38 2GM Tuesday July 28 2020 | the times
Business
Private jet service group
sees route out of storm
Robert Lea Industrial Editor
The world’s biggest servicing operation
for private aviation and business jets
has said trading is beginning to improve
after the depths of the lockdown.
Signature Aviation, the London-
listed company formerly known as
BBA, said flying activity among its cus-
tomers in June was 32 per cent down
year-on-year compared with 77 per
cent in April. It said in a half-year trad-
ing update that like-for-like revenues in
its core businesses were down by 31 per
cent in the year so far, “solely due to the
impact of Covid-19”.
In another sign of gradual recovery, it
said that all its employees in the US,
where it does most of its business, have
returned from government payroll
support arrangements.
There have been hopes that the busi-
ness and private jet market will recovermore quickly than airlines as the corpo-
rate world and the wealthy eschew
scheduled flights. However, with avia-
tion stocks caught in a storm following
local lockdowns and cancelled air
bridges, shares in Signature were on the
slide again. Having traded as high as
327p earlier in the year, the stock
slumped to a low of 142p. A recent rally
was reversed yesterday with the shares
closing down 3p or 1.4 per cent at 223½p,
valuing the company at £1.8 billion.
The group traces its roots to the
Victorian industrial belting company
Willson Cobbett, which became British
Belting and Asbestos. It later became a
specialist in aviation parts and services
and operates from 200 locations
around the world.
Analysts at Peel Hunt, the stock-
broker, said that Signature had
reported a “better than expected
improvement in flying activity.”Investors who bought Boohoo shares
because of its high ethical ratings
missed a “clear red flag” that should
have alerted them to problems in its
supply chain, a leading City broker says.
In a highly critical research note,
Liberum said some of the fast-fashion
Boohoo backers failed to see
‘clear red flag’ on problems
group’s institutional investors should
have queried limited disclosures on the
sources of its cut-price clothing.
The online retailer, whose brands in-
clude Pretty Little Thing, was thrown
into crisis this month by revelations of
working practices at a factory in
Leicester that was packing its garments.
The company has won a loyal follow-ing among ethically minded sharehold-
ers, thanks to rankings on environmen-
tal, social and governance (ESG) stan-
dards. Last month MSCI, the ratings
and index provider, placed Boohoo in
the top 15 per cent of a peer group.
Boohoo’s reputation was called into
question after The Sunday Times re-
ported that workers at a contractor inLeicester packing its clothes earned
£3.50 an hour and that conditions in the
factory were unsafe. Boohoo, one of the
best performing stocks on London’s
junior stock exchange over recent
years, had about £2 billion wiped off its
market value.
Liberum said the system for rating
companies on ESG grounds is full of
loopholes that allow groups to “game”
their ratings. They are free to choose
what data to disclose and if a company
had “something to hide” it would “sim-
ply choose to disclose only favourable
information”, the broker said.
Boohoo has denied knowing about
the alleged working conditions in its
supplier’s factory and there is no sug-
gestion that it made an active decision
not to disclose damaging information.
Citing the Fashion Transparency
Index, which scrutinises 40 top clothes
brands, Liberum said Boohoo “dis-
closed less information than its peers”
in five categories. It was “noteworthy
that the company scored zero points in
the traceability section” and ”simply
did not provide any information that
would have allowed investors and cus-
tomers to trace the origin of its clothes”,
Liverum wrote. By overlooking the
shortcomings in its disclosures, share-
holders had “missed a clear red flag”.
Boohoo was founded in 2006 by
Mahmud Kamani, 55, and Carol Kane,- It has grown rapidly by tapping into
the appetite for fast fashion.
The clothing retailer declared itself
“shocked and appalled” by the allega-
tions and has pledged £10 million to
tighten its supply chain. Boohoo hired
Alison Levitt, QC, to scrutinise condi-
tions in Leicester and brought in
Verisio, an ethical auditor and Bureau
Veritas, the testing, inspection and cer-
tification agency, to map its network of
suppliers. The final results of the in-
quiry will be published next summer.
Some investors have already deliv-
ered their verdict. Aberdeen Standard
Life sold the bulk of its holding, describ-
ing Boohoo’s response as “inadequate
in scope, timeliness and gravity”.
Shore Capital, a stockbroker, warned
that the revelations about Boohoo’s
suppliers could be “penal” if the social
media influencers who promote its
brands “take flight”.
Simon Duke
Staycation
crowd gives
pub group
extra cheer
Tomas Melichar
serves drinks as
the Cat & Mutton in
Broadway Market,
London, reopens