Comments Off on The Gym Group looks to jump into empty space left by Toys R Us
The Gym Group is eyeing soon-to-be empty properties left from a raft of recent UK retailer collapses, the budget fitness chain’s boss said on Tuesday, as he revealed stellar sales growth.
John Treharne said there would “undoubtedly” be scope to open branches at some Toys R Us and Maplin sites which close.
He added: “As more people buy online or move away from the High Street, that creates an opportunity for us.”
His firm wants to open up to 20 sites in 2018, adding to its 128 existing gyms.
Revenues soared 24.3% to £91.4 million in 2017, helped by openings in areas such as Walthamstow and Bloomsbury, and acquisitions.
Membership numbers jumped 35.5% to 607,000 and pre-tax profits rose to £9.2 million from £6.9 million. Average memberships cost £17 a month.
Elsewhere in the fitness industry on Tuesday, Cheshire-founded sportswear retailer Realbuzz, which stocks goods by Adidas and Asics, said it plans to invest £5 million to open 10 London stores before the end of 2018.
It has just inked a deal with listed landlord Shaftesbury to open in Seven Dials in April.
Comments Off on GKN and Melrose throw in kitchen sink to win over City investors
THE GKN-Melrose takeover saga remained on a knife-edge today as both sides tried to convince the City to swing behind them with a string of fresh pledges.
Melrose confirmed a £1 billion promise to the GKN pension scheme to soothe pension trustee concerns.
GKN promised a secondary London listing of shares in its car shaft spin-out with rival Dana.
The £8 billion battle is entering its final stages before a shareholder vote deadline on March 29.
Melrose plans to double the £528 million of pension contributions promised under a rival deal struck by the current GKN management.
It has already earmarked £150 million for the scheme but threw in an extra £300 million today.
Top GKN shareholder Columbia Threadneedle, which owns 3.4% of the company, on Monday swung behind the current management.
Head of UK equities Richard Colwell said: “We are long-term shareholders in both GKN and Melrose. We have been frustrated by the performance of GKN in recent years and this has necessitated fundamental changes in the company.
“After careful consideration, we believe the actions set out by the new team at GKN present the best options for shareholders. Accordingly, we are not accepting the Melrose offer.”
Other investors like Jupiter, Pelham Capital and Sanderson have also turned down Melrose.
Comments Off on Activist Ed Bramson makes shock £1.9bn share swoop on Barclays
Activist investor Edward Bramson made a shock move on Barclays on Monday as he snapped up more than 5% of the bank’s shares.
The intervention sets the scene for a dust-up between one of the UK’s most infamous corporate raiders and one of its most important City institutions.
While the secretive Bramson is unlikely to make public his intentions, the City saw the move as a statement of confidence in the present management, led by chief executive Jes Staley, but warned he could have to take the axe to costs. Shares rose 3.8% to 217p.
Bramson raised £700 million in summer for his latest fund Sherborne, after previously taking stakes in Electra Private Equity and F&C Asset Management. He has invested almost all of that in Barclays and borrowed on top of that to get a 5.16% stake valued at £1.9 billion.
Bramson is already in the money given a likely buy-in price of 180p to 190p.
According to its prospectus, Sherborne planned to invest in a “company which it considers to be undervalued as a result of operational deficiencies and which it believes can be rectified by the Investment Manager’s active involvement”.
That indicates Bramson does not intend to be passive, but it is far from clear what he will demand. Barclays has indicated it intends to ramp up the dividend next year, but may have to accelerate its move.
Sherborne becomes the fourth-biggest investor in Barclays after Capital Group, Blackrock and the Qatar Investment Authority.
Bramson has already met top Barclays executives to discuss recent results.
Miton fund manager Andy Jackson said: “It wasn’t top of my short list but I’m not 100% surprised. It fits the prototype Bramson target.
“I’m not unhappy about it. It’s undervalued and there is potential for streamlining.” Miton backed Sherborne with £4 million and also holds shares in Barclays.
Staley has moved to simplify Barclays, which has underperformed rivals for years. He sold the African arm and wants Barclays to focus on being a player on Wall Street, in the City and on the UK high street.
Bramson is not the first big investor to take an interest. In the summer US hedge fund Tiger Global invested $1 billion in Barclays shares.
Bramson is sometimes dubbed a “corporate raider” given his appetite for boardroom battles.
Comments Off on Lord Mayor backing push to build new Canary Wharf for Chinese government
London’s Lord Mayor Charles Bowman and property supremo Sir George Iacobescu are set to push the case for British firms building Beijing’s answer to Canary Wharf in a trip to China this week.
