it has grabbed 300,000

customers, 80,000 more than expected.

The big selling point is that the Go Com-

pare site does the job automatically, switch-

ing consumers to the cheapest tariff, with-

out the customer having to do anything

other than supply a meter reading.

Way to go.

virus reveals debt trap

alex

Brummer

City Editor

lidl crowned

the fastest

growing Uk

supermarket

LIDL is now the fastest-growing by Tom Witherow

supermarket in Britain, accord-

ing to the latest market data.

Sales at the German dis -

counter rose by 11.4pc in the 12

weeks to February 23, taking

the top spot for the first time

since 2017, data provider Kantar

said. Ocado, whose home deliv-

ery business is expected to

receive a boost from the corona-

virus outbreaks, saw growth

slow slightly to 10.8pc.

Aldi’s total sales rose 5.7pc,

which handed it a 7.9pc share of

the market.

But in a sign its growth is run-

ning out of steam, analysts at

Shore Capital said sales may be

falling once new store openings

are stripped out.

Sainsbury’s was the only

supermarket among the Big

Four to grow, increasing sales

by 0.3pc. Tesco and Asda dipped

by 0.8pc and 1.2pc respectively

while Morrisons’ sales were 2pc

lower than the same period last

year, and as a result its market

share fell to 10.2pc.

Fraser McKevitt, head of con-

sumer insight at Kantar, said:

‘Sainsbury’s has performed well

this period despite a challeng-

ing market. Lidl has been bene-

fiting from its store expansion

programme for a number of

years. The new locations have

helped to bring in nearly 900,000

additional shoppers.’

The Sainsbury’s boost comes

months before chief executive

Mike Coupe bows out after his

failed merger with Asda.

Overall grocery spend in the

last three months was up by

0.7pc year-on-year, the fastest

rate since November.

Waitrose, owned by struggling

John Lewis Partnership, which

releases its results tomorrow,

s a w i t s s a l e s f a l l 1. 3 p c

year-on-year.

All supermarkets are braced

for the impact of coronavirus

and are expecting an impact.

However firms with a large

delivery network are expected

to benefit, and on Monday

Ocado shares jumped.

Last month, sales of hand san-

itiser increased by 255pc, while

liquid soaps were up by 7pc,

Kantar reported.

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