the times | Saturday May 28 2022 2GM 57Business
about what needed fixing. While he will
not be drawn on what he reckons was
M&S’s biggest blunder, he does despair
that “we were the first clothing retailer
to go online in 1999 and we shut it down
in 2000 because we didn’t think it was
going anywhere.
“We didn’t go back online until 2007,
with Amazon, and we had to wait until
2013 to have our own platform.”
Tellingly, one of the things Rowe is
proudest of is sorting out M&S’s CastleDonington warehouse to power online
growth and striking a £750 million joint
venture with Ocado that meant it could
finally sell groceries online.
“I reckon in ten, 20, 30 years’ time,
people will say that the deal is almost as
big as our move from penny bazaars to
high street shops.”
However, Ocado was a black cloud
on Rowe’s last set of results, as M&S
said it would receive only a minimal
profit contribution this year after theonline grocer suffered a softening in
sales. “This is a minor bump, but I think
if you take a long-term view [Ocado] is
only ever going to be recorded as the
right thing to do.”
Still, while there has been consider-
able heavy lifting, Rowe is leaving with
profits 36 per cent lower and the share
price two thirds below when he started,
meaning that M&S is no longer includ-
ed in London’s blue-chip index.
Rowe bristles, but says he believesOne of the country’s biggest estate
agency groups has complained that
solicitors are taking too long to sign off
transactions.
Revenues in LSL Property Services’
estate agency division, which includes
brands such as Marsh & Parsons and
Reeds Rains, fell 9 per cent in the first
four months of the year compared with
the same period in 2021.
Bosses said that the “continuing
industry-wide capacity issues in con-
veyancing” meant that it was taking
longer for its agents to get deals over the
line — and pocket their commission.
Housing transactions last year ran at
their highest level since before the glob-
al financial crisis and solicitors have
been struggling to keep up. LSL is hope-
ful that the backlog will improve over
the coming months and said that its
full-year forecasts for its estate agency
arm have not yet “materially” changed.Despite the delays in completing,
homebuyers seem content to wait
things out. Fall-through rates “remain
at normal levels”, the firm said, mean-
ing that it has a near-record number of
residential sales deals in the pipeline.
Its shares fell 15p, or 4.2 per cent, to
342p yesterday as it cautioned that thismakers would ease back on raising
interest rates aggressively this summer.
Germany’s DAX recorded a weekly
gain of 3.4 per cent while the CAC 40 in
Paris rose 3.7 per cent, also their best
weekly performances since March.
The pound enjoyed its second weekly
rise against the dollar, up 0.2 per cent at
$1.263 yesterday — a gain of 1 per cent
since Monday. The fall in the dollar
helped gold to a second straight weekly
gain with a rise yesterday of 0.2 per cent
to $1,851.30 an ounce.
Investor confidence was boosted by a
£15 billion support package to help Brit-
ish households cope with their energy
bills, which prompted a lift in retail
stocks at Ocado and Marks & Spencer.
Stewart Cook of Berenberg bank said
the rally “feels like a shorter-term
squeeze in underperforming sectors”
rather than “a return to bull markets”.- still guarding M&S fiercely
that improved customer sentiment is
more important than its share price. He
also highlights that his tenure has been
blotted by tumultuous events: Brexit,
the pandemic and now Russia’s inva-
sion of Ukraine. “I can’t control those...
the Brexit vote alone took something
like 20 per cent off our share price.”
He also says that although some
people ask “when are we going to get
back to £1 billion of profits”, that was “an
artificial target, they weren’t sustain-
able”. Indeed, each time the retailer
passed the £1 billion threshold things
quickly unravelled as it paid the price of
short-term decisions. However, Rowe
admits that “it hurt” having to report
the first ever loss in M&S’s long history,
during the pandemic.
In an effort to avoid messy succes-
sion battles that have been part of
M&S’s tapestry, including the three-
way dogfight to replace Bolland, the
company has opted for a triumvirate
led by Stuart Machin as chief executive,
Katie Bickerstaffe as co-chief executive
and Eoin Tonge as chief strategy and
financial officer. “It’s the first time we’ve
had a smooth transition without a
volte-face on strategy,” Rowe says.
However, the unusual approach has
led to accusations that it is a clumsy
attempt to stop Bickerstaffe and Tonge
from quitting. “They’re first-class indi-
viduals all of them,” Rowe says. “M&S is
a big transformation — to have three
brains in front of it is a good thing. I can
promise you that our board and Archie
[Norman] don’t fudge decisions.”
During Rowe’s leadership he has
faced frequent chatter about his rela-
tionship with Norman, the cerebral and
incredibly hands-on former Asda
chairman. “I 100 per cent felt like he
respected me,” says Rowe, slightly
weary of chats about tensions.
