BUSINESS LIVE: Berkeley’s housing market woes; CMA backs aviation watchdog; TRG chair to step down

By Live Commentary

Updated: 08:13 EDT, 8 September 2023

The FTSE 100 is down 0.2 per cent in afternoon trading. Among the companies with reports and trading updates today are Berkeley Group, The Restaurant Group, Heathrow, Computacenter and Harland & Wolff. Read the Business Live blog below.

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Major car maker says it sees petrol vehicles on roads until 2050

Car making giant Stellantis believes petrol vehicles will still be on the road until 2050.

However, it says industry needs to take the necessary steps to contain their carbon emissions until they’re finally replaced by fully electric models, ultimately meaning they will need to run on synthetic ‘e-fuels’.

Chair of Wagamama owner TRG steps down for ‘personal reasons’

The chairman of Wagamama owner The Restaurant Group (TRG) will step down from his role, amid pressure from investors to resign.

The group, which also operates Frankie & Berry’s and Chiquito, cited ‘personal reasons’ as it said Ken Hanna will not seek re-election next January at the company’s annual general meeting.

Petershill Partners shares top FTSE 350 fallers

Computacenter shares top FTSE 350 charts

Berkeley maintains expectations despite housing market weakness

Berkeley Group has upheld annual profit guidance despite the value of home reservations plummeting in recent months.

The blue-chip listed housebuilder anticipates earning at least £1.05billion in pre-tax profits for this year and the next, compared to £604million for the 12 months ending April 2023.

Berkeley told investors on Friday that weaker trading conditions had been offset slightly by a solid opening forward sales position, with more than 90 per cent of turnover for the 2024 financial year exchanged.

How the cost-of-living crisis is forcing Brits to sell their cars

More than 2.8million Britons may have been forced to sell their cars to cope with cost-of-living crisis pressures, a study has claimed.

According to a new survey from Motorway, 11 per cent of Britons may have been forced to sell their motors because of spiralling energy, rent, food and, car costs such as MOTs and petrol.

Standard Life launches annuity as rates recover

Standard Life has launched an annuity deal following a strong recovery in the retirement income they can buy, which has tempted many older savers to give them another look.

This would offer a 65 year old with a £100,000 pension pot living in a medium band postcode around £7,000 a year, with no guarantee period after purchase or inflation protection.

China and Germany slowdown fuels fears of global recession

Storm clouds are gathering over the global economy amid mounting fears over China and Europe – and in particular Germany.

Official figures published in Beijing yesterday showed exports from China – often seen as the workshop of the world – were 8.8 per cent lower in August than in the same month last year.

New investment vehicle to give shareholders access to Lloyd’s of London

A London-listed special purpose acquisition company has moved closer to launching a vehicle designed to give investors access to the Lloyd’s of London insurance market.

Financial Acquisitions Corp said this morning it had established London Innovation Underwriters Limited (LIU), as part of a plan to deploy funds in the historic insurance market and build a reinsurance book with up to £1billion of capacity.

The SPAC intends to combine with LIU and raise a ‘significant sum’ of equity capital on the London Stock Exchange, the statement said, adding a further statement would be made once the combination was entered into.

Berkeley’s London office may be its trump card

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

‘It looks like the recent interest rate hikes pushing up mortgage costs are causing a relative lack of urgency among new buyers as private sales reservations dropped 35 per cent.

‘Pricing’s remained resilient though, due to the constrained supply of new-build and second-hand homes, giving Berkeley the confidence to reiterate its guidance for £1.05billion of pre-tax profits across the coming two financial years, weighted slightly towards the current year. That represents declines of around 10 per cent in consecutive years.

‘In the meantime, Berkeley’s taking action to protect its financial resilience by carefully matching its supply with demand and completely stopping spending on new plots of land. That’s expected to keep net cash at £325million by the end of October, down around 20 per cent since April but should be enough to help cushion the impact of lower sales in the near term.

‘Looking bigger picture, Berkeley’s London focus offers something different to peers, and demand in the capital’s likely to remain more robust than other areas of the country.

