the times | Wednesday April 13 2022 43
Business
Losses suffered by amateur traders who
were caught out by the period of market
volatility after Russia’s invasion of
Ukraine have boosted revenues at
Plus500 by more than $80 million.
Markets from equities to oil have
swung sharply in the past few weeks,
with investors rushing to respond to the
crisis. The chaos has wrongfooted cus-
tomers of Plus500, the online trading
company, which said yesterday that it
had received an $82.9 million lift from
client bets that had gone awry.
Shell has teamed up with Uniper to
develop a proposed new facility to
make “blue hydrogen” from natural gas
on Humberside.
The British oil giant said it had signed
an agreement with the German utility
group to work on its Humber Hub Blue
project at Uniper’s Killingholme power
station site.
The plant would separate natural gas
into clean-burning hydrogen and waste
carbon dioxide, which would be dis-
posed of under the sea via the proposed
airline, the second-largest behind
Ryanair with more than 300 aircraft in
its fleet, said it was cancelling hundreds
of flights due to high levels of staff
shortages because of Covid. It said
cancellations were being made in
advance “to give customers the ability
to rebook on to alternative flights”.
Lundgren, 55, insisted it was “abso-
lutely not” fair to accuse the airline of
selling flights it could not fulfil. He said
that crew absence levels were double
the normal rate. “We were having in
some cases up to 20 per cent of absence,
and you wouldn’t expect any airline at
any point in time to be able to cover
that,” he said.
He said the number of flight cancel-
lations represented a relatively small
proportion of its total operations,
adding that 94 per cent of its planned
schedule had run in the past seven days.Regulator launches
inquiry on Deloitte
Go-Ahead audits
Louisa Clarence-Smith
Chief Business CorrespondentDeloitte is under investigation by the
accounting regulator for its audits of
Go-Ahead Group, the bus and train
operator found to have hidden and then
failed to pay back more than £25 mil-
lion owed to the taxpayer.
The Financial Reporting Council
announced yesterday that it was in-
vestigating Deloitte’s audits of the ac-
counts of the Newcastle-based group
for the years between 2016 and 2021.
Go-Ahead was issued with a
£23.5 million penalty by the Depart-
ment for Transport last month over the
mishandling of its former London and
South Eastern Railway franchise. The
department said that the former fran-
chise “had deliberately concealed over
£25 million of historic taxpayer funding
relating to HS1, which should have
been returned to the taxpayer”.
Go-Ahead and Keolis, its minority
partner in the operation of Southeast-
ern, were sacked from the contract in
October when it emerged that it had
not repaid subsidies and excess profits
made running its Javelin fast trains on
the Channel Tunnel link between
London and Kent. Ministers found that
Go-Ahead’s Southeastern trains com-
pany concealed information about pay-
ments due and broke contractual trans-
parency and “good faith” agreements.
The accounting failures dated back
seven years to 2014 but the government
only became aware of them last spring.
Go-Ahead said in December that an
independent review revealed “serious
errors” by its London and South East-
ern Railway franchise, which led to it
overcharging the transport depart-
ment in contracts over several years.
Trading in Go-Ahead shares on the
London Stock Exchange was suspend-
ed in January after the discovery and
resumed at the end of February.
Go-Ahead employs more than
27,000 people across its bus and rail
businesses in the UK, Singapore, Ire-
land, Norway and Germany. In Britain
it runs the country’s largest passengerfranchise, GTR, which covers South-
ern, Gatwick Express, Great Northern
and Thameslink. This is managed
through its 65 per cent owned subsidi-
ary Govia, which is 35 per cent owned
by Keolis UK.
The scandal has been a big embar-
rassment to Go-Ahead. An internal
investigation into accounting misman-
agement has been led by Clare Holling-
sworth, Go-Ahead’s chairwoman, and
Sir Derek Jones, chairman of Keolis.
Both were formerly senior civil ser-
vants. Hollingsworth sits on the board
of UK Government Investments and
Jones is a former permanent secretary
to the Welsh government.
Christian Schreyer, chief executive of
Go-Ahead, said this month that he was
confident about the group’s future as he
announced plans to expand the
company’s transport operations andreinstate its pre-Covid-19 dividend
policy. “Go-Ahead’s core strength is in
commuter transport and we see oppor-
tunities to grow by encouraging people
to leave their cars at home, by winning
new contracts and through carefully
selected acquisitions,” he said.
Deloitte is also under investigation
by the regulator for its audits of Mitie
Group, the outsourcer; SIG, the con-
struction materials supplier; and Look-
ers, the car dealership. Deloitte was
fined a record £15 million for “serious
and serial failures” in its audit of
Autonomy, the software company.