“He said in his speech the best two
hours of the week were when we sit to-
gether on a Monday and talk about
business. He is a wonderful chairman
and I can tell you that without him as
chair, I would not have moved as quick
as I have in some things.”
Next up, Rowe, a keen scuba diver,
plans to take some holiday over the
summer, but he makes it clear that he is
“not going to retire, I want to do things,
I’m a pretty active individual”.
There are two big retail vacancies still
open, at Asos and Asda, which Rowe re-
fuses to rule out, although he does say
he would “never do anything to harm
M&S” and would need to think about
what to do next. “But I’m not hanging
up my boots yet.”EY considers
market listing
as part of
big shake-up
Robert MillerEY is exploring a stock market listing or
partial sale of its global advisory
business as part of a radical restructur-
ing that could lead to a huge windfall for
about 12,000 of the firm’s global
partners.
The business, which was formerly
known as Ernst & Young and is one of
the Big Four accountancy groups, along
with KPMG, PwC and Deloitte, is being
advised on its planning by JP Morgan
and Goldman Sachs, according to the
Financial Times.
The banks declined to comment last
night, as did EY.
The firm’s senior partners have yet to
make a proposal to partners on whether
to proceed with a restructuring and
exactly what form it should take.
EY, which can trace its roots back to
the 19th century, employs more than
300,000 people in 150 countries and
provides consulting, audit, tax and ad-
visory services. Last year the global
business generated revenues of $40 bil-
lion. The firm’s advisory arm generated
revenues of $26 billion last year and
employs 166,000 people.
A stake sale or stock market listing
would raise the prospect of a big wind-
fall for EY’s existing partners who own
and run the firm, similar to the initial
public offerings of Goldman Sachs in
1999 and Accenture in 2001.
On Thursday, the accountant con-
firmed that it was in the “early stages” of
separating the audit business from its
higher-margin consultancy arm. “We
routinely evaluate strategic options
that may further strengthen EY busi-
nesses over the long term,” it said.
“We are in the early stages of this
evaluation and no decisions have been
made.”
Britain’s auditors have been under in-
tense scrutiny following the collapse of
BHS, the department store chain, and
Carillion, the construction group.
The Financial Reporting Council, the
accounting watchdog, is investigating
EY for work on the audits of NMC
Health, the former FTSE 100 hospital
operator, and Thomas Cook, the tour
company. Globally, EY has come under
the microscope for its work with Wire-
card, the German payment firm sus-
pected of fraud.Financial stocks help FTSE
shrug off windfall tax raid
Jessica NewmanDelays to house sales hit estate agency
year’s profits would be “slightly behind”
the record £49.3 million it posted last
time around. The warning came about
in part because, like most businesses,
LSL is having to pay more in wages and
energy costs. On top of that, its new
mortgage broking platform, Pivotal
Growth, has not expanded as quickly as
bosses had hoped.
Newcastle-based LSL was formed in
2004 after the management buyout of
Your Move and E.surv Chartered Sur-
veyors from Aviva. It was listed in 2006
and is valued at £360 million.
In the first four months of this year
the group turned over £104.5 million —
in line with a year earlier, when markets
were “buoyant”. Offsetting the weak-
ness in its estate agency unit was a
“strong performance” from the survey-
ing division, where revenue increased
11 per cent year-on-year. City analysts,
who had expected the company to de-
liver a profit of almost £51 million this
year, trimmed back their estimates.Tom HowardThe FTSE 100 enjoyed its best weekly
performance since mid-March after
strong showings by financial stocks
offset a dip sparked by the windfall tax
on energy companies.
The index also hit its highest closing
value since April 21, with a gain yester-
day of 20.54 points, or 0.3 per cent, to
7,585.46, for a weekly rise of 2.7 per cent.
It marks the FTSE’s biggest weekly
percentage and points increase since
the week ending March 18.
The FTSE 250, widely seen as a more
accurate barometer of the health of
corporate Britain, rose 123.78 points, or
0.6 per cent, to close at 20,373.52, for a
weekly gain of 2.7 per cent.
Global equity markets were heart-
ened after minutes from a US Federal
Reserve meeting indicated that policy-6 Investors have backed Home Real
Estate Investment Trust, which bills
itself as a landlord for the homeless,
with an extra £110 million to buy
more houses to let out to charities
and housing associations. This
month the company unveiled plans
to raise £150 million, having already
tapped investors for £600 million
since launching on the stock market
in 2020. Confirming it had pulled in
£263 million, Lynne Fennah, its
chairwoman, said the support was
an “endorsement of Home Reit’s
compelling track record”.