Sir George’s Canary Wharf Group signed a memorandum of understanding to help develop the vast 100 square kilometres Xiong’an New Area during Theresa May’s January visit to the world’s second-biggest economy.
When completed, the Chinese government is expected to move much of its administrative functions to the area around 100 kilometres south-west of Beijing.
Bowman and Sir George will attend a joint forum with the Governor of Hebei, where the new region will be based, next weekend, attended by Chinese firms and an “extensive” UK delegation ranging from banking to engineering and consultancy firms.
Bowman said: “There are many areas for the UK with China in the construction of Xiong’an. It’s a big, big opportunity and a win-win. Sir George will be with us and he can bring his own expertise to it. We’re working out how we from London and our services offering can help and support in its development.”
Comments Off on Gender pay revelations are sending shockwaves through the City — what's being done to fix it?
Gender pay revelations are sending shockwaves through the City, but it’s the bonus gap that exposes the real cause of the problem. We ask the women at the top what’s being done to fix it
At 9.34am on Tuesday the trading floor at Barclays’ investment bank in Canary Wharf, the beating heart of financial services, is buzzing. Six of the 11 traders on the foreign exchange rates desks are women. Walk around the football pitch-size room and the image is pretty consistent.
This gender parity, however, can be deceptive. Further up the management pyramid in these gargantuan organisations, the reality is different – and the women fewer. Banks, fund managers and accountancy giants are now in the firing line for having one of the worst pay gulfs between men and women of any industry. The full extent of this bleak picture is being laid bare as the Government demands, for the first time, that companies with more than 250 staff publish the gap between pay for men and women by April 5.
Three of Britain’s “big four” banks — Barclays, Lloyds and Royal Bank of Scotland — admitted last month that women are paid on average 32 per cent less than men. HSBC, the fourth major lender, yesterday disclosed the biggest gap at 60 per cent. Figures for the Wall Street giants operating here are expected to be worse. It’s not just pay that is the issue in banking; bonuses see an even greater disparity between men and women. So why are the numbers so bad?
One explanation, and perhaps the most poignant, comes from Jayne-Anne Gadhia, equality crusader and the chief executive of challenger bank Virgin Money where, despite her efforts, women are paid 32.5 per cent less than male colleagues.
“More women than men are employed in financial services but many don’t progress beyond middle management or exit the sector entirely, leaving all the top jobs in the hands of men,” she says.
As a result, the over-representation of women in lower-paid and more junior roles, while men rise in seniority on fatter pay cheques, skews the figures for the entire workforce.
The gender pay gap and equal pay are different: the former is the difference between the average earning of men and women; equal pay is laid down in law and requires companies to pay them the same salary to do the same job.
Traditionally, women have been more inclined to trade pay and career progression for flexibility to either tend to childcare or focus on other needs, leading to the so-called plateau effect. It’s no longer the only explanation, female bankers say, but is part of the problem.
Karen Frank, head of private bank and overseas services at Barclays, fits some of these idiosyncrasies after having climbed the ranks at Goldman Sachs then Barclays. She says she often had to do 24-hour days in the early years. After having children she took a step back and moved from private equity to investment banking, where the hours were slightly better. She warns: “That can be hard for women, particularly early in their careers, when you see the guy that started at the same time on a faster career track because you’ve taken time to start a family.”
Although companies are starting to be more flexible about working patterns, the pressure to deliver still lingers, thinks Sam Smith, founder of City broker finnCap.
She says: “I’ve seen people at very big banks that have been allowed a four-day working week but what happens is… the other people are almost taking the mickey ‘you’re not here, you can’t do that dinner’.”
The lack of role models and active mentoring can trip women up, too. “When women hit tough patches in their careers there aren’t enough role models to give them support, so often they make decisions that are suboptimal,” says Asita Anche, a quant trader and managing director at Barclays.
One markets director at another major investment bank has been trying to add a woman to his three-man team for several weeks but to no avail. Hiring young women, he says, is no easy task. A survey of 20,000 students showed that a gig in financial services after graduation ranked third with men; for women it was the 13th choice. Trumpeting it on university campuses to raise awareness has become the norm for banks that are pushing hard to recruit and nurture the next wave of senior leaders.
But what of the progress so far in the pay gap? Until late last month no major banks had responded to the Government’s demand to publish the figures. . However, of the big four, Barclays broke ranks on February 22 and revealed its figures. It received a torrent of negative headlines. It was soon followed by Lloyds Banking Group and Royal Bank of Scotland. Many employers are still to publish. Across Britain, so far only 2,362 of an estimated 9,000 have done so, with less than three weeks to go.
