Jaguar Land Rover sales jump 22%; 15 Ted Baker stores to close, with 245 job losses – as it happened

Time for a recap…

British carmaker Jaguar Land Rover has credited “improved production and sustained global demand” for a 22% jump in sales last year, including higher sales in the UK and US.

More than 200 jobs are being cut at Ted Baker after the administrators running the retailer, and its landlords, decided to close 15 of its stores.

The head of JP Morgan has warned that we may be entering one of the most dangerous times since the second world war.

In his annual letter to shareholders, Jamie Dimon explained:

The international rules-based order established by the Western world after World War II is clearly under attack by outside forces, somewhat weakened by its own failures and inability to keep up with the increasingly complex world.

Dimon cited the suffering of the Ukrainian people, and the “escalating tragedy in the Middle East”, and warned that America’s global leadership role is being challenged outside by other nations and inside by “our polarized electorate”.

The John Lewis Partnership has appointed the former head of Tesco’s UK operations to be its next chair.

Israel’s central bank has left interest rates on hold at 4.5%.

Global food inflation has dropped to its lowest level since the Ukraine war began, two years ago…..

….while gold has a hit a new record high today.

The high proportion of UK homeowners on fixed-rate mortgages means the Bank of England should be wary of keeping interest rates too high for too long, the International Monetary Fund has warned…..

…while the latest business surveys suggest the UK economy looks to have emerged from recession, as uncertainty drops and growth picks up.

In other news:

Three years after an ill-advised rebranding, asset manager Abrdn has reportedly complained that jibes over its name are ‘corporate bullying’.

According to Financial News, Abdrn’s chief investment officer, Peter Branner, has hit out at criticism of the vowel-lite renaming, saying:

“I understand that corporate bullying to some extent is part of the game with the press, even though it’s a little childish to keep hammering the missing vowels in our name.

“Would you do that with an individual? How would you look at a person who makes fun of your name day in day out? It’s probably not ethical to do it. But apparently with companies it is different.”

As we covered in April 2021, there was pretty widespread criticism – and guffawing – after Standard Life Aberdeen announced it is changing its name to Abrdn – pronounced “Aberdeen”.

Abrdn’s CEO, Stephen Bird, defended the name change, saying it “reflects a clarity of focus”.

But Abrdn’s recent performance has been a bit of a dgs dnnr – shares are down 20% so far this year, and the company reported a 5% drop in operating profits for 2023.

Israel’s central bank has left interest rates on hold, as it continued to target price stability and support economic activity during the Gaza war.

At its latest meeting, the Bank of Israel’s monetary policy committee decided to maintain interest rates at 4.5%. It judged that economic activity and the jobs market continue to “recover gradually”.

But, the BoI also warned that geopolitical uncertainty has increased.

The central bank predicts that Israel’s economy will grow by 2% this year, rising to 5% in 2025.

It says today:

The Bank of Israel Research Department revised its macroeconomic forecast, which based on the assumption that the war will remain concentrated on the southern front, and continue with declining intensity until the end of 2024. For 2025, the assumption is that the war will not have any further direct effects.

Israel’s economy contracted by 5.6% in the fourth quarter of 2023.

The Bank of Israel points out that the supply of labor in the construction industry has been hit by restrictions on the entry of Palestinian laborers from Judea and Samaria and the complete cessation of employment of workers from Gaza, due to the war with Hamas following the October 7 attacks.

A new prize to recognise advances in probability research, which could appeal to number crunchers in the City, will be awarded this summer.

The Paul Lévy Prize in Probability Theory will be awarded to a scientist who has made “outstanding contributions to Probability Theory and its Applications”.

It is being backed by the European Mathematical Society, Ecole Polytechnique, the Foundation of Ecole Polytechnique, and the Lévy family, with financial support from BNP Paribas.

It honours the memory of Paul Lévy, the great French mathematician who was professor at Ecole Polytechnique from 1920 to 1959.

The European Mathematical Society says:

Paul Lévy’s work largely shaped modern probability theory which plays an increasingly crucial role in mathematics, physics, financial mathematics, and many other fields. Paul Lévy introduced such fundamental concepts as local time, stable distributions and characteristic functions.

