The Times - UK (2020-08-06)

the times | Thursday August 6 2020 1GM 41

Business

The chairman of the water regulator is
joining the board of one of Britain’s big-
gest energy suppliers.
Jonson Cox, who has chaired Ofwat
since 2012, is to become a non-
executive director of Ovo Energy,
which acquired SSE’s household retail
business at the start of this year.
Ovo Energy supplies almost five mil-
lion households and is part of Ovo
Group. It paid an £8.9 million penalty
this year over years of billing issues and
“reckless” disregard for the rules.
Ofgem, the energy regulator, found
that Ovo had “failed to take its regula-
tory obligations seriously”.
Mr Cox’s term at Ofwat was renewed

Nottingham city council has written
down £24 million in investment and
loans it has made to its troubled energy
supplier.
Robin Hood Energy was Britain’s first
council-owned energy supplier when it
was set up in 2015 and now has about
120,000 household customers.
It has been heavily loss-making and
fell £22.5 million into the red in the
2018-19 financial year, while warning
that there were “material uncertainties
which may cast significant doubt about
the company’s ability to continue as a

The competition watchdog has im-

posed a £300,000 fine on JD Sports

over the closure of a store in Wolver-

hampton, which it said breached the

terms of an enforcement order related

to the takeover of Footasylum.

The Competition and Markets

Authority ruled that JD Sports had

breached an enforcement order when

Footasylum served notice with its

landlord in October to break the lease

on a store after an initial enforcement

order on the companies had banned

them from making any changes to

Footasylum’s store footprint without

prior permission.

Only once has the watchdog previ-

ously imposed a fine on the same scale

for an infringement of an enforcement

order.

JD Sports, which has 375 stores in

Britain, bought Footasylum, which has

70 shops, for £90 million last year. In

May the authority blocked the retailers

from integrating their operations and

began a six-month investigation.

JD Sports is appealing against the

decision. Peter Cowgill, 67, its executive

chairman, said that the watchdog’s

analysis was “fundamentally flawed”

and that “in its findings the CMA has

lost sight of its objective to protect con-

sumer interests”.

It maintains that the decision to close

the Wolverhampton store was taken

independently by Footasylum’s man-

agement, “without JD’s knowledge or

involvement”.

Footasylum was able to continue to

operate throughout the period of the

JD Sports gets off

on the wrong foot

with closure fine

Louisa Clarence-Smith order, with its chief executive making

all decisions, apart for some financial

issues for which he needed approval

from JD Sports.

Footasylum told the CMA that it had

already been planning to close the site

before the takeover. That would have

meant it was not part of the enforce-

ment order. However, officials said that

they had not been told that in advance.

A spokesman for JD Sports said: “We

strongly disagree with the CMA’s

decision to fine JD Sports for an alleged

breach of the ‘hold-separate’ order.

“The terms of the order legally oblige

JD and Footasylum to be operated as

separate businesses by separate man-

agement teams, with the consequent

alleged breach relating to an independ-

ent decision made by Footasylum

management without JD’s knowledge

or involvement. We are carefully con-

sidering our options.”

The authority said that the fine was

appropriate, given the “seriousness of

the potential adverse effect on the

merger inquiry” and the financial posi-

tion of JD Sports, including the impact

of Covid-19.

It said that the failure to comply with

the order was “without reasonable

excuse”, while JD Sports has “sufficient

administrative and financial resources”

to ensure compliance with the order.

Pentland, a vehicle controlled by the

billionaire Rubin family, owns 55 per

cent of JD Sports.

The regulator has given JD Sports

and Pentland eight months, rather than

the typical 28 days, to pay the fine, in

light of the challenges caused by the

Covid-19 pandemic.

The boss of Britain’s biggest listed

property company has called on the

government to prioritise the growth of

the logistics sector in its economic

recovery plan.

David Sleath, chief executive of

Segro, said that there had been “a lack

of recognition of the importance of the

sector in getting the economy going”.

He cited issues with obtaining PPE

and virus-testing equipment during the

Covid-19 pandemic as examples of

where supply chains had been “found

wanting”. It should be a signal to the

government, particularly with Brexit

on the horizon, that it needed to “priori-

tise the growth of the logistics sector”,

he said.

He added that light industrial use

should be promoted within city resi-

dential developments through plan-

ning policy, rather than being “shoved

out” far away.

The coronavirus outbreak has accel-

erated the growth of online shopping,

which accounts for nearly a third of all

UK retail sales, compared with 19 per

cent in February, according to the

Office for National Statistics.