“Companies should get on with publishing their gaps,” urges Gadhia, whose bank was one of the first companies to report the pay gap voluntarily in 2016. “The problem is too important to be hidden behind PR strategies and delay tactics.” Businesses face fines if they don’t disclose the gap.
Barclays’ UK bank revealed that men were paid on average 26 per cent more than women last year, while the parent firm had a gap of 25.8 per cent. Its international business, which includes its corporate and investment bank, had a 48 per cent gap.
“It’s impossible for any financial institution to quickly unwind 20 years [of] not developing women and to get away from the fact that we don’t have proportionate representation at the top, which creates the disparity,” says Barclays’ Frank.
Like all the big banks, Barclays is trying to remedy that. It recently appointed a gender task force to find and promote more senior women leaders. It offers “unconscious” bias training to its 10,000 employees. It also has an increasingly popular “returnship” scheme to lure well-versed professionals, who took time out of their careers back into work.
Soon after Barclays published, Lloyds said it had a 32.8 per cent pay gulf. Then Royal Bank of Scotland declared its was 37.2 per cent last year. Today, BNP Paribas’s investment bank in London said its pay gap was 38.3 per cent.
The bonus gap at BNP Paribas was 64.6 per cent. This is because the biggest bonuses go to the most senior bankers. Louise Fitzgerald-Lombard, BNP’s UK head of HR, said: “We just don’t have enough women in senior positions.”
Miriam González Durántez, a partner at law firm Dechert and chair of Inspiring Girls, says the Government’s new rules are well-intended but the requirements are too blunt an instrument to paint an accurate picture. She adds: “The first year is, ‘we acknowledge the problem and we own it’; the following year, ‘what have we done to improve it?’”
The methods used by some companies have come in for major criticism. The big four accountancy firms excluded the pay of their more senior staff — mostly men — because they are partners and not technically employees. That made the gap appear far better than it was. After cries of protest some have agreed to revise the figures.
Finance giants JP Morgan and Citi also caused a stir after they both said that the average woman makes just 1 per cent less than the average man. They did this by using “adjusted” figures that take into account the employee’s education or the number of years they have worked for a company. But, under the rules, they must supply unadjusted data by the deadline.
While the Government is forcing disclosure of pay gaps to highlight the extent of the problem, others are encouraging business to hit targets to improve the gender balance. Brenda Trenowden, a senior City banker and global chairwoman of 30% Club, launched a campaign in 2010 for FTSE 100 companies to have a minimum of 30 per cent women on their boards. At the time figure was 12.5 per cent, it now stands at 27.9 per cent. In 2016 she upped the ante, calling on chief executives to set targets for leadership teams below the boardroom level: 33 FTSE 100 and 31 FTSE 250 chief executives have signed up.
The 30% Club is also working with the world’s biggest shareholders in companies such as pension funds and other asset managers to put pressure on the businesses that fail to make visible changes. “If they don’t find they are getting the right answers, they reserve the right to vote against the companies at the annual general meetings,” she says.
Also, thanks to the Women in Finance Charter, launched by the Treasury in 2016 and led by Gadhia, companies that sign it have to come up with a concrete plan to bridge the gender pay gap and report publicly on their progress. More than 200 firms are now on the list.
With the April deadline fast approaching, the City is slowly releasing the figures. It forces transparency and it shows where the gaps are, but let’s face it, the heavy lifting starts now.
Comments Off on Michael Spencer to bow out on a high as City eyes NEX bidding war
Shares in Michael Spencer’s NEX Group rocketed on Friday as the City licked its lips over a bidding war for his trading empire.
The stock jumped 218p, or 33%, to 888.5p — causing the value of the firm soar to £3.4 billion — after it admitted it was in preliminary talks with US exchange giant CME about a takeover.
Sources said Spencer — a former Conservative Party chairman — would hold out for at least £10 a share, which would put a £650 million price tag on his 17% stake and mark an end of an era for the business he founded 30 years ago.
CME — a $56 billion (£40 billion) concern led by American Terry Duffy — is the biggest player in the trading of US Treasury futures and covets NEX’s BrokerTec, which is the world’s largest platform for trading electronic securities.
The potential tie-up between an exchange and an interdealer broker was described as a game-changer by one insider although one unlikely to go unchallenged by rivals.
NEX is being advised by Citi and Evercore and CME by JPMorgan.
Sources said rival exchanges including ICE and the Singapore Stock Exchange are also likely to weigh into the fight although the LSE and Deutsche Börse were less likely to bid.
Analysts at Bank of America Merrill Lynch said: “We think NEX could be an attractive asset for a range of exchange groups. We do not, from the outside, see any big regulatory issues, as NEX’s businesses have few overlaps with the large exchange groups.”
