The Times - UK (2022-04-09)

the times | Saturday April 9 2022 53

Business

with more than 20 per cent coming

from viewers outside Scotland.

An acquisition of Channel 4, which

also has offices in Glasgow, would allow

STV to build up its presence in the city

as well as expanding in the rest of the

UK. Another motivator is that further

growth in STV Player would be threat-

ened by a UK rivbal getting hold of All

4, Channel 4’s on-demand service.

sky

An acquisition of Channel 4 would be

an opportunity for Sky to deepen its ex-

isting ties with the broadcaster. Previ-

ous agreements have included a deal

last year to share Formula One motor

racing television rights. Analysts have

competition reasons. If an acquisition

was agreed, she said it was unlikely that

it would result in an in-depth investi-

gation by the Competition and Markets

Authority that could scupper the deal.

stv

A sale of Channel 4 would represent a

big opportunity for the London-listed

producer of Taggart and Rebus, the

crime dramas, as it seeks to accelerate

its expansion outside Scotland.

STV, based in Glasgow, operates the

Channel 3 television licence in Scot-

land. STV Studios, its production

division, makes programmes for other

broadcasters. The STV Player recorded

more than 114 million streams in 2021,

Discovery would be motivated by the

threat of a British player buying

Channel 4, leading to a consolidation

that would make the success of a future

Warner Bros-Discovery streaming

service more challenging.

paramount (owns channel 5)

The American owner of Channel 5 is

tipped as one of the most serious con-

tenders. An acquisition by an existing

public service broadcaster would

alleviate concerns about Channel 4’s

identity and remit in supporting UK

independent producers being threaten-

ed by privatisation. Enders said that

Paramount, formerly known as Via-

comCBS, was an “obvious buyer” for

Reservations at Unite’s student halls

are back to pre-Covid levels, although

the landlord has warned that it may

have to increase rents at its new

developments.

Unite has let 77 per cent of its rooms

for the next academic year. At this point

in 2019, before the pandemic struck,

students had reserved 79 per cent of the

rooms for the coming year. Reservation

rates dropped to 69 per cent at this

point a year ago, with students reluc-

tant to commit to spending thousands

staying on campus if their lectures

might be taught online.

Unite is expecting “reduced disrup-

tion” from A-level grade inflation this

time around. Last year, higher grading

The spread-betting company founded

by Lord Cruddas is on track to deliver

net revenues of £280 million, better

than expected, after receiving a boost

from the market turmoil caused by

Russia’s invasion of Ukraine.

Shares in CMC Markets jumped by

12.8 per cent, or 31p, to 272½p after the

FTSE 250 group told investors that the

past three months had been the

strongest quarter of its financial year,

which finished at the end of March.

It means that CMC’s net operating

income for the year will beat the

£263 million forecast by City analysts

and will be at the top end of the com-

pany’s own guidance of between

£250 million and £280 million.

The performance of the online trad-

ing group, which was founded in 1989,

has been driven by its so-called lever-

Unite makes the grade with

student room reservations

Tom Howard

CMC thrives on turmoil in markets

aged business, which encompasses its

contracts-for-difference and spread-

bet services. These complex derivatives

allow punters to bet on price move-

ments in markets such as currencies,

commodities, equities and bonds.

Spread bets and CFDs are popular

when markets are volatile, because

traders hope to use them to make quick

profits from sudden moves in prices.

They are also risky, with 69 per cent of

CMC’s retail customers losing money

trading with the products. The deriva-

tives allow punters to increase their

positions using leverage, which magni-

fies any profits but also their losses.

Russia’s attack on Ukraine has

created turmoil, the ideal conditions for

derivatives sellers such as CMC to

thrive. Markets from oil to equities have

endured sharp swings since the war

began as traders and investors have

scrambled to react to the conflict. The

outbreak of the coronavirus pandemic

in early 2020 fuelled an extraordinary

boom for the CFD and spread-betting

industry when punters raced to make

profits from wild gyrations in markets

caused by Covid-19.

CMC said that its performance in the

past 12 months represented a record if

the previous year, when Covid-19

boosted its business, was excluded.

Trading revenue from its leveraged

products is expected to be £230 million,

down 34 per cent on the previous year

when it was boosted by the pandemic

but better than the £217 million forecast

by analysts at Jefferies.

