The Times - UK (2021-12-06)

the times | Monday December 6 2021 37

Business

unimpressed with the standards of her

rivals’ services and doubts how profita-

ble they are after the costs of knee-jerk

scaling up during the pandemic.

By comparison, Ocado’s retail profit

rose by 58.3 per cent to £104.1 million on

sales of £1.22 billion in the six months to

end of May. She also claims that Ocado

is “streets ahead” when it comes to

and meet the ambitions of Melanie Smith, its boss

The week ahead

The technology sector may be a

breeding ground for unicorns, but

there are a host of challenges

ahead. On Thursday The Times and

The Sunday Times host a Tech

Summit to address some of the

decisions that business leaders

must make in the regulatory and

commercial areas. These include

the reform of data protection laws

and what they mean for companies

and, with AI being used to nudge

new consumer behaviour, are

ethical concerns about gender and

racial bias valid?

Whatever the size of your

business, there is one aspect that is

common to all: cybersecurity. The

event includes a panel discussion

on fighting targeted phishing

campaigns, thwarting attempts to

breach the corporate network and

the threat of ransomware attacks.

Another panel will discuss the

skills shortage, with technology

jobs now representing more than

10 per cent of all vacancies in the

UK.

Participants include Sebastian

Siemiatkowski, co-founder and chief

executive of Klarna; Catherine

Michel, from Halma; Edwina Dunn,

deputy chairwoman of the Centre

for Data Ethics and Innovation;

Gordon Sanghera, co-founder of

Oxford Nanopore; and Poppy

Gustafsson, of Darktrace.

Register online for the event at

http://www.timestechdigitalsummit.com.

Poppy Gustafsson, chief executive of

Darktrace, will be at the summit

wednesday thursday

tomorrow

There will be all sorts

of one-off numbers

whizzing around

Babcock’s half-year

results as the defence

engineer’s new

management

continues to shake up

and sell off parts of the

business. The City is

expecting underlying

profits of £115 million

on revenues of

£2.22 billion. Net debt

should be about

£1.34 billion, but

analysts in the Square

Mile will want to know

how much cash the

business is burning

through to get an idea

of the health of a stock

that has been falling

steadily since the end

of summer.

Interims Ashtead,

Babcock, Evgen

Pharma, Ferguson,

Kinovo, Mercia Asset

Management, Monks

Investment Trust, SDI,

Solid State, Supreme,

Vianet

Finals Carr’s,

CareTech, Hyve, Ixico,

Paragon Banking,

Premier Miton, Renew,

Schroder European

Reit, Tritax EuroBox

Trading update

British American

Tobacco

Just as it seemed that SSP was

emerging from the pandemic, along

comes the Omicron variant to

subject its share price to a further

bout of severe turbulence. Although

it is still too early to judge the

impact, the big question is whether

it will affect the airport and railway

caterer’s target of approaching full

recovery in 2023. By then it expects

to have more outlets, while

increased leisure travel will offset

the decline in business travel.

The gradual return to work

by commuters is

boosting SSP’s railway

sales, while the

opening up of

international

travel is doing the

same for its

airport

concessions.

Interims Berkeley,

Quiz, Stagecoach

Finals Hardide,

McColl’s Retail, Numis

Corp, SSP, Stock Spirits,

Tui

Profit, something that Rolls-Royce

hasn’t made for a while, is not even

in the lexicon of its trading updates.

Its preferred performance measure

is free cashflow, something it hasn’t

been very good at generating during

the pandemic, either. Given that we

have heard nothing to the contrary

since an update in August, a pre-

year-end trading statement should

see Rolls report £2 billion of cash

burn for 2021. It has said previously

that future cashflows depend on the

return of near-normality to

aviation.

Interims Dr Martens,

DWF, FirstGroup,

Foresight, Frasers,

LendInvest, Moonpig,

DS Smith, Watches

Of Switzerland, JP

Morgan European

Smaller Companies

Trust

Finals On The Beach,

Victorian Plumbing

Trading updates Balfour

Beatty, Rolls-Royce

Holdings, S&U.

The economy is

forecast to have grown

by 0.6 per cent in

October — the same

pace as the previous

month — thanks to

strength in the all-

important services

sector. Services are

tipped to have grown

0.4 per cent month-on-

month, with shortages

of labour and supply

chain disruptions

knocking

manufacturing output.

Capital Economics, the

consultancy, expects

the trade figures to

show a deficit of

£2.4 billion in October,

down from £2.8 billion

in September.

“Export values were

probably subdued in

October amid

continued shortages

and supply disruptions.

But stronger domestic

demand means that

import values could

have eked out another

rise,” Paul Dales said.