He made fundamental contributions in the theory of stable and infinitely divisible laws, the theory of Brownian motion, Lévy flights, and many others.

The winner will receive a cash prize of €20,000 (£17,160), making it more lucrative than the current top prize in mathematics, the Fields Medal, which is worth $15,000 Canadian dollars (£8,750).

Top mathematicians can also win the Nobel Memorial Prize in Economic Sciences, for which they receive 11 million Swedish krona (£824,000)….and complaints that it’s not a real Nobel prize etc etc.

The administrators running stricken retailer Ted Baker have announced that 15 of its stores are to close in the coming weeks.

Teneo, who took control of Ted Baker last month, have decided to close 11 of the company’s outlets by 19 April, with the loss of around 120 jobs.

In addition, twenty five head office staff have been laid off, due to a “a necessary reduction in central costs”.

The stores to be closed as part of the administration are:

• Birmingham Bullring

• Bristol

• Bromley

• Cambridge

• Exeter

• Leeds

• Liverpool One

• London Bridge

• Milton Keynes

• Nottingham

• Oxford

Teneo say they have also learned that Ted Baker’s landlords had also served notice on four additional stores: at Bicester, Brompton Road and Floral Street in London, and at Manchester Trafford. That will lead to another 100 job cuts.

Benji Dymant, Joint Administrator, says:

“Ted Baker is an iconic British brand with strong partners around the world.

These store closures, whilst with a regrettable impact on valued team members, will improve the performance of the business, as Authentic continues to progress discussions with potential UK and European operating partners for the Ted Baker brand to bring the business back to health.

We would like to thank Ted Baker team members and partners for their ongoing efforts and support at this difficult time.”

Jaguar Land Rover, Britain’s largest carmaker, has grown its sales by a fifth in the last year, due to “improved production and sustained global demand.”

JLR, which is owned by India’s Tata Motors, reported that its full year retail sales grew by 22% in the 12 months to 31 March 2024, to 431,733 units.

In the last quarter, sales rose by 11% to 114,038; this included a 22% increase in sales of Range Rovers (to 58,280 units), while Defender sales rose 5% (to 28,702 units), Jaguar cars jumped 39% (to 13,528 units). Sales of Land Rover Discovery vehicles rose 1% (to 9,680 units).

JLR says:

Compared to the prior year, retail sales in the quarter were up 21% in North America, 32% in the UK and 16% Overseas.

Compared to the prior year, retail sales in China were down 9% and down 2% in Europe for the quarter.

Last November, JLR reported record revenues, as it recovered from weaker demand in China, the disruption caused by the coronavirus pandemic and a global shortage of computer chips.

Land Rover customers have also struggled to get insurance for their cars, with some claiming that their vehicles are “uninsurable” after being quoted four or five-figure annual premiums.

In response, JLR relaunched its Land Rover insurance scheme to help owners get cover.

Elon Musk has fallen to fourth on the list of the world’s richest billionaires.

Musk was knocked off the podium by Meta’s Mark Zuckerberg, after a drop in Tesla’s share price last week.

Musk’s wealth dropped by $4.5bn on Friday, bringing it down to $181bn, while Zuckerberg gained $5.65bn to $187. That put the Facebook creator third on the list, behind Bernard Arnault ($223bn) and Jeff Bezos ($207bn).

Today could be kinder to Musk, though. Tesla’s shares are up 2.5% in pre-market trading, after he posted on Friday that its long-awaited robotaxi would be revealed in early August:

8 Apr 202407.54 EDT

Kalyeena Makortoff

Jamie Dimon has also used his annual shareholder letter (see earlier post) to hit out at shareholder advisers and special interest groups, who he claims are “hijacking” and having “undue influence” over AGMs.

The JP Morgan boss claims is that they are ultimately making it “less desirable” for companies to go public, telling investors:

“One of the reasons it is less desirable to be a public company is because of the spiralling frivolousness of the annual shareholder meeting, which has devolved into mostly a showcase of grandstanding and competing special interest groups....The annual shareholder meeting itself has become ineffective. We should try to come up with a far more constructive alternative.”