The approach comes just two years after Spencer split the former Icap empire in two, selling the traditional voice-broking business to Tullett Prebon. The deal was widely seen as the trading tycoon tidying up his empire for a sale but few expected a deal to come so quickly. A sale would leave Spencer as part owner of investment bank Exotix and chairman of wine exchange BI.
If CME is successful, it would mark a return to London by the back door for the exchange.
The company, nicknamed the Merc, was best known for its open-outcry pits, where noisy traders in colourful jackets would shout and signal to buy and sell commodities.
Duffy got his start in the pits by trading hog futures in 1980 using money borrowed from his parents. He built the Merc into a giant broker after early adoption of electronic trading.
Comments Off on Business interview: Housebuilding's youthful star Pete Redfern hits back against the industry's critics
Peer inside the High Wycombe headquarters of housebuilder Taylor Wimpey and you might be in some east London start-up.
There’s a funky white-painted break-out area, complete with table tennis, table football and wooden benches. There are also a couple of young workers chatting and sipping coffee by the microwave: not bearded hipsters, but not exactly horny-handed sons of building site toil either.
One wonders what George Wimpey — a heavily moustachioed Hammersmith stonemason who set up the eponymous business in 1880 — would have made of it all. Or Frank Taylor, the Derbyshire lad and eventual peer of the realm who borrowed £400 at the age of 16 to build his first two houses back in 1921, starting the business which would become Taylor Woodrow. Practically the only nod to the company’s heritage on display is a wooden chair in the lobby once sat on by the Queen, no less, on a visit to a Wimpey project back in 1959.
Pete Redfern is the executive who brought the two companies together more than a decade ago — at the preternaturally early age of 36 — under the Taylor Wimpey banner, creating a £6 billion business. As he bounds across the room to say hello, he might have come from the gym, although he’s actually been rehearsing for the company’s recent annual results. There’s no tie — or even a collar — in sight; he sports a slightly crumpled jacket, dark blue chinos and Apple watch.
Despite his relative youth when he landed the top job, 11 years in charge (not to mention five children, from 23 down to just two) has taken a slight toll: he’s balding and sports a light beard streaked with grey. There are a few lines around the 47-year-old’s eyes.
That said, the recent stick the industry has been getting would be enough to turn any chief executive grey. For years the story has been crash and recovery, helped by the Government’s Help to Buy scheme to subsidise the market and kick-start demand.
But the recent success has also brought a heap of public ordure. There’s been accusations of landbanking, and, more recently, outrage over the £100 million-plus share bonus granted to Persimmon’s chief executive Jeff Fairburn, The founder of rival Redrow, Steve Morgan — never one to mince his words — said the fat-cattery was “doing the whole of the industry a complete disservice”.
Redfern is not underpaid by any stretch, picking up £5.4 million in 2015 and £3.8 million in 2016, although he’s nowhere near “doing a Fairburn”. But does he agree with Morgan’s comments? “Steve is Steve,” he shrugs.
He won’t talk about the Persimmon scheme directly, although from his more general comments, the impression is that he’s not a wild fan. “You start from ‘what do I believe is the right thing to do’, to ‘how do I make that work and fit into how I actually run the business, or change the business?’”
Taylor Wimpey’s own particular issue came to the fore last year when the company made a £130 million provision to tackle the issue of buyers saddled with doubling ground rents, rendering their property potentially unsellable. Redfern is on track to sort out the mess: “It was genuinely affecting people’s confidence and how they felt about their home.”
The Help to Buy scheme accounted for 43% of Taylor Wimpey’s sales last year — a whopping 6000 homes. But is it right that chief executives should profit from a state subsidy? Redfern argues the effect is fading. “The argument that it helps most of our [long-term incentive plans] was true for one or two years at the beginning of Help to Buy, but the targets have rebased. The targets move with the reality. That structure is not perfect, but it is as fair and balanced as you’re going to get.”
Redfern has long been a public advocate for slowly killing this gift to housebuilders which the Government has promised to continue until 2021. “I don’t think any industry should want or expect to be dependent on Government support for the long term. I don’t actually massively mind how it is tapered off, although it would be foolish from an industry point of view and a Government and homebuyer point of view to end it overnight.”
The other brickbat being thrown is the accusation of sitting on land which has received planning permission. Tory grandee Sir Oliver Letwin is reviewing how to speed up the pace of delivery of new homes. The landbanking is the big thing that frustrates Redfern: he reckons that out of 500 sites with planning permission which the firm has, it is not building on “one or two”. One of those is a pre-crash city centre scheme “so far under water that it makes no sense”.
