The Times - UK (2022-05-26)

the times | Thursday May 26 2022 43

Business

alternative fundraising to fill the hole. It was revealed by The Times this month that Slater Investments, another big Randall & Quilter shareholder, was opposed to the sale. The in- vestor vote, originally scheduled for last Friday, was adjourned until yesterday to give the insurer time to win over shareholders after the scale of resist- ance to the deal became apparent. A change of heart at Brickell added to Randall & Quilter’s woes. The insurer revealed yesterday morning that it had

David Shearer, Esken’s executive chairman, said: “There is a lot of uncer- tainty around. [Potential investors] are waiting to see results and traction with the numbers.” He said Southend should be seen as a “London overspill” airport that will pick up airline operators and passengers when the capital’s big hubs are back at, or near, capacity. He said Southend was a victim of airlines deciding to concentrate on their existing bases this summer and it is talking with a range of carriers about starting operations next summer. The company, perennially in the red, reported a £34 million deficit for the 12 months to the end of February, eased by profit elsewhere in the group, such as from selling construction waste wood and energy-producing incinerators. 6 The department for transport said it is creating an aviation council to bring airlines and airports to work together on a passengers’ flight charter.

Sale of insurer goes up in smoke

The £482 million takeover of Randall &
Quilter has imploded amid a backlash
from the insurer’s shareholders and a
U-turn by the US investment group
that had wanted to buy the London-
listed company (Ben Martin writes).
Randall & Quilter needed the back-
ing of 75 per cent of its shareholders at
a vote yesterday for the sale to Brickell
to go ahead, but revealed last night that
it had fallen short of that threshold.
Its failure to secure sufficient inves-
tor support came just hours after it re-
vealed to the stock market that Brickell
was also trying to walk away from the
deal, sending the insurer’s shares tum-
bling by 59p, or 42 per cent, to 81p.
Randall & Quilter unveiled its plan to
sell itself to Brickell, which is also its
biggest shareholder, at the start of April
as it sought to shore up its finances. Not
only was Brickell agreeing to take it pri-
vate for 175p a share, but the US group
was also pledging to provide $100 mil-
lion of equity funding to plug a capital
shortfall that Randall & Quilter had
discovered in its finances.
The insurer will now attempt an

received a letter from its suitor alleging that it had breached the terms of the deal. Brickell claimed this gave it grounds to terminate their agreement, which Randall & Quilter disputed. It said last night it would seek to raise about $100 million from a placing and up to $8 million from an open offer. Ala- stair Campbell, senior independent di- rector at the insurer, said: “Our priority now is to secure the funding needed to de-lever our balance sheet and improve our financial profile.”

Grounded Southend airport

aims at revival next summer

Robert Lea

It is the “London” airport that before the pandemic was talking of handling five million passengers a year and more than 30 take-offs and landings an hour. On Wednesday, Southend airport — 35 miles east of the City, and which last year was talking up hopes of getting back to pre-pandemic levels of two million passengers this year — has admitted that this summer it is having to make do with 12 passenger aircraft “movements” a week and just one airline: easyJet, which flies from there to three southern Europe sunspots. Southend is the only airport listed on the stock exchange through its parent, Esken, a company so fraught with bag- gage from its days as Stobart Group that it changed its name to the word for “ascend” in Cumbric English. With no immediate sign of recovery at the airport, the shares are grounded at record lows, closing flat at 8¾p.

A big deal in the City has failed after Randall & Quilter investors resisted a US bid

Prudential has poached Anil Wadhwani from a rival

Prudential has poached a senior executive from a rival in Asia to become its next boss, in a move that cements the FTSE 100 insurer’s swing to the East. Anil Wadhwani, 53, who previously led the Asian business of Canadian insurer Manulife, will take charge in late February 2023, the Pru said yesterday. While its previous chief executives have all been based in London, Wadh- wani will instead run the business from Hong Kong, where the rest of the insurer’s top team are based. The group has been steadily cutting its ties with Britain for years to focus on Asia and Africa, and the appointment of Wadhwani is another sign of its move away from the UK. An Indian educated in Mumbai, Wadhwani has spent about five years with Manulife based in Hong Kong, where the Canadian group has compet- ed with the Pru. Before joining Manu- life in 2017, he spent 25 years at Citi- group, focusing on the American bank’s consumer business, mainly in Asia. He will be paid a salary of about $1.56 million (£1.25 million) by the Pru and will be in line for an annual bonus of as much as $3.1 million, as well as annual share awards worth up to $6.2 million.

Purplebricks has again blamed a sharp slowdown in the number of homes being put up for sale for a £10 million shortfall in revenues last year. In a short stock exchange announce- ment, the online estate agent warned investors that revenue for the year to the end of April totalled about £70 million, compared with £91 million in the previous 12 months. The City had ex- pected revenue would drop last year but had still thought it would come in at nearer to £80 million. The top-line miss will feed down to the bottom line, with Purplebricks now forecasting an underlying loss of £8.8 million for the year — 10 per cent more than analysts had estimated.

