Stories that matter...
Business news around the UK + Podcast + Crypto + Films...
Hello and welcome to the latest edition of Off to Lunch…
Looking at the news across the UK this morning I was struck by the different stories about businesses struggling due to rising costs and the uncertainty in financial markets. When I spoke to Archie Norman, chairman of Marks & Spencer, for episode one of our Business Studies podcast (you can listen to it here) he said that many businesses would not feel the impact of higher energy prices until next year because they had already paid or hedged their bills for 2022. I wonder if you can start to see the impact of this coming through in some of the stories today…
Firstly, there is this Financial Times scoop that Britishvolt is set to enter administration. This is the company building an electric vehicle battery factory - a gigafactory - in Blyth, Northumberland, a vital project for the future of the automotive industry in the UK and levelling up. Britishvolt has struggled to raise new funds amid rising construction costs and a battle to secure firm orders from vehicle makers for its batteries. If the company does enter administration then it is unlikely to be the end of the project. The site is widely regarded to be one of the best, if not the best, available in the UK for a gigafactory due to the access to a port, transport links and sufficient energy to power manufacturing. Jaguar Land Rover is among the companies that have been linked with the site…
85 miles down the coast in Whitby, The Yorkshire Post report that The Star Inn The Harbour is closing its doors. This pub/restaurant is part of a group led by Whitby-born, Michelin-star chef Andrew Pern and has sites across Yorkshire. The story caught my eye because Pern, who is part of the TV chef circuit, has let rip at the local council. He said:
“We could hide behind the effects of the Covid pandemic, which have affected the hospitality industry as a whole across the UK over the past few years.
“But the sad truth is that the single main reason we are closing is the almost utter lack of support we have received from Scarborough Borough Council during Covid - just two months Covid business support.
“The most damaging and miserable fact that marks their card is that they took rent from us and most other businesses in the town during lockdown when we didn’t have a penny coming in - how greedy and shortsighted is that in a place which relies heavily on tourism and hospitality?”
You can read the full story here.
Thirdly, across the other side of England in Cumbria, James Cropper, the paper and packaging maker, has issued a big profits warning. Shares in the company have fallen 15 per cent this morning, valuing it at just over £80 million, after a gloomy update on trading. In a statement to the stock market, James Cropper said that while revenues were up 26 per cent year-on-year, its energy costs have increased by 148 per cent and the cost of its raw materials is up 20 per cent. The company now expects annual profits to be around £2 million rather than the £5.4 million that analysts were forecasting. Mark Cropper, the chairman, said:
“The uncertainty and unprecedented inflationary pressures from rising raw material and energy costs have forced us to revise our profit expectations, despite each division showing strong demand and growth in sales. The paper division has been hit the hardest due to being an intensive energy business, but is successfully mitigating the impact with price increases and increased energy surcharges.”
A piece of good news for businesses importing fuel and materials is that pound has recovered through October after the fateful mini-Budget of September 23. Although it is down 0.7 per cent against the dollar today at $1.153, it has risen by more than 3 per cent so far this month, the strongest performance since July 2020, when it rose by 5.5 per cent, according to data from Refinitiv…
Podcast…
Episode six of our Business Studies podcast launched this morning. It features an interview with former 10 Downing Street special adviser Jimmy McLoughlin on what it’s like working for the prime minister, how government interacts with businesses behind-the-scenes and what qualities stand out in entrepreneurs and chief executives. The episode coincidences with the arrival of Rishi Sunak in Downing Street and the new prime minister has been building his team over the weekend. You can listen to the episode, and all the previous episodes of Business Studies, here
Other stories that matter…
Bloomberg’s Matt Levine has written a 40,000 mini-book on cryptocurrencies. Whether you know nothing about crypto and want to know more, or already invest, it’s a vital read (Bloomberg)
A look at how Elon Musk tries to handle the media - responding to emails himself, cultivating pro-Tesla bloggers and being friends with the boss of Axel Springer and James Murdoch (Semafor)
Sticking with Musk, Tesla held talks about buying a stake of between 10 per cent and 20 per cent in commodities giant Glencore, a key supplier of cobalt. However, talks broke down, with Tesla concerned about Glencore’s coal business and only having a minority stake in the business (FT)
It’s 30 years since the BBC aired Ghostwatch, a drama that became something of a modern-day War of the Worlds because people weren’t sure it was real or not. The show was allegedly banned by the BBC because of the backlash against it (although this was never confirmed) and has become regarded as a cult classic by some. A story I did not expect to link to today, but it’s quite a read… (Radio Times)
Finally, check out Off to Lunch’s Sunday press review for a round-up of the best news and analysis in the weekend papers. You can read it here.
And finally…
I was in Skipton, Yorkshire, at the weekend and recommend a trip to Aagrah for a superb canal-side curry if you are visiting. Aagrah is a chain of nine curry restaurants in Yorkshire and they also have sites in Leeds, Doncaster, Bradford and Wakefield. More here.
On a separate note, I was sent this over the weekend. Has there ever been a better collection of films at the cinema at the same time? Let me know if you think so…
Thanks for reading. I will be back on Wednesday. If you enjoy Off to Lunch then please share it with others and spread the word. If this newsletter was shared with you then please sign-up below to become a member, get Off to Lunch sent directly to your inbox, attend our forthcoming events and contribute to the work of Off to Lunch
Best
Graham