the times | Friday April 8 2022 2GM 41
Business
FOREST HOLIDAYSCovid-19. We’re continuing to grow our
pipeline through our own research-
and-development efforts, such as our
investigational RSV vaccine pro-
grammes, as well as strategic invest-
ments in companies like ReViral.”
Pfizer will pay “up to $525 million, in-
cluding upfront and development mile-
stones,” it said. The deal is subject to
regulatory approval.
ReViral, previously backed by inves-
tors including Novo Nordisk, the Dan-
ish pharmaceutical group, has four RSV
therapies in its pipeline. Pfizer’s own
RSV candidate is in late-stage studies.
Providing ReViral’s programmes are
successful, Pfizer projected that they
have the potential to generate annual
revenue of $1.5 billion. Shares in the
company rose 4.3 per cent, or $2.29, to
close at $55.16 in New York.
Alex Sapir, chief executive of ReViral,
said: “This acquisition represents a vali-
dation of the deep antiviral experience
of the ReViral team. Pfizer is an optimal
partner given their commitment to
RSV through their ongoing RSV vac-
cine programme.”Corby plant
gets new mill
The owner of the Port Talbot steel-
works will build a new mill at its site in
the East Midlands as part of a multi-
million-pound revamp (Ben Martin
writes).
Tata Steel said yesterday that it
would replace one of its four mills at
Corby, Northamptonshire, where it
processes steel from Port Talbot and
produces tubes used in construction
and engineering. It comes after the
steelmaker set out a plan a year ago to
overhaul the site, which involves build-
ing a new warehouse and moving the
mills closer together.
Tata Steel has now decided that it
would be better off replacing one of the
existing mills with an entirely new one.
The cost of building it — an investment
said to amount to “tens of millions” of
pounds — is thought to be on top of the
£30 million investment that Tata Steel
had already earmarked for the revamp.
Anil Jhanji, 53, Tata Steel’s chief com-
mercial officer, said the overhaul of
Corby, where it employs about 500
people, was aimed at giving its opera-
tions there “the best possible future”.The new boss of the Co-operative
Group is braced for further “shocks”
after a tumultuous year during which
profits were hit by disruption to its
supply chain that coincided with a
systems upgrade in its grocery business.
Shirine Khoury-Haq, who is set to
succeed Steve Murrells as chief execu-
tive after the group’s annual meeting
next month, said that she was prepared
for inflationary pressures to continue
this year amid the war in Ukraine and
the economic uncertainty that is also
facing customers.
The Co-op took a £61.5 million hit
to underlying operating profits in its
food business last year, attributed to
industry-wide supply chain problems,
driver shortages and the weather in the
second half of the year. Its food business
was affected “disproportionately”
because of its focus on the community
convenience market and an operating
model that is reliant on flexibility in the
supply chain.
Group profit before tax fell to £57 mil-
lion from £127 million in 2020, when the
figure was boosted by “unprecedented”
Covid-related sales. However, profits
were still £33 million higher than in
2019, before the pandemic. Group reve-
nue fell to £11.2 billion from £11.5 billion,
but was higher than the £10.9 billion of
sales in 2019.
In response to the supply disruption
and lost sales, the Co-op scaled back its
investment and cut costs. However, net
debt increased to £920 million from
£550 million, which included the cost of
repaying furlough money. It said that
net debt had “improved significantly”
since the end of the year.
The 138-year-old mutual is one of the
world’s largest co-operatives, employ-
ing more than 60,000 people. It has
2,600 shops and supplies more than
8,000 convenience stores. It also has a
funerals division and an insurancebusiness. Khoury-Haq, 57, has been its
chief financial officer since 2019 and is
interim chief executive until her
appointment is formally approved. She
is the first woman and member of an
ethnic minority to run the Co-op,
Britain’s largest convenience retailer.
She said that it was a challenge for the
group to get HGV drivers to transport
products to depots and then to stores.
Russia’s invasion of Ukraine has
disrupted supplies of sunflower oil,
prompting the company to switch to
alternatives such as rapeseed oil.
Animal feed and wheat prices have
been affected, which has had a knock-
on effect on the meat, dairy and bakery
segments. Heavy rain and flooding in
Spain have hit supplies of broccoli,
celery, lettuces and courgettes.
“It impacts not only fresh produce
but ingredients for other things as well,”
Khoury-Haq said. “Compound that
with the cost-of-living issues that
household budgets are facing.”
Difficulties in the supply chain have
been exacerbated by the Co-op imple-
menting its own supply system. It
pushed the button on its upgrade after
the pandemic began to subside, but
then faced the wider upheaval in the
global supply chain. “You try to pick the
most quiet times, which isn’t what we
had,” Khoury-Haq said.