‘Add to the mix that the UK housing market’s suffering from a fundamental supply shortage, and the long-term picture doesn’t look so bleak. But in the short term, there’s plenty of stormy clouds for Berkeley to weather.’

Market open: FTSE 100 up 0.3%; FTSE 250 adds 0.2%

London-listed stocks are trading higher thi smorning as easing US bond yields and crude prices offer investors some relief at the end of a rough week for global markets.

Global stock markets have come under pressure this week as a surge in oil prices raised concerns about persistent price pressures and US economic data fed into worries that interest rates will remain higher for longer even as data from elsewhere in the world disappointed.

Oil prices have dipped about 0.5 per cent so far today and US yields have retreated.

Berkeley Group shares are down 0.1 per cent after the house-builder joined sector peers in highlighting a gloomy trading environment in the face of rising interest rates and wider macro economic concerns.

Smurfit plots £15bn merger with US rival WestRock

The London stock market was dealt a fresh blow as Smurfit Kappa announced plans to merge with an American rival.

The FTSE 100 packaging giant, which has its headquarters in Dublin, is in ‘advanced talks’ with Georgia-based WestRock about a mega-deal worth £15billion.

Alchemy Copyrights to buy Round Hill Music Royalty Fund for $468.8m

Alchemy Copyrights has agreed to buy music copyright-focused investment firm Round Hill Music Royalty Fund for about $468.8million,giving it access to songs including Backstreet Boys’ ‘I Want It That Way’.

Shareholders in Round Hill Music will get $1.15 in cash per scheme share, representing a premium of about 67 per cent to the stock’s closing price on Thursday.

Alchemy Copyrights, trading as Concord, is an acquirer of music rights and companies, with transactions spanning recorded music, music publishing and theatricals.

Round Hill Music’s portfolio of music rights comprises 51 catalogues with a collection of more than 150,000 songs, including the Beatles’ ‘She Loves You’.

Pet price probe sparks vet firm share crash

Shares in the UK’s leading listed vet firms plunged after regulators launched a probe into prices.

The Competition and Markets Authority is investigating whether the cost of vet services is fair following concerns that price rises are outpacing inflation.

Shares in Pets at Home closed down more than 9 per cent at 343.2p, wiping £169million off its market capitalisation.

TRG chair to step down

Wagamama owner Restaurant Group’s Chairman Ken Hanna will step down after months of pressure from activist investors to change its management and improve profitability.

Hanna, who took over as the group’s chairman at the start of January 2022, will remain its chair until a successor is appointed.

He had also held the role of chairman at car dealer Inchcape and equipment rental firm Aggreko.

The Restaurant Group management has come under fire from activist shareholders Oasis Management and Irenic Capital Management seeking changes at the company, whose shares lost two-thirds of their value last year.

Melrose chiefs hail GKN deal as they depart five years after controversial £8bn takeover

Melrose boss Simon Peckham boasted his controversial takeover of GKN helped create a British ‘aerospace champion’ – as he announced plans to step down.

Peckham said buying the historic manufacturer for £8billion five years ago has revitalised a ‘fading UK industrial icon’.

However, he did not rule out the business being sold, raising the prospect of a foreign takeover.

CMA backs aviation watchdog over Heathrow pricing row

Britain’s competition regulator has said it provisionally backs the Civil Avivation Authority in most of its decisions over how much Heathrow Airport can charge airlines over the 2024-2026 period, after both airlines and the airport launched appeals.

The Competitions and Markets Authority, the CMA, stepped in to review the CAA’s decision after the cut to charges it proposed for the next three years angered both sides.

Britain’s Heathrow said lower fees would hit investment, while the airlines, British Airways and Virgin Atlantic, said the cuts did not go far enough.

The CMA now has until 17 October to decide whether to allow or dismiss the appeals, it said in its statement on Friday.

;Overall we provisionally consider that the CAA was not wrong in most of the decisions that were appealed to us,’ the CMA said.