Revenues from its non-leveraged

business, mainly the conventional

stockbroking business that CMC runs

in Australia, dipped to £48 million from

£55 million. It expects operating costs

last year to have risen to £173 million

from £168 million.

Ben Martin Banking Editor

led to landlords struggling to let halls

near second-tier universities as more

students got into their first picks. Unite

also said it was easier for overseas

students to travel to the UK this year.

Given the “strong student demand”

expected, Unite is confident 97 per cent

of its rooms will be filled next year, simi-

lar to occupancy rates before Covid.

It indicated that it would look to

increase rents further at some of its new

developments once they were com-

plete to help to “mitigate the impact of

increasing build costs”.

Founded in Bristol in 1991, Unite is

Britain’s biggest student landlord,

letting 74,000 beds across 172 buildings

in 25 towns and cities.

Shares in Unite edged down a penny,

or 0.1 per cent, or 9p, to £11.21.

suggested that Sky could be keen

because it would stop a possible deal

with ITV from monopolising the TV

advertising market. A deal would mean

that Sky could have the leverage to

achieve a better outcome on regulatory

matters. “Some might call it cynical to

suggest that Sky attempt to acquire

Channel 4... so as to leverage a better

outcome on regulatory matters,” End-

ers said, “but others would call such a

move pragmatic.”

investor partnership

Analysts and investment bankers are in

agreement that the only likely buyers

for Channel 4 will already have an

interest in British broadcasting. The

company’s value at present lies in its

brand, its young audience and its profile

as a public service broadcaster.

Yet investment bankers are strug-

gling to put a figure on the company

because of uncertainty about what the

rules will be for the broadcaster after it

is privatised. “Up until now profit is

deployed back into the business and

making content,” one said. “Tech com-

panies of course don’t have to make a

profit, but usually there has to be some

kind of economic basis for a valuation.”

Interest from bidders is also likely to

consider whether key managers can be

retained, including Alex Mahon,

Channel 4’s chief executive.

Another alternative that ministers

may reconsider is a proposal from

Channel 4 to fend off privatisation by

instead allowing the broadcaster to

form partnerships with private inves-

tors. The “intellectual property joint

venture” would invest £200 million a

year in programming; in return, Chan-

nel 4 and the investor would be likely

secure to access to content rights.

Nadine Dorries, the culture secretary,

has rejected the proposal, but it could

be reconsidered amid a backlash from

Tory MPs to the privatisation plans.

ldbe keen

Ukraine war

‘will quicken

transition to

zero carbon’

Robert Lea

Johnson Matthey is the latest company

to warn that the transition to a cleaner

world will come at a cost amid the shock

of the Russian invasion of Ukraine, the

rising cost of raw materials and the dis-

location to supply chains.

The industrial chemistry technology

specialist was demoted from the

FTSE 100 share index late last year

after its surprise decision to abandon

efforts to produce affordable high-per-

formance batteries for zero-emission

cars. However, it remains at the centre

of the automotive industry’s transition

to lower emissions, producing the

materials for catalytic converters,

which make cars more efficient and less

polluting.

In a trading update ahead of the

release next month of its annual results

for the year to the end of March,

Johnson Matthey said: “We expect

continued supply chain disruption for

our automotive customers [and] in-

creased cost inflation, which we will

seek to recover through pricing and

efficiencies... [In the] longer term we

expect the current geopolitical situa-

tion to drive a significant acceleration

towards a net-zero-carbon economy,

with corresponding investment to

position us for the significant growth

opportunities from our sustainable

technology portfolio.”

That confidence in passing on rising

costs to its customers meant the com-

pany was able to say that the City could

keep to its forecasts, which on the basis

of the consensus of analysts’ estimates

suggest full-year operating profits of

about £550 million.

That boosted Johnson Matthey’s

share price, which rose by 70½p, or

3.7 per cent, to £19.65, valuing the

company at about £3.5 billion. Before

the company’s surprise about-turn last

year that it was getting out of battery

development and production, the

shares were above £27.

Liam Condon, 54, a former executive

of Bayer, the German chemicals group,

has come in as chief executive since the

group’s strategic U-turn. He said that he

would present a new strategy next

month, which he described as “a clear

pathway to demonstrate how the group

will create value from the many excit-

ing opportunities we face as the world

transitions to net zero”.

CHANNEL 4

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