Influential proxy advisers Glass Lewis and ISS get a special mention, both for being foreign-owned, and having too much sway on companies’ largest shareholders, with Dimon saying:

While asset managers and institutional investors have a fiduciary responsibility to make their own decisions, it is increasingly clear that proxy advisors have undue influence.”

“....I should also point out, because it may be relevant, that ISS is owned by Deutsche Boerse, a German company, and Glass Lewis is owned by Peloton Capital, a Canadian private equity firm. I question whether American corporate governance should be determined by for-profit international institutions that may have their own strong feelings about what constitutes good corporate governance.”

One solution? Force institutional shareholders like pension funds and asset managers to reveal when their votes rely on Glass Lewis and ISS recommendations:

“To the extent they use recommendations from proxy advisors in their decision-making processes, they should disclose that they do so and should be satisfied that the information upon which they are relying is accurate and relevant.

However, many companies would argue that this information is frequently not balanced, not representative of the full view and not accurate. In addition, companies complain that they often cannot get the data corrected, and, therefore, a vote may go uncorrected.”

The gold price has hit a new record high today, as investors continue to anticipate interest rate cuts this year… and some central banks add to their bullion reserves.

Gold hit $2,353 per ounce this morning, above last Friday’s peak, extending its rally this year.

It has risen from around $2,000 per ounce at the start of this year. Analysts have attributed the rise to expectations of interest rate cuts (which would reduce the return on cash reserves and government bonds, undermining their attraction versus gold).

Signs that central banks have been increasing their gold reserves, led by China, are another factor, as are geopolitical worries.

View image in fullscreen

Lord Ashbourne, director of energy & resources at Edison Group, says the recent rise in the gold price has definite echoes of the late 1970s, when gold rallied to mult-decade highs, adding:

In fact, we don’t expect the end of the gold market unless real interest rates (ie the difference between interest rates and inflation) reaches 4%.

Assuming that this is no time in the foreseeable future, we think there is a realistic chance of gold hitting US$3,000/oz and an outside chance that it could hit US$4,500/oz.”

The head of JP Morgan has warned that America’s “polarized electorate” is undermining its efforts to provide global leadership.

In his annual letter to shareholders, Jamie Dimon says that America’s global leadership role is also being challenged outside by other nations and inside by our polarized electorate.

In a warning against isolationism, Dimon writes:

We need to find ways to put aside our differences and work in partnership with other Western nations in the name of democracy.

During this time of great crises, uniting to protect our essential freedoms, including free enterprise, is paramount. We should remember that America, “conceived in liberty and dedicated to the proposition that all men are created equal,” still remains a shining beacon of hope to citizens around the world.

Dimon also warns that the fallout from Russia’s invasion of Ukraine should lay to rest the idea that America can stand alone.

At a time when infighting among Republicans on Capitol Hill is holding up an aid bill for Ukraine, Israel and other key allies, Dimon says:

Of course, U.S. leaders must always put America first, but global peace and order are vital to American interests. Only America has the full capability to lead and coalesce the Western world, though we must do so respectfully and in partnership with our allies.

Without cohesiveness and unity with our allies, autocratic forces will divide and conquer the bickering democracies. America needs to lead with its strengths — not only its military but also its economic, diplomatic and moral forces. And now we must do so as America’s leadership is being challenged around the world. There is nothing more important.

Dimon also warns that inflation may be stickier, and interest rates higher, than markets expect, citing the costs of building a greener economy, restructuring global supply chains, boosting military expenditure and battling rising healthcare costs.

And he predicts that the development of artificial intelligence systems will have “extraordinary” consequences, which could be as transformational as the printing press, the steam engine, electricity, computing or the Internet.

A deal that would have created the first vertically integrated cannabis company in the UK has collapsed.

Voyager, a Cannabidiol oil firm based in Perth, Scotland, has told the City it has terminated discussions with Jersey cannabis growers Northern Leaf.

The two companies had announced a proposed merger last week, which included a plan to undertake a fundraising to provide working capital for the enlarged group. However, today Voyager says those funds can’t be raised in time, due to the “Easter holiday period and slower investor response times”.