Crackdown on the ‘wild west’ cryptocurrency industry is delayed

A crackdown on cryptocurrency has been delayed.

The Financial Conduct Authority said stricter regulation about marketing crypto would come into force next month but firms can apply for more time to comply with rules, such as a 24-hour cooling-off period.

It said companies could be given until January 8. The rules were due to take effect from 8 October.

Berkeley flags housing market woes

Berkeley Group has joined sector peers in highlighting a gloomy trading environment in the face of rising interest rates and wider macro economic concerns, but the high-end housebuilder has maintained its profit guidance.

The FTSE 100 builder reported a 35 per cent slump in underlying private sales reservations in the first four months of its current fiscal year beginning 1 May.

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The ‘hydrogen barrier’ has been broken.

In a watershed moment for aviation, the world’s first piloted flights of an electric aircraft powered by liquid hydrogen have taken place.

H2fly, a developer of hydrogen-electric powertrain systems for aircraft based in Stuttgart, Germany, announced that its HY4 aircraft – fitted with a hydrogen-electric fuel cell propulsion system and cryogenically stored liquid hydrogen – completed four flights, including one that lasted for over three hours.

The hydrogen aircraft took off from Maribor in Slovenia and ‘saw safe and efficient operation throughout multiple flight tests’, H2fly said in a statement.

It continued: ‘Results of the test flights indicate that using liquid hydrogen in place of gaseous hydrogen will double the maximum range of the HY4 aircraft from 750km (466 miles) to 1,500km (932 miles), marking a critical step towards the delivery of emissions-free, medium and long-haul commercial flights.’

H2fly, a developer of hydrogen-electric powertrain systems for aircraft based in Stuttgart, announced that its HY4 aircraft completed four flights, including one that lasted for over three hours. The picture above shows the aircraft during one of these test flights

H2fly explained that compared with pressurised gaseous hydrogen storage, the use of liquified, cryogenic hydrogen enables significantly lower tank weights and volume, therefore leading to increased aircraft range and useful payload.

Professor Josef Kallo, co-founder of H2fly, said: ‘This achievement marks a watershed moment in the use of hydrogen to power aircraft. Together with our partners, we have demonstrated the viability of liquid hydrogen to support medium and long-range emissions-free flight.

‘We are now looking ahead to scaling up our technology for regional aircraft and other applications, beginning the critical mission of decarbonising commercial aviation.’

Airline easyJet and manufacturers Airbus and Rolls-Royce are part of the new Hydrogen in Aviation (HIA) alliance, and are calling for more attention to be given to hydrogen as a way of decarbonising air travel.

The alliance believes the UK can become a global leader in developing hydrogen-powered flights if the Government invests in a 10-year research programme, supports the delivery of infrastructure and ensures the required regulatory regime is in place.

It says hydrogen as an aviation fuel can bring a £34billion annual benefit to the UK by 2050.

The only waste product from using hydrogen as a fuel is water, leading to hopes it could power commercial aircraft without creating carbon emissions.

The hydrogen aircraft (above) took off from Maribor in Slovenia and ‘saw safe and efficient operation throughout multiple flight tests’

EasyJet chief executive Johan Lundgren said: ‘There is no doubt that the UK has the potential to become a world leader in hydrogen aviation, which could bring with it a £34billion per annum boost to the country’s economy by 2050, but in order to capture this opportunity, rapid change is needed and the time to act is now.

‘We must work together to deliver the radical solutions required for a hard-to-abate industry like aviation so we can protect and maximise the benefits that it brings to the UK economy and society and that we know British consumers want to be preserved.

‘HIA looks forward to working with the UK Government to ensure the right funding, regulatory and policy changes are implemented to accelerate the delivery of zero-carbon aviation.’

Professor Josef Kallo, co-founder of H2fly, said: ‘This achievement marks a watershed moment in the use of hydrogen to power aircraft’

H2fly explained that compared with pressurised gaseous hydrogen storage, the use of liquified, cryogenic hydrogen enables significantly lower tank weights and volume, therefore leading to increased aircraft range and useful payload

Airbus chief technology officer Sabine Klauke said: ‘As Airbus continues to mature the aircraft technologies needed to deliver hydrogen-powered flight, a united industry voice is needed to secure a robust ecosystem of renewably sourced hydrogen.

