It is hard to think of another British leisure company investing in its future, and creating jobs, with such confidence
Costa Coffee bosses are perhaps wise not to hold their breath in expectation of hordes of tax campaigners, intellectuals and poets patronising its 1,479 cafes in protest at the tax affairs of rival operator Starbucks. Reminiscent of Paris’s Left Bank they are not.
Nevertheless, the latest YouGov brand preference survey suggests Costa is continuing to show a clean pair of heels to Starbucks in terms of the brand’s ranking in the affections of British coffee drinkers. Conducted before last week’s scrutiny of Starbucks’s UK tax bill, it showed Costa jumping from 28% to 32% in terms of consumer preference in 2012. About half of the gain appeared to be at the expense of Starbucks, now on 23%. The next survey update, conducted at the end of this month, should make for interesting reading.
It is no coincidence that Costa’s parent group Whitbread has avoided the kind of tax acrobatics which last week provoked such outrage against Starbucks. The business has long resisted the siren calls of financial engineers promising an easy boost to the bottom line – and to boardroom bonuses.
There is nothing overly clever or flashy about Whitbread. And this simple fact, with the benefit of hindsight, explains quite a lot about how the group has found itself a standout success story in Britain’s embattled leisure industry. On Tuesday it delivered yet another strong set of results, with half-year revenue bursting through the £1bn mark for the first time, despite a tough trading environment. Three years ago the figure was £700m.
Much of that growth has been generated by new Costas and Premier Inns sprouting up across the UK, and many more overseas. There are 10,000 more British jobs promised from Whitbread over the next three years. Meanwhile, the shares have climbed 25% in the last six months, to more than £23.
It is hard to think of another FTSE 100 leisure company investing in its future, and creating British jobs, with such confidence. Come to think of it, these days it is hard to think of another FTSE 100 leisure company full stop. Aside from Intercontinental Hotel Group and Carnival – both largely focused overseas – Whitbread is the last remaining leisure group to form part of the blue-chip index.
Relegation has been the story for pub groups Punch Taverns, Enterprise Inns, Mitchells & Butlers as well as for bookmakers William Hill and Ladbrokes. Each has struggled, to a greater or lesser degree, with mountainous debts. Wind the clock back a few years and Whitbread too had been under tremendous investor pressure to follow its peers down this ill-advised path. Whether by luck or foresight, it did not.
If Whitbread has outperformed its British-listed peers, the contrast with other competitors is even more stark. Starbucks is now mired in controversy about whether or not it has been meaningfully profitable in the UK for the last 14 years. Meanwhile, Premier Inn’s closest rival Travelodge, a private equity-backed business, has presided over a calamitous destruction of value and was forced into a rescue deal with landlords last month.
Another painful debt restructuring is expected to play out at David Lloyd Leisure, the debt-laden gym and tennis club business acquired by Lloyds Banking Group and property tycoons Richard and Ian Livingstone. It had had conservative borrowings when part of Whitbread. But when five years ago Whitbread received a staggering, debt-fuelled offer for the business of £925m it had little option but to hand the clubs over to the stewardship of the financial wizards.
Even in better times those at the top of Whitbread have never enjoyed anything close to the pay windfalls seen at competitors – which then went on to fare so poorly. But better builders of long-term shareholder value, in the leisure sector at least, you will struggle to find.
Campaigners want Eurasian Natural Resources Corporation to publish results of inquiry into links with Israeli tycoon Dan Gertler
Controversial links between the FTSE 100 mining group Eurasian Natural Resources Corporation and an Israeli businessman with high-level contacts in the Democratic Republic of Congo have returned to plague the company on the eve of its annual general meeting in London on Tuesday.
Anti-corruption campaigner Global Witness is urging ENRC to publish the results of an internal inquiry into allegations made by at least two whistleblowers at the firm, which is understood to include an investigation into the group’s ties to Israeli tycoon Dan Gertler.
