The Times - UK (2021-11-10)

the times | Wednesday November 10 2021 39

Business

uction at Pooler, and potentially else-

where. JCB has “plenty of room” in

Georgia, but is also mulling an addi-

tional American factory. A decision will

be made in the coming year.

Many of the machines it makes in

America, such as telescopic handlers,

are fitted with engines and axles that it

manufactures in Britain. Skid-steer

loaders, designed and built in the US,

are powered by engines from Derby-

shire.

In the short term, supply chain issues

are set to persist. Shortages of compo-

nents are holding back production and

executives anticipate disruption until

at least the middle of next year. As they

generating, pro-rata, half as much

power again.

Confirmation this week of £210 mil-

lion of government backing for Rolls’

civil nuclear technology helped to send

its shares up 5¼p, or 3.6 per cent, to

144¾p yesterday, their highest level

since the onset of the pandemic, when

they crashed from 235p to 38p, prompt-

ing a £7 billion refinancing of the group,

including a £2 billion rights issue.

The company has long had the tech-

nology to develop modular reactors,

but successive business and energy

secretaries have kicked a decision into

the long grass. Rolls said that the tech-

nology would help to create tens of

thousands of jobs and that it had

already identified potential locations.

Commercial landlords have missed out

on more than £7 billion in unpaid rent

during the pandemic and have been

told they will be expected to write off

any Covid-related rent arrears if

tenants are struggling to pay.

Owners of offices, shopping centres

and other commercial properties were

owed £6.97 billion as of the end of June,

according to Remit Consulting.

The government stepped in last year

to help out businesses in difficulty

because of the pandemic, ensuring that

tenants that missed rental payments

would not be evicted by their landlord.

That protection runs out next March

and the government has set out new

laws for how landlords and tenants

should resolve outstanding debts. First,

tenants unable to repay arrears in full

should speak to their landlord “in the

is at record levels, boosted by gov-

ernment infrastructure projects and

families splurging on extensions and

swimming pools after lengthy stints at

home.

To cater for all these customers, the

company is planning an extensive in-

crease to its American manufacturing.

At present only a fifth of the units it sells

across the US are built in the country,

but managers on the ground are keen to

change this. Over the next five years

they hope to boost local production

from several thousand units annually

to the low tens of thousands. This

would mean a “significant increase” in

workforce numbers as it boosts prod-

wait, however, they are considering

how best to build their position in a

market that has long been in the

company’s sights.

“I have no doubt in my mind that the

Bamford family will invest in this busi-

ness going forward, because they can

see the trajectory now that it’s on,” Fox-

Marrs, a JCB veteran of three decades,

said.

“I think there’s few things that would

give the chairman more pleasure, to be

honest, than continuing to grow this

business in this market, the US.” This

would “without a shadow of a doubt”

lead to JCB spending nine figures in the

years ahead, he added.

Rolls-Royce shares have reached their

highest level since the Covid-19 out-

break sent the group into a financial

crisis — but it is not the restarting of

the aviation sector that has fuelled the

revival rather than the engineer’s

interest in producing mini-nuclear

power stations.

Rolls-Royce, based in Derby, is

Britain’s leading engineering group,

producing engines for Boeing and

Airbus passenger aircraft as well as

Typhoon fighter jets. It also produces

propulsion systems for Royal Navy

warships and submarines, engines for

Britain’s intercity trains and power

plants for data centres.

Its long-term interest in the nuclear

industry — allied to the power systems

that it designs and manufactures for

nuclear submarines — has led it to

develop small, modular reactors that

can be deployed as local nuclear power

stations.

Costing £2 billion a time and each

capable of producing 470 megawatts of

energy, enough to satisfy the power

needs of a million homes, each Rolls

reactor would cost the tenth of the giant

£20 billion Hinkley Point nuclear

station that is under construction in

Somerset and would be capable of

Diversified Energy has pledged a six-

fold increase in methane detectors after

coming under fire over leaks from its

wells.