‘Joining our peers from across the UK aviation landscape in a targeted approach to policy and investment action brings us closer to a decarbonised future of flying.’

Rolls-Royce chief technology officer Grazia Vittadini said: ‘Collaboration is key when it comes to achieving our net zero ambitions as an industry, which is why we are proud to be part of the Hydrogen in Aviation alliance.

‘Our contribution to HIA is the capability and experience we have in pioneering new technologies and solutions – we have already tested a modern aero engine on green hydrogen and we strongly believe it is one of the solutions that will help decarbonise aviation in the mid to long-term.’ 

Travel firms: Give aviation watchdog power to fine airlines

• According to the letter, air carriers are ‘routinely failing what’s in their control’ 
• Signatories include the CEOs of Riviera Travel, Love Holidays and Thomas Cook 

By Harry Wise

Published: 08:53 EDT, 21 August 2023 | Updated: 11:27 EDT, 21 August 2023

Holiday companies and consumer groups have written a letter to the Prime Minister calling for the aviation watchdog to be given the power to fine airlines.

They want the UK Government to announce a bill at the upcoming King’s Speech in November granting the Civil Aviation Authority stronger powers to punish air carriers for poor customer service.

Signatories include the chief executives of Riviera Travel, Love Holidays and Thomas Cook, as well as the general counsel of On the Beach and the executive director of the Association of Independent Tour Operators. 

Flight warning: Holiday companies and consumer groups have written a letter to the Prime Minister calling for the Civil Aviation Authority to be given the power to fine airlines 

While some of these issues are outside of airlines’ control, they are routinely failing what’s in their control: to uphold their customers’ legal rights to rerouting and refunds, and provide clear and timely passenger information.

Many Britons have seen their summer holiday plans severely disrupted by strike action, cancellations, and wildfires across popular southern European destinations like Rhodes and Tenerife.

Under current rules, travellers who have their flights axed should either be refunded or rerouted on a separate flight, and compensated for other expenses like food and accommodation.

But according to the letter, airlines are ‘routinely failing what’s in their control,’ including obligations such as providing passengers with ‘clear and timely’ information.

As a result, signatory firm Which? says some holidaymakers are using their savings and overdrafts to fund their journeys, causing a negative impact on mental health.

In a recent survey by the group, 45 per cent of travellers who experienced a delay claimed no airline employees were available to assist them.

This turmoil has also caused difficulties for package holiday providers and third-party firms responsible for flight bookings, who have had difficulty getting back millions in compensation.

Rocio Concha, Which? director of policy and advocacy, said: ‘Thousands of passengers have been subjected to unfair and in some cases unlawful treatment by airlines – and enough is enough.

‘We’re calling on the PM to show he is on the side of holidaymakers by giving the aviation regulator the power to issue substantial fines to airlines when they flout the law.’

In late June, the Department for Transport said the CAA should be allowed more enforcement powers over the airlines it regulates.

But the government has not released a timetable for passing these reforms, raising doubts that it will happen before the next UK general election.

The CAA cannot directly fine an air carrier, so it has to apply to the courts for an enforcement order against them.

Last month, the public body began legal action against Wizz Air following a massive volume of complaints against the budget airline for unpaid refunds.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said airlines are ‘unlikely to be immune the economic backdrop worsens and if the CAA is given new powers to fine if companies don’t fulfil legal obligations, they could be hit with another bout of turbulence’.

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Singapore Airlines has been named the world’s best airline at the ‘Oscars of Aviation’.

The carrier reigned supreme over 325 airlines at the Skytrax World Airline Awards 2023, swapping places with last year’s number one, Qatar Airways, which now ranks second, breaking its seven-year streak in the top spot.

In third place, meanwhile, it’s Japanese airline ANA All Nippon Airways.