Finals Nexus

Infrastructure

Trading updates

Anglo American,

Associated British

Foods

friday

to hungry customers

delivering what customers ordered,

rather than rogue grocery substitu-

tions. For the Christmas season Ocado

has a “centrepiece alarm” that detects if

a customer order is missing a turkey,

meat joint or whole salmon, prompting

an employee to be dispatched on a

moped to find a replacement. “Can you

imagine how upset a customer would

be if we didn’t deliver their turkey for

Christmas? We can’t do that to them.”

As for the new kids on the block, the

rapid delivery start-ups such as GoPuff,

Getir, Zapp and Jiff that have secured

billions from investors and have arrived

en masse on Ocado’s patch, Smith, like

many of her peers, is unconvinced. “I

really struggle to see the route to

profitability and I have a lot of insight

into those economics. With our Zoom

service, we can immediately be profit-

able.” She acknowledges the irony that

profits eluded Ocado Group for most of

its life, because of its intense technology

costs, but highlights that Ocado Retail

is increasing margins significantly

beyond any of its rivals.

The profitability of Ocado Retail

has prompted the City to reassess the

£750 million joint venture. It is seen

increasingly as a pretty good deal for

M&S, whereas previously it was widely

thought that the 137-year-old retailer

had overpaid for playing catch-up in

online groceries. Defying the sceptics,

M&S products have proved to be more

popular than those of the rival Waitrose

and account for 29 per cent of Ocado’s

baskets. As a result, a Deutsche Bank

note recently raised the prospect of

M&S buying out the rest of Ocado

Retail — although there are no talks on

the matter at the moment.

With the busiest weeks of the year

ahead, Smith still has to grapple with

industry-wide labour shortages, infla-

tion and supply chain challenges and a

hangover from the carbon dioxide

crisis of two months ago. She says that

Ocado’s warehouses carry 90,000

grocery lines, more than a large super-

market, so even when there is a short-

age of one item, there is a good chance

there will be plenty of alternatives.

However, Ocado is still getting

only 80 per cent of the CO 2 it

needs for the dry ice in its vans

to keep frozen food cold, while

the cost has risen fivefold. So

it has prioritised the most im-

portant frozen lines — mini

Magnums, fishfingers and

oven chips, because, as its

boss says, “you can’t not sell

mums fishfingers”.

HAMPSHIRE FIRE AND RESCUE SERVICE; OCADO/REUTERS

andmeettheambitionsofMelanieSmith, its bboss

in

M

th

h o M p a b n M R t

change, it does demonstrate the

direction of travel: it is more than

double the number of zero-emission

vehicles that were being sold a year ago.

It also means that pure electric

vehicles are now out-selling diesel by

more than two to one. Within the past

decade, diesel was accounting for

nearly half the UK market.

However, the November figures may

have been flattered by the fact that it

was “a Tesla month”. The elecric car

company tends to ship its vehicles to

Britain once a quarter and November

was the latest month for deliveries. Last

month Tesla made up about 15 per cent

of all the electric cars sold, giving the

automotive disruptor-in-chief about

3 per cent of the total UK market,

higher than a string of established

brands, including Jaguar.

The biggest hot spot for electric take-

up in Britain is Oxfordshire, home to

technology companies and many auto-

motive businesses and containing the

city of Oxford, which has a progressive

zero-emission traffic policy. Nearly one

in every three cars registered in the

county last month were pure electric.

Discovery and BT ‘in talks’ to

link their sports broadcasting

Tom Howard

BT shares will be in focus when the

market opens this morning after

weekend reports that Discovery, the

giant American media group, is in talks

about a joint venture for their sports

businesses.

Such a tie-up would derail a

£600 million deal for BT Sport that

DAZN, the streaming company backed

by Sir Leonard Blavatnik, the billion-

aire, has been working on for months.

The Times reported in September

that DAZN was stepping up efforts to

buy BT Sport in a move that would lead

to it taking over the pay-TV channel’s

rights to show Premier League football

and Gallagher Premiership rugby

union matches.

However, the two sides are

understood to be struggling to finalise

the deal because of snags brought on

by disagreements over commercial

details.

Discovery, which owns the Euro-

sport channels, has put forward an

alternative, according to The Sunday

Telegraph, which BT bosses are said to

be taking seriously. Discovery, which

has the rights to the Olympic Games, is

discussing a joint venture with BT that

would see the pair combine their sports

broadcasting assets. By teaming up,

Discovery has argued that both sides

would be able to cut t costs. The plan

would be for BT eventually to sell its

stake in the joint venture.

A BT spokesman said: “BT can

confirm that discussions are being held

with a number of select strategic

partners to explore ways to generate

investment, strengthen our sports busi-

ness and help take it to the next stage in

its growth.” A spokesman for Discovery

declined to comment.