A spokeswoman for Deloitte said:
“We will co-operate fully with the
Financial Reporting Council’s investi-
gation. Deloitte is committed to the
highest standards of audit quality.”
Go-Ahead declined to comment.
Shares in Go-Ahead closed up 5p, or
0.6 per cent, to 845p, giving it a market
capitalisation of about £365 million.£25m
Taxpayer aid Go-Ahead failed to return
Source: Department for TransportDiploma credentials soar
in top-class performance
Shares in Diploma jumped by 11 per
cent yesterday after it said its perform-
ance was expected to “materially ex-
ceed” its previous guidance.
The FTSE 250 group, which sources
and distributes specialist equipment,
said that strong trading and recent
acquisitions meant it now anticipated
revenue growth of “a little over 20 per
cent” in the year to September. In
November it had been expecting
growth in the region of 10 per cent.
It disclosed two acquisitions worth
£121 million in the unscheduled trading
update.
Diploma provides specialist wiring
and cabling, industrial seals and gas-
kets, as well as healthcare equipment. It
performed strongly through the
pandemic although shares fell back
sharply at the start of this year.
Yesterday it said that trading so far
this year had been strong thanks to “or-
ganic revenue initiatives, market sharegains and robust demand”. It added:
“Our operating margin performance is
very encouraging as we continue to
navigate inflation, supply chain chal-
lenges and tight labour markets.”
Diploma said it had recently spent
£100 million acquiring R&G Fluid
Power, a “high quality aftermarket
distribution business” in the UK for its
seals division. It said the business had
“significant organic growth potential”.
It also spent £21 million in January buy-
ing LJR Electronics, an American
distributor of connectors.
Diploma said that underlying reve-
nue growth was now “expected to be
low double digit, well ahead of our
model”. In November it had forecast
“mid-single digit underlying revenue
growth”. It said that its operating mar-
gin was now expected to be “at the top
end of the 18-19 per cent range”.
Analysts at Peel Hunt upgraded their
price target for the shares to £38.50
from £35. The stock closed up 288p, or
11.5 per cent, at £28.Emily GosdenHe called on the Department for
Transport to speed up its security
vetting of new employees to enable the
airline to fill some of the shortfall.
EasyJet said it had entered into a sale
and leaseback deal for ten Airbus
A319s, generating total cash proceeds
of $120 million and a loss of about
£20 million during the first half.
Shares in the company rose by 9¾p,
or 1.8 per cent, to 552½p yesterday.Shell to develop blue hydrogen plant
Emily Gosden East Coast Cluster carbon capture and
storage facility. Hydrogen burns clean-
ly and is seen as a crucial part of Brit-
ain’s decarbonisation plans, especially
for heavy industry and transport as well
as potentially for power generation.
The government announced plans
last week for 10 gigawatts of low-carbon
hydrogen production capacity by 2030
— double a previous target and up from
essentially zero at present. Shell and
Uniper’s project would be up to
720 megawatts capacity.
Low-carbon hydrogen can be made
with zero emissions by splitting water
through renewable-powered electroly-
sis, creating “green hydrogen”, or with
low emissions by splitting natural gas
and capturing the waste carbon diox-
ide, producing “blue hydrogen”.
Carbon capture and storage techno-
logy necessary for blue hydrogen pro-
duction is still in its infancy in Britain
but the government is aiming for two
industrial carbon capture “clusters” to
be up and running by the mid-2020s.
Last year it selected the East Coast
Cluster on Teesside and the Humber
and the HyNet project in the northwest
as its priorities for initial funding.Volatility proves a big plus for online trader
Ben Martin Banking Editor The FTSE 250 company, which is
based in Israel, is a seller of complex
derivatives called contracts for differ-
ence, which allow have-a-go traders
to place bets on price movements
in markets from foreign exchange to
cattle futures.
These derivatives let users increase
the size of their wagers using leverage,
that boosts their returns from profitable
trades but also means they face heavier
losses if bets go wrong. Seventy-three
per cent of Plus500’s retail customers
lose money using the derivatives.
Plus500 only hedges some of its
exposure to its customers’ trading
positions, so during periods of extreme
volatility it potentially receives a boost
if many of its clients lose money.
Plus500 said its revenues had risen
33 per cent to $270.9 million in the first
quarter, higher than the $150 million
forecast by City analysts, as traders
rushed to try to profit from the volatility
caused by the war. Earnings before tax
and other charges also rose by a third to
$161.6 million. The company now ex-
pects revenues for the full year to beat
market expectations. The shares were
up 91p, or 6.2 per cent, to £15.70.AMER GHAZZAL/ALAMY