Tim Steiner, chief executive of

Ocado and a Segro tenant, said last

month: “As a result of Covid-19, we have

seen years of growth in the online

grocery market condensed into a

matter of months — and we won’t be

Boost logistics to deliver

recovery, says Segro chief

Louisa Clarence-Smith going back.” Dwain McDonald, chief

executive of DPD, another of the

group’s tenants, said that the delivery

company was “experiencing the biggest

boom in online retailing”.

The rise in demand for warehouse

space from online retailers and data

centre operators has helped to propel

Segro to its position as Britain’s largest

listed property company, with a market

capitalisation of £11.8 billion. The value

of its portfolio of warehousing and

logistics assets in the UK and in conti-

nental Europe rose by 0.7 per cent to

£11.2 billion in the six months to the end

of June. The company reported a

6.5 per cent rise in profit before tax to

£140.4 million and raised its interim

dividend by 9.5 per cent to 6.9p a share.

Segro has outperformed its retail and

office property-owning peers during

the pandemic in terms of both valua-

tion and rental income. At the end of

last month, 99 per cent of the £92 mil-

lion of rent due for the second quarter

had been paid.

Segro raised £680 million in an over-

subscribed fundraising in June to invest

in developments and land. It has identi-

fied the potential to increase its

£410 million annual rental income to

£794 million through its existing port-

folio, development pipeline and land

bank.

The shares, which are up 10.7 per cent

since the start of the year, rose a further

24½p, or 2.5 per cent, to 987½p.

Ovo Energy appoints head of Ofwat

Emily Gosden Energy Editor in 2015 and was due to end this year but
was extended in November for another
year until October 2021.
Mr Cox, 65, who was paid between
£125,000 and £130,000 for his role at
Ofwat last year, joined the regulator

after a lucrative career in the private

sector, including a six-year stint at

Anglian Water, in which he is believed

to have taken home £17 million. He

spent his early career with Royal Dutch

Shell and also worked at Yorkshire

Water. He has continued to hold

several private sector roles alongside

his regulatory job, including as an

adviser to I Squared Capital Partners, a

private equity firm, and as a non-execu-

tive director of Energia group.

A spokeswoman for Ofwat said: “In

2018 Jonson relinquished a number of

non-executive directorships to dedi-

cate more time to Ofwat’s price review

and he remains fully committed to his

role as chairman at Ofwat until the end

of his term in October 2021.”

She added that there was no conflict

between the Ofwat and Ovo roles and

that the appointment had been

approved by the permanent secretary

of the Department for Environment,

Food & Rural Affairs.

£17m

Jonson Cox’s Anglian Water earnings

Council loses £24m on its power firm

Emily Gosden going concern”. It launched a review in
mid-January and has hired Deloitte to
advise it on potential options.
Accounts for the council show that of
£40 million in loans, guarantees and
equity invested in the company as of
March 2019, more than £24 million has
since been impaired.
Andrew Rule, a Conservative city
councillor, told the Nottingham Post
newspaper, which first reported the
impairment charge, that the council
had “recklessly risked money from its
reserves to prop up its failing energy
company”.
Since March 2019 the council con-

tinued to loan further funds to Robin

Hood, including £9.4 million in Octo-

ber to fund a payment that it owed

through a green energy scheme. It also

lent it a further £2.7 million in February

and pledged to continue to support the

company with up to a further £12.5 mil-

lion to meet cashflow requirements.

The council said yesterday: “The

decision was taken last Christmas to

bring in a new management team to

stabilise Robin Hood Energy’s finances

and to undertake a strategic review, to

consider all options for the future of the

company. This review will be com-

pleted shortly.”

Middle East and
Europe.
At its last financial
update in September
last year, River
Island revealed that
its operating profit
had fallen to
£35.1 million from
£80.6 million
previously.
Last month, River
Island said that it

would make 250

head-office staff

redundant as a cost-

cutting measure.

Will Kernan, 51,

chief executive, told

staff that the fashion

retailer now had “a

requirement for

some 250 fewer

people in the

business”. The

retailer also

furloughed the

majority of its staff

during lockdown.

River Island is the

latest fashion

retailer to consider a

company voluntary

arrangement or

other form of

administration

because of the

effects of lockdown.

DW Sports collapsed

into administration

this week, while the

family that owns

M&Co is set to buy

back the business

via a pre-pack

administration deal.

The law requires

at least 75 per cent of

creditors to give

their approval for a

company to

undertake a CVA.

Staff at River Island

were told that it

needs about 250

fewer people. It has

suffered from low

sales and shopper

numbers

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