The leading UK airline is British Airways, which ranks 18th worldwide – sliding down the ranking from 11th place last year. The number one carrier in North America, meanwhile, is Delta Air Lines, which has climbed the ranks from 24th to 20th worldwide.

Fiji Airways is top in the Australia/Pacific ranking and 15th globally, while Qantas is second in the Australia/Pacific ranking and two places behind in the global list, falling from fifth to 17th.

Singapore Airlines has been named the world’s best airline at the ‘Oscars of Aviation’ and dominated in the first-class categories of the contest – it takes the gong for ‘World’s Best First Class’, the ‘World’s Best First Class Seat’ and the ‘World’s Best First Class Comfort Amenities’. Above is a suite that’s part of the carrier’s first-class offering on A380s

Spacious bathrooms in Singapore Airlines’ first-class A380 cabin feature sit-down vanities

It’s the fifth time that Singapore Airlines has scooped the ‘Airline of the Year’ title in the 23-year history of the awards

Mr Goh Choon Phong, Chief Executive Officer of Singapore Airlines, said: ‘This award is a testament to the indomitable spirit of our people, who worked tirelessly and made many sacrifices to ensure that Singapore Airlines was ready for the recovery in air travel. That has allowed us to emerge stronger and fitter from the pandemic as a leading international airline.

‘Today… we are firmly committed to innovating and investing in industry-leading products and services and ensuring that Singapore Airlines continues to offer our customers a world-class travel experience.’

It’s the fifth time that Singapore Airlines has scooped the ‘Airline of the Year’ title in the 23-year history of the awards, this year announced at a gala ceremony in the iconic Air and Space Museum at the Paris Air Show, with a large number of airline CEO’s, presidents and senior management in attendance.

Singapore Airlines also dominated in the first-class categories of the contest – it takes the gong for ‘World’s Best First Class’, the ‘World’s Best First Class Seat’ and the ‘World’s Best First Class Comfort Amenities’.

Second-place Qatar Airways, meanwhile, reigns supreme in the business-class section of the awards, taking prizes for the ‘World’s Best Business Class’, the ‘World’s Best Business Class Seat’, the ‘World’s Best Business Class Lounge’ – the Al Mourjan lounge at Hamad International Airport – and the ‘World’s Best Business Class Lounge Dining’.

Qatar Airways ranks second in the global airline ranking, breaking its seven-year streak in the top spot

Qatar Airways reigns supreme in the business-class section of the awards, taking prizes for the ‘World’s Best Business Class’. Above is the carrier’s business class ‘Qsuite’ 

The leading UK airline overall is British Airways, which ranks 18th worldwide – sliding down the ranking from 11th place last year. Above is the carrier’s first-class offering 

British Airways has been named as the 10th best airline for families globally 

Tenth place in the global low-cost ranking goes to Jet2.com – making it the best low-cost airline in the UK

Third-place ANA All Nippon Airways also scoops the award for the ‘World’s Cleanest Airline’ for the third consecutive year.

Looking to the rest of the top 10, Emirates ranks fourth overall, while also claiming the gong for the ‘World’s Best Premium Economy Seat’.

Japan Airlines is fifth globally and dominates the economy class categories of the awards, taking the prize for ‘World’s Best Economy Class’ as well as the award for the ‘World’s Best Economy Class seat’.

Turkish Airlines is sixth globally and receives the award for the ‘Best Airline in Europe’. Not only that but it’s been recognised for its ‘very high’ catering standards, snapping up both the ‘Best Business Class Catering’ and ‘Best Economy Class Catering’ awards.

Air France takes seventh place in the global ranking, with the carrier’s first-class offering earning it the gong for the ‘Best First Class Airline Lounge’, ‘Best First Class Lounge Dining’, and ‘Best First Class Catering’.

Eighth place goes to Cathay Pacific, which also takes the crown for the ‘World’s Best Inflight Entertainment’.

In ninth place in the global ranking, it’s EVA Air, which has also won the award for the ‘World’s Best Premium Economy Class’ – the cabin it invented more than 30 years ago.