Gertler has been dogged by accusations that a close relationship with DRC president Joseph Kabila has allowed him to buy interests in the country’s mining assets on the cheap. The Global Witness report states: “The offshore shell companies associated with Mr Gertler and paid by ENRC are obscure entities which have been registered in secrecy jurisdictions and have therefore not declared their full list of beneficiaries. Global Witness believes that these offshore structures could allow corrupt Congolese officials to benefit from these deals. If this is correct, ENRC may have poured money into corrupt transactions.”
ENRC has acquired stakes in mining concessions from Gertler at prices that appear to have delivered the Israeli’s offshore companies handsome – and speedy – profits. The FTSE 100 group’s purchases have also been criticised for being at levels significantly less than the true market value, meaning the company and its partner could have profited at the expense of one of the poorest populations on Earth.
The call for more transparency at ENRC comes after the mining company’s new chairman, Mehmet Dalman, refused to back Gertler in an interview with the Guardian last week. When asked if he has ever had any concerns about doing business with the Israeli, Dalman replied: “You know that is such a leading question I’m not even going to respond to it, right? … Any comment I make, whatever you write down, it will not look right. Why would I answer that question? It is a no-win situation for me. Don’t give me questions that I will look bad on, right? Come on. Be fair.”
The Global Witness report lists five deals it is concerned about that ENRC has completed in the DRC. Its questions centre on how Gertler’s offshore companies “obtained their licences in deals that were conducted in secrecy and not subject to public tenders”; how the offshore entities “have not revealed their full list of beneficiaries [so] there is a risk that these beneficiaries could include corrupt Congolese officials”; and how “in at least two cases ENRC bankrolled the initial purchases by Gertler-related offshore companies instead of doing business directly with the Congolese government”.
Scrutiny of these deals – plus similar transactions conducted with Gertler by FTSE 100 commodity trader Glencore – have led to promises of a parliamentary investigation. Last month, Pauline Latham MP, a member of the international development select committee, issued a statement asking: “Are London-listed firms using Dan Gertler and shell companies to navigate around anti-bribery legislation?”
Glencore, ENRC and Gertler deny any wrongdoing and say the transactions were properly conducted. In response to the Global Witness report, ENRC said: “ENRC is committed to upholding the highest standards of corporate governance and implements a zero-tolerance policy to bribery and corruption across all of our operations. In bringing significant and much-needed investment to the DRC, ENRC has fully complied with regulations and disclosure obligations.” A spokesman for Gertler’s Fleurette Group said: “Fleurette has continually stated that the only beneficiaries [of Fleurette Group] are the Gertler Family Trust for the family members of Dan Gertler.”
Despite efforts to manage the controversy, concerns about so-called “pink slime” in the nation’s beef supply are influencing decisions about what people buy and eat. In a poll recently conducted by Harris Interactive, 22% of respondents said they’ve either decreased and/or stopped altogether their consumption of ground beef in restaurants, and 25% said they’ve either decreased and/or stopped altogether their purchases from grocery stores. 2 comments!
Read more here: Despite efforts to manage the controversy, concerns about so-called “pink slime” in the nation’s beef supply are influencing decisions about what people buy and eat. In a poll recently conducted by Harris Interactive, 22% of…
A loan broker found to have conducted “deceitful and oppressive” practices decides not to appeal against the loss of its credit licence.
Excerpt from: No licence appeal by loans broker
TORONTO, ONTARIO–(Marketwire – March 31, 2012) - Ontarians from every riding in the province are solidly opposed to the unfairness of McGuinty’s budget and they are ready to go back to the polls to demand fair taxation, says a new poll conducted by Public Polling Inc. on behalf of the Ontario Federation of Labour (OFL).
Read more here: REPEAT: New Poll Finds Strong Majority Supports Calling an Election
New York personal injury lawyer David Perecman comments on a New York Post article reporting a significant drop in the average number of monthly elevator inspections conducted in New York.
Link: New York Personal Injury Lawyer From The Perecman Firm Criticizes Decrease in New York Elevator Inspections