Most people don’t get the chance to break records. So, how lucky for Sir Philip Green that his big opportunity has now arrived — and not even for having the world’s biggest boat or F-word collection.
No, the errant knight of BHS fame is shooting for something more awesome still: a deal with the Pensions Regulator to trump that of Coats, the threads expert that’s just proved what it’s actually like to “sort” a pension fund.
Having been sat on by the regulator’s boss, Lesley Titcomb, Mike Clasper, Coats chairman, has finally squealed. The result? A record settlement to fix two of three pension funds, covering 85 per cent of the liabilities: an upfront £256 million to help plug a £480 million hole and annual payments of £14.5 million to 2028.
The deal brings relief to 23,000 pensioners in the Coats and Brunel plans, while proving the regulator’s not only got teeth but is prepared to use them on solvent businesses — unlike the usual Lehman/BHS fare. And it brings a sorry saga to a near-close. It dates back to 2011 when Guinness Peat Group, the company now known as Coats, flogged off its other businesses to focus on threads. It wound up with proceeds of £698 million, which it breezily intended to return to shareholders. But, after the first £162 million, the regulator stepped in: it reckoned much should go into the pensions.
When Coats refused to play ball, the regulator issued the sort of warning notice now in the mitts of Sir Phil. Coats got its first one in 2013, highlighting how long these capers can last. In December 2014, Mr Clasper was still complaining it was “extremely disappointing” to have been sent such a notice over a scheme “for which a recovery plan was agreed with the trustees in 2013”. Now, the ex-BAA and HMRC boss seems to have changed his tune, declaring the deal a “good outcome for all parties involved”.
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True, Coats still has to square the trustees over the third, Staveley, scheme, with 3,700 members and an £85 million deficit. The Financial Reporting Council is also poking around the group’s pensions from 2004 to 2012. Yet at least Coats can now restart dividends: a reason the shares jumped 9 per cent to 50¼p.
But where does it leave Sir Philip and the 20,000 BHS pensioners he’s left with a £571 million pension fund hole? Well, unlike Coats, BHS is bust. And, crucially, he’s not prepared to offer the same sort of “covenant support” or guarantees that would involve putting his Arcadia business behind any deal.
So, all the regulator can really demand is a massive cheque. Yes, a dose of Trumpflation may help get the deficit figure down. But Ms Titcomb must know what her job is: putting Sir Phil in the record books.
Rat-like cunning
No one’s as partial to a rat as Andy Ransom, the Rentokil Initial boss. And if not rodents, cockroaches and wasps. So, no wonder he’s doing everything he can to spend even more time with all his favourite creatures.
Mr Ransom’s just brought in an upfront €520 million cash from a joint-venture deal with Haniel, a family owned outfit from Germany. In return for the cash, a fixed annual dividend of €19 million for five years and an 18 per cent stake in the joint venture, Rentokil is injecting in its workwear and hygiene businesses in ten European countries. It’ll combine them with those in Haniel’s CWS-boco business, an operation that should really be called CWS-boho, given its thrilling ranges of overalls, hair nets and RABC-certified togs (that’s risk analysis biocontamination controlled, for all non-fashionistas).
The upshot? Mr Ransom now has some extra loot to spend on rats, or at least the companies that go around doing them in. He’s pretty much doubling his usual spend on bolt-on buys, not least in the US and Asia, to £100 million for next year — all welcomed by the market, as the 4 per cent rise in the shares to 220p implied. Rodents weren’t as chuffed, of course. But you can’t please everybody.
End-to-end stuff
Lots of people missed it at the time. So how nice of France’s Loxam and Belgium’s TVH to have a go at recreating June 2015’s football friendly at Stade de France, with a bid for Lavendon. The match ended in a 4-3 triumph for Belgium, all the more memorable because Marouane Fellaini actually scored two goals — in the right net.
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Sadly, the mop-topped giraffe was unavailable on this occasion. So, what better replacement than a nice cherry-picker, similarly mobile and even better on the ball? Anyway, keeping up with what’s going on is a little tricky, except this time it seems to be an even higher scoring affair.
TVH set the ball rolling at 205p-a-share to nil, since when Loxam made it 220p-205p, before the Belgians fought back to 230p-220p. Now the French are back on top at 250p-230p. And guess what? The crowd’s clearly expecting at least one more goal, given the 8 per cent rise in Lavendon shares to 260¼p. Either that, or the Belgian cherry-picker will get sent off. Hard to tell, given it’s standing in for Fellaini.
Bah, humbug
Nobody ever knows what to get their spouse for Christmas. Take Emma Walmsley, for example. The chief executive designate of GlaxoSmithKline has no doubt been scouring the shops for weeks. But what do you buy a hubby like David Owen who already has such an exciting stockpile of socks?
So, she’s given him 17,849 Glaxo shares, currently worth £272,375, a generous present, if ever, even if a touch unimaginative. Of course, some people say the whole thing’s probably tax-related — the sort, clearly, with no Christmas spirit.