Tenth place, meanwhile, is handed to Korean Air.

The number one carrier in North America, is Delta Air Lines, which has climbed the ranks from 24th to 20th worldwide. Pictured is a ‘Delta One’ business-class cabin on a Boeing 767

Delta takes the gong for ‘Best Airline Staff Service for North America’

Turkish Airlines is sixth globally and receives the award for the ‘Best Airline in Europe’. Above is the airline’s business class on a Boeing 777 

Turkish Airlines has been recognised for its ‘very high’ catering standards, snapping up both the ‘Best Business Class Catering’ and ‘Best Economy Class Catering’ awards

Moving to the budget airline ranking, AirAsia has yet again been named the ‘World’s Best Low-Cost Airline’, a title it has earned each year since 2010.

Second place in the low-cost ranking is Scoot, which also wins the ‘World’s Best Long Haul Low-Cost Airline’ award, while in third place it’s Indian airline Indigo and Saudi carrier Flynas is fourth.

Spanish airline Volotea is fifth in the low-cost ranking, making it the best budget airline in Europe – ‘one of the most competitive low-cost airline markets in the world’, the awards notes.

Transavia France is sixth in the budget ranking, while U.S carrier Sun Country Airlines is seventh worldwide and the recipient of the ‘Best Low-Cost Airline in North America’ gong for the first time.

Japanese airline ANA All Nippon Airways comes third globally. Above is ANA’s business class offering – a seat known as ‘The Room’, which comes complete with a closing privacy door and aisle access 

Emirates ranks fourth overall, while also claiming the gong for the ‘World’s Best Premium Economy Seat’. Above is the Mail’s Harriet Sime in an Emirates premium economy seat, which she put to the test earlier this year

U.S carrier Southwest Airlines is eighth in the global low-cost ranking, while ninth place goes to Latvian carrier airBaltic, which also snaps up the ‘Best Airline in Eastern Europe’ award.

Tenth place in the global low-cost ranking, meanwhile, goes to Jet2.com – making it the best low-cost airline in the UK.

EasyJet takes 11th place in the low-cost ranking, 12th place goes to Vueling Airlines and Ryanair – which last year ranked as Europe’s number one budget airline – is 13th.

Fiji Airways is top in the Australia/Pacific ranking and 15th globally

Looking at other gongs that have been handed out in Europe, Finnair has been named the ‘Best Airline in Northern Europe’ and the ‘Cleanest Airline in Europe’.

Virgin Atlantic takes home several prizes – the gong for the ‘Best Business Class in Europe’, the ‘Best Premium Economy in Europe’ and the ‘Most Family Friendly Airline in Europe’, a new category for 2023.

Austrian Airlines, meanwhile, snaps up prizes for the ‘Best Airline Staff Service in Europe’ and the ‘Best Cabin Staff in Europe’, and Greek carrier Aegean Airlines has been named the ‘Best Regional Airline in Europe’.

Across the Atlantic, other awards garnered by top-ranking U.S airline Delta include the gong for ‘Best Airline Staff Service for North America’.

Air France takes seventh place in the global ranking, with the carrier’s first-class offering earning it the gong for the ‘Best First Class Airline Lounge’, ‘Best First Class Lounge Dining’, and ‘Best First Class Catering’. Above is the airline’s first-class cabin

Alaska Airlines has been declared the ‘Best Regional Airline in North America’ while Canadian airline Air Transat has been named the ‘World’s Best Leisure Airline’. Air Canada takes the crown as the ‘World’s Most Family Friendly Airline’.

Elsewhere in the awards, Kuwait Airways has been named as the ‘World’s Most Improved Airline’, while Garuda Indonesia has been awarded for having the ‘World’s Best Cabin Staff’.

The winners of the Skytrax World Airline Awards are decided by a huge passenger satisfaction survey. This year over 100 customer nationalities participated in it, with the 2023 Awards based on 20.23million eligible survey entries. The online survey operated from September 2022 to May 2023.

For more information visit www.worldairlineawards.com.