“Even in the depths of 2009 we were still opening sites as soon as we got planning permission,” he adds.
One headache are the preconditions needed to begin work — even when planning permission has been granted — ranging from a prosaic road junction study, to the inevitable endangered newts. “Newts are always a particular bugbear because for an endangered species we have a hell of a lot of them on our sites,” he adds wryly.
On top of that, builders are dealing with bigger sites than they used to, he adds, with the pace of development on a site of up to 4000 homes constrained by the rate at which the local market can absorb the homes, not least finding the skills to build them. “We do think it is likely that there will be less people coming in from Europe but it is up to us to sell ourselves better, and do more in training.”
Building 300,000 homes a year, however — the Government’s present ambition — is possible but “will really take some doing”. Planning is better than it was 10 years ago, but will need ringfenced funding, he reckons.
Wimpey is more alive to planning shortcomings than most as it has the biggest stock of “strategic land” (plots without permission) of the major builders. “It also needs — and this is probably the hardest ask — some degree of economic stability throughout that period.”
Fat chance of that with Brexit around the corner, but these are nicer problems to have than when he first took the job on. The top of the market merger in 2007 looked at one stage like one of the most value-destructive deals in history, nearly sinking the firm under £2 billion of debt. At one point, the shares (188p today) were at just 4.7p.
Redfern, still in his mid-thirties, avoided disaster and pulled off a refinancing with a “little bit of brinksmanship and negotiation on both sides”. One board member says of that time that “he kept his head when others were losing theirs. Pete has a very dry sense of humour and does not try to pretend to be anything other than what he is”.
Luckily, Redfern has always had a head for numbers. He took a first in maths at Warwick University and trained with KPMG in the mid-Nineties.
But he always had his eye on business and became finance director of Rugby Cement while still in his twenties. He joined George Wimpey’s UK arm as finance chief in 2001, gaining some early experience of merging companies in the process as Wimpey swept up McAlpine Homes and Laing Homes.
The top job at George Wimpey came in 2006 before the big deal — brokered with his opposite number in a motorway cafe on the M40 — in 2007.
According to one City analyst, he has “unbelievable focus”, and “could probably do more in half an hour than you or me could do in a day”. That could be how he’s found the time to do an Open University history degree on the side and become a trustee of the Crisis homeless charity. He also wrote a Labour-backed report on the decline of home ownership for shadow housing minister John Healey, although its call for a longer-term cross-party approach to housing looks like wishful thinking. As for his own politics, he’s a “pragmatic centrist”.
His other hobby, presumably in the 25th hour of the day, is making furniture: the last thing he made on his lathe was a turned quaich — a Scottish drinking cup — for his second wife as a wedding present. “I like turning because you can make something from scratch in a few hours,” he says.
Carving out a successful housebuilder from near-catastrophe has taken a little longer, but is a testimony to Redfern’s skills as a corporate craftsman.
Comments Off on Thousands of homes could be built on London rooftops, says study
Property developers in Greenwich and Lewisham could be sitting on a land with scope to build nearly 19,000 more homes, a new study has claimed.
Apex Airspace Development, a firm that specialises in building homes above existing ones or above stations, shops and car parks, estimates that 33,900 new apartments could be created in inner London using space on rooftops.
It has identified that Greenwich has the biggest opportunity, followed by Lewisham.
Other boroughs that could have more built above, include Islington (3,380 homes) and Camden (4,960).
Apex’s founder Arshad Bhatti said: “All week at Mipim one common theme has been London’s housing shortage. We need to start being more imaginative and making better use of existing space. That includes looking at more modular construction techniques that minimise disruption and build affordable homes.”
Bishopsgate tower to offer space to start-ups
Nearly 200,000 square feet at the 22 Bishopsgate tower will be made available for small businesses and start-ups, the building’s owner has revealed.
Construction on the 1.3 billion-square-foot skyscraper is due to complete next year. The skyscraper — which will feature London’s first climbing window — replaces a project called the Pinnacle which was halted when funding dried up.
Isabelle Scemama, boss of the building’s new owner, Axa Investment Managers — Real Assets, said her firm plans to put 15% of the space aside for co-working offices which could be run either by Axa or a serviced offices business.
Scemama told the Evening Standard at the Mipim property conference: “It makes sense to have some flexible space because there is strong demand from younger companies that want to be in the heart of the City, but don’t want to commit to long leases.”
Also at Mipim, offices firm Citibase said it plans to quadruple its London sites over the next two years. It currently has nine in the capital.
According to agent JLL, current demand from flexible office firms for new space in London totals 900,000 square feet.
JLL’s Dan Burn said: “Flexible offices and traditional leasing can co-exist.”