Total sales in its food and wholesale
business fell to £9.1 billion from £9.3 bil-
lion, but that figure was up from
£8.9 billion in 2019.
The Co-op invested £39 million in its
food supply system, including a new
depot that opened this year, and
£140 million in its food store estate,
opening 50 new stores and refitting 87
shops.
Its diverse operations helped to offset
the pressures in its food division,
although revenue in its Funeralcare
business fell to £264 million from
£272 million, reflecting a lower death
rate after the peak of the pandemic.Co-op warns of
further turmoil
as profits slide
Alex Ralphrental agency backed by Vitruvian
Partners, the private equity firm, is
acquiring a majority stake in Forest
Holidays to further its ambition to
become a leading British holiday
group with a range of
accommodation.
The vendors are an investor
group led by Phoenix Equity
Partners and LDC — part of Lloyds
Banking Group — together with
Forestry England, Forestry and
Land Scotland and Natural
Resources Wales. The three
forestry bodies will remain involved
as landlords to the sites.
When Phoenix led the purchase
in December 2017, it paid
this year. The cottage rental group
was itself acquired by Vitruvian in
2019 for an estimated £375 million.
The private equity firm said that the
two businesses would be run
independently by their existing
leadership teams under a newly
formed parent company.
Graham Donoghue, 48, the Sykes
chief executive, said: “It’s a
transformative acquisition for Sykes
which creates a UK-focused, multi-
brand holiday group with market-
leading technology, service and
product. Looking ahead, we’re
ideally placed to fly the flag for UK
tourism and to showcase the very
best our islands have to offer.ӣ110 million for a business that at
the time had nine sites. Today,
Forest Holidays has 12 locations,
with many in national parks and
areas of outstanding natural beauty,
including Loch Lomond and the
Trossachs National Park in
Scotland. A site will open this year
in the Brecon Beacons National
Park in Wales.
Sykes, which takes a commission
on every holiday it sells, was
founded in 1991 by Clive Sykes.
Today it has about 22,500
properties on its books and the
combined group will employ more
than 1,700 staff and will provide
holidays to 2.65 million customersOREST HOLIDAYSForest Holidays is partly owned by
Forestry England and its equivalent
bodies in Scotland and Wales, and
they will remain involvedPfizer agrees $500m deal
to buy British drugmaker
Callum JonesPfizer has agreed to buy ReViral, a pri-
vately held business based in the UK,
for as much as $525 million in an
attempt to gain access to experimental
drugs to treat a respiratory virus.
The US pharmaceutical giant said
the deal was designed to strengthen its
pipeline of treatments. It is its second
acquisition in less than six months after
the $6.7 billion takeover of Arena Phar-
maceuticals in December.
ReViral, founded in 2011, is focused
on discovering and developing antiviral
therapeutics that target respiratory
syncytial virus (RSV), which causes
cold-like symptoms. It is a cause of
pneumonia in young children and the
elderly. It has offices in Stevenage,
Hertfordshire, and in Durham, North
Carolina.
Albert Bourla, chairman and chief
executive of Pfizer, said: “We have a
strong heritage in, and commitment to,
fighting infectious diseases, evidenced
by our delivery of the first authorised
vaccine and oral therapy to combatscrutiny as petrol and diesel prices have
hit record highs amid the war in
Ukraine. Analysis has shown that
competition has lessened, and profit
margins have increased, since Asda’s
takeover by TDR Capital and the Issa
brothers last summer.
Clayton Dubilier & Rice is under-
stood to also be considering offloading
its MFG petrol station business, though
the process is at an early stage.
Morrisons warned this week that
inflationary pressures could hit its sales
and profits.Morrisons owner makes offer
The private equity owner of Morrisons
has offered to sell about 100 petrol
stations to gain approval from the
competition watchdog.
The Competition and Markets
Authority raised concerns last month
that the £7 billion takeover of the
supermarket chain by Clayton Dubilier
& Rice could lead to even higher fuel
prices at 121 locations.
Clayton Dubilier & Rice also owns
MFG, Britain’s largest independent
petrol station chain with 921 forecourts,
while Morrisons has 339 petrol stations.
The risk of a reduction in competition
prompted the regulator to issue an
initial enforcement order shortly after
the deal was completed last October to
ensure that the companies were kept
separate.
The watchdog said that Clayton
Dubilier & Rice had offered under-
takings “which involve divesting petrol
stations” and “considers that there are
reasonable grounds for believing the
undertakings... or a modified version
of them, might be accepted by the
CMA”.
The fuel industry is under particular
Ashley Armstrong
About 100 Morrisons forecourts could
be sold off to ease competition fears