Nick Tulloch, chief executive officer and founder of Voyager, says:

“Needless to say, it is hugely disappointing to bring our proposed merger with Northern Leaf to an end. As we look back over the past few months, a transaction well received by the industry and investors has been prevented by circumstances outside of our control.

Our interest in expanding in the cannabis sector through M&A is undiminished and we continue to see numerous opportunities. Many companies in this space are now cash-constrained due to development costs outpacing market growth and, whilst this does create excellent value propositions, as a management team we go in fully aware that work is needed to reinvigorate or accelerate sales.

The proposed merger with Northern Leaf was always about bringing together two businesses that could be leaders in their respective halves of the cannabis industry.

UK home buyers have the highest choice of mortgage products since the last financial crisis, data provider Moneyfacts reported this morning.

According to Moneyfacts, there are 6,307 products available this month, the highest level since February 2008 ( when there were 6,760 on offer), up from 6,004 in March.

But… mortgages become more expensive in the last month, too. The overall average two- and five-year fixed rates both rose, to 5.80% and 5.39% respectively.

The average Standard Variable Rate (SVR) remained at 8.18%, just below the record high of 8.19% recorded in November and December 2023.

8 Apr 202405.45 EDT

Vet firm CVS hit by cyber-attack

Jasper Jolly

One of the UK’s largest vet groups has told regulators about a possible breach of personal information after it was hit by a cyber-attack.

CVS Group said hackers had gained unauthorised external access to a limited number of its IT systems. The company continued to have problems with slow-running systems on Monday after disruption across the UK business.

The chain has more than 500 locations around the world, most of which are in Britain, and is one of the big six groups of UK veterinary practices. Those groups, with backing from large investors, have snapped up vet practices across the country.

More here:

Over in the eurozone, investor morale has hit a two-year high this month, as hopes of an economic upturn continue to build.

Research institute Sentix has reported that its index of investor confidence rise to -5.9 points in April, the sixth rise in a row, and the highest since February 2022.

Economic expectations turned positive this smonth, for the first time since the start of the Ukraine conflict.

Sentix says:

Will there finally be a sustainable economic upturn? At least the economic recovery in the eurozone and world-wide is continuing.

Jason Tarry has the right retail expertise to help John Lewis Partnership succeed, argues Zoe Mills, lead retail analyst at GlobalData.

Mills explains:

“Jason Tarry was at the helm of Tesco during the crucial development of its Clubcard loyalty scheme, taking the discounters head-on and creating a retail model that its competitors have emulated since. He certainly has the experience and knowhow to rejuvenate the John Lewis Partnership.”

“This new challenge for Tarry will require a different tactic to that employed at Tesco, with Marks & Spencer, rather than the discounters, a clear threat to John Lewis’ long-term success. Marks & Spencer is forecast to continue to gradually grow market share in the UK clothing & footwear sector out to 2027, as the retailer’s focus on improved fashion pays off. Indeed, better perceptions of quality have aided sales in recent months and allowed Marks & Spencer to cut back on promotions as shoppers see the worth of purchasing at full price.

In comparison, John Lewis & Partners’ share is expected to stagnate until 2027 - Tarry will need to adopt a similar strategy to Marks & Spencer to improve quality perception and protect profit margins.”

But within the Waitrose supermarket chain, Tarry must not lose sight of its more premium proposition, Mills adds:

While remaining price-competitive will be crucial, as within general merchandise, the focus must be on quality and justifying higher price points to entice shoppers to trade up. Waitrose has sensibly preserved premium touches such as fresh-food counters; Tarry would be unwise to strip these out of the business as was the case at Tesco.”

Hiring Jason Tarry is a “big move” to quash the constant criticism about the lack of retail expertise at the top of John Lewis, says The Sun’s Ashley Armstrong:

By appointing Jason Tarry, the John Lewis partnersip is turning to an experienced retailer to lead the next phase of its turnaround, my colleague Sarah Butler reports.

Here’s her news story on his appointment:

Tarry’s more than three-decades of retail experience contrasts with Sharon White, who had no retail experience when she joined the partnership having run Ofcom, the UK telecoms and media regulator, and worked at the UK Treasury.