Shares in the FTSE 250 group

tumbled by a fifth last month after an

investigation raised concerns over

escaping natural gas — primarily

methane, a potent greenhouse gas —

from its portfolio of more than 60,000

onshore wells in the United States.

Diversified said yesterday that it

would deploy an additional 500 hand-

held methane emissions detection

devices for use by staff monitoring its

wells in the Appalachian region of

northeastern America, after an initial

trial of 100 such devices.

A spokesman said that these would

be used by its team of 1,000 “well

tenders” who together conduct

100,000 site visits per month. The com-

pany said the trials had been “effective

in identifying small emissions for

trained well tenders to eliminate at

little to no incremental cost”, such as by

tightening bolts at the well-head.

Last month’s investigation by

Bloomberg reported finding methane

leaks at “most” of the 44 sites it visited

and raised concerns over disrepair and

rust at some. It also questioned whether

Diversified would have enough money

to fund the eventual decommissioning

liabilities for its wells.

Diversified’s spokesman said that the

company’s efforts to invest more in

environmental initiatives were “well

underway” prior to the Bloomberg

investigation and were not a response

to it. The company has said that the

wells sampled by Bloomberg were less

Methane tests set

to be increased

after leaks report

Emily Gosden Energy Editor than 0.05 per cent of its portfolio — and

that even if the level of emissions was

replicated across all its sites, it would be

“consistent with levels specified in the

company’s public reports”. It added that

it had a “highly successful and well-

funded programme to systematically

retire wells that have reached the end of

their economic lives”.

Diversified was founded in 2001 by

Rusty Hutson Jr, 52, who remains its

chief executive. The company was

listed on Aim, London’s junior stock

market, in 2017 as Diversified Gas & Oil

with a valuation of $87 million, but has

expanded rapidly through acquisitions

and now has a value of £875 million. It

was promoted to the FTSE 250 last

year, changing its name to Diversified

Energy.

The company buys up older wells

from other producers with the aim of

extending their operating lives and has

operations in Kentucky, Louisiana,

Ohio, Pennsylvania, Tennessee, Texas,

Virginia and West Virginia. It reported

revenues of $323 million and a net loss

of $84 million in the six months to the

end of June.

A spokesman for Diversified said that

it had a “zero-tolerance policy” regard-

ing unintended methane emissions,

adding: “We are committed to repairing

all emissions and to documenting and

publicly disclosing the results.”

Hutson said: “Diversified remains

committed to the continuous improve-

ment of our environmental perform-

ance and to outpacing the expectations

of our stakeholders.” The company is

planning to set out further details of its

environmental efforts next week.

Its shares rose by ½p, or 0.6 per cent,

to 103¼p.

Nuclear proposal powers

up revival at Rolls-Royce

Robert Lea Industrial Editor

US ARMY

battle in America

US military has won the attention of industry figures in the country, having previously struggled to make its mark

Landlords expected to write

off £7bn Covid-driven arrears

Tom Howard expectation that the landlord waives

some or all of the rent arrears where

they are able to do so”. The British

Property Federation estimates that an

agreement has been reached in about

80 per cent of cases.

If talks fail, the government has es-

tablished legally binding arbitration to

“help the market return to normal as

quickly as possible”. It also has prom-

ised to protect commercial tenants

from court judgments and bankruptcy

petitions in relation to rent arrears.

Matthew Ditchburn, at Hogan

Lovells, the law firm, said the new

arbitration scheme, designed to bring

tenants and landlords to the negotiat-

ing table, may have the opposite effect:

“Many landlords who want to engage

and negotiate settlements have used

the threat of court action to bring ten-

ants to the table. Now that final remedy

is to go.”

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Climate alert

Sir Martin Sorrell, the

founder of advertising

group S4 Capital,

makes the business

case for acting on

climate change

Ben Wallace, the defence secretary,

right, alongside a model of the reactor