Seller shortage hits Purplebricks revenue

Purplebricks, which will publish its full results in July, said its underper- formance was brought on by a 31 per cent drop in net instructions compared with the year before. Between May 2021 and April 2022, its agents helped to sell 40,141 homes. In the year before, they sold 58,043. Founded in 2012, Purplebricks previously charged a fixed fee of £999, or £1,499 in London, regardless of whe- ther a home was sold. However, last summer it started to return fees in full if properties had not attracted an offer within 10 per cent of the valuation. Its shares, which have fallen nearly 80 per cent over the past year, dropped another ½p, or 2.3 per cent, to 18p. Estate agents have been complaining in recent months that there are not

enough homes for sale to keep up with demand, which boomed during the pandemic as people re-evaluated how and where they wanted to live. A profit warning in November, which it also blamed on a shortage of new instructions, knocked a third off the share price, while just before Christmas, it admitted to an embarrassing “process error” in its lettings business. In March, Vic Darvey, its chief executive, stepped down due to “personal circumstances”. He was replaced by Helena Marston, who joined the business as chief people officer two years ago. Her appointment took a while to be signed off by the company’s advisers after it emerged that she had previously declared voluntary bankruptcy, al- though it had since been discharged.

Tom Howard

Pru chooses Asian boss as

it pivots towards the East

Hollywood

Bowl strikes

£21m deal for

Canadian lanes The Pru was founded in London in 1848 before expanding abroad, opening a life branch in India in 1923 and then building businesses in Singapore, Jo- hannesburg and Nairobi in the 1930s. Mike Wells, who retired as chief executive in March after seven years, piv- oted the group towards Asia and Africa. He spun off the Pru’s UK and European businesses into M&G, a separate company with a London listing, in 2019 and demerged Jackson, its American arm, on to the US market last year. The Hong Kong Insurance Authority replaced the Bank of England as the Pru’s lead regulator in 2019 and the company has dual primary listings in London and Hong Kong. It splits its head-office functions between the two cities. The Pru said in February that whoever succeeded Wells would be based in Asia. Its finance chief and chief risk officer are both in Hong Kong. Baroness (Shriti) Vadera, the Pru’s chairwoman,

said: “The board is delighted to appoint Anil following our thorough succession process and the move of the entire senior management team to Asia.” She added that the Pru’s senior bosses, lead regulator and operations “will be geo- graphically aligned”. Yet the Pru’s shares fell 21¼p, or 2.1 per cent, to 987¼p. Analysts at Jefferies said they were “somewhat disappointed by the extended transition period” until Wadhwani arrives next year. The Pru is being run in the interim from London by Mark FitzPatrick, its former finance chief who took charge after Wells stepped down and will leave following the transition to Wadhwani. The Pru also announced yesterday the departure of Nic Ni- candrou, a 13-year veteran of the group who is currently chief executive of Asia and Africa and had been a contender for the top job. His role will no longer exist under Wadhwani and Nicandrou is likely to leave before the new boss joins. The Jefferies analysts said his exit “has the potential to im- pair the intangible benefit of institu- tional memory”.

Ben Martin Banking Editor

B

ritain’s biggest tenpin bowling firm has acquired a business in Canada — its first move overseas (Dominic Walsh writes). Hollywood Bowl yesterday announced the acquisition of Teaquinn Holdings in a deal worth up to C$34 million (£21 million), including a deferred amount of C$3.4 million and an earnout deal for its founder, Pat Haggarty, that crystalises at the end of 2025. The deal includes five large bowling centres trading under Splitsville brand, together with Striker Bowling Solutions, a supplier and installer of bowling equipment to third-party operators. Hollywood Bowl said the deal would enhance its earnings next year while the “highly fragmented and underinvested” Canadian market was “ripe for consolidation”. It had identified a pipeline of acquisitions, with the potential to add ten sites over the next five years. Steve Burns, 46, chief executive, described the deal as “a key milestone”. Some analysts questioned the choice of Canada, but Burns said the market has “many similarities with the UK bowling market”. He acknowledged the challenge of buying a business based 5,000 miles away, but said the quality of its management meant it would need “very little input” from head office and the deal was “a low-cost toe in the water”. Hollywood Bowl reported strong half-year results, even after excluding the VAT benefit on bowling. Revenues were up 36.3 per cent on 2019 levels at £91.3 million, while underlying earnings were 46.8 per cent at £31 million on an adjusted basis. The reinstated interim dividend is 3p. Burns said the company had benefited from the staycation trend, while smaller rivals had been slow to open after the pandemic. Shares in the group, which has 67 venues, rose 2p to 240p.

HOLLYWOOD BOWL

The Times - UK (2022-05-26)

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