The risks facing potential investors in Saudi Arabia’s state-owned oil producer have been laid bare as the company prepares for what will be the world’s biggest initial public offering. Saudi Aramco has published the prospectus for its listing on the Tadawul stock exchange in Riyadh, a flotation that that could value the business at $1.5 trillion. The document, which was released late on Saturday night and runs to more than 650 pages, was scant on details about the share sale, but it did outline a host of risks, ranging from climate change to social unrest in the Middle East, that could threaten the business. The prospectus brings the longdelayed flotation a step closer. Saudi Aramco is the world’s most profitable company, generating net income of $111 billion last year. It is the world’s largest oil producer, with output of 10.3 million barrels of crude per day in 2018. Its flotation is the brainchild of Crown Prince Mohammed bin Salman, 34, who wants to use the money raised from the listing to overhaul the country’s economy. However, the share sale has faced delays and there is scepticism that the deal will achieve the $2 trillion valuation for the company that is being sought.
Wet weather put a dampener on the retail sector last month, with shopper visits to stores declining at the worst rate in October for seven years. Shopper numbers fell by 3.2% year-on-year, according to the British Retail Consortium, the trade body, and Springboard. It was a steeper decline than in September and in both the three-month and annual averages. High streets were hit hardest, with footfall down 4.9% and declining in all but one area in the last week of the month That compared with a 0.5% decrease in retail parks, the first drop in five months, and a 2.4% decline in shopping centres, a slight improvement on the three-month average.
easyJet (EZJ) is set to step into the void created by the collapse of Thomas Cook Group (TCG) and reveal details of the launch before Christmas of its own package holiday business. Easyjet is to reveal plans to relaunch its own holidays subsidiary next week. Its move into packaged holidays is the fruition of a plan set in motion soon after Johan Lundgren became the airline’s chief executive nearly two years ago. Reworking its existing offering as a package holiday subsidiary puts Easyjet on the other side of the argument put forward by Michael O’Leary, Ryanair Holdings (RYA) chief executive, who said that the collapse of Thomas Cook showed that the age of the package holiday was dead. Mr Lundgren, a former senior executive of the TUI AG Reg Shs (DI) (TUI), is understood to believe that a holiday subsidiary will become a “super-ancillary” revenue-raiser for Easyjet at a time when the airline’s company’s financial fortunes are treading water. Next week Easyjet is expected to report a drop of at least 3% in annual pre-tax profits from last year’s £445 million because of record losses suffered last winter and trouble turning its entry into the German market — via the acquisition of assets of the insolvent Air Berlin — into profitability. So-called ancillary revenues, or income additional to fares such as payments for reserved seats, are a strong growth area and already account for more than a fifth of Easyjet’s revenues.
Sweden’s state-owned power company is considering quitting the British household energy market after only two and a half years, describing it as a “mess”. Vattenfall entered the market in June 2017 when it bought iSupply Energy, a Bournemouth-based business with about 120,000 household customers. However, Magnus Hall, Vattenfall’s chief executive, said that the market had proved to be “very difficult” because of strong competition and a government-imposed price cap. He said that the utility was considering “how we deal with it” and that one option would be “to potentially divest”.
The annual accounts of Clintons are overdue as the greetings card chain seeks approval from landlords for a restructuring and closure of stores. The retailer is discussing plans to shut 66 of its 332 shops and to cut the rent on a further 206 by agreeing deals linking payments to store performance. The proposed company voluntary arrangement was outlined in meetings with landlords towards the end of last week and KPMG, the Big Four accounting group, is on hand to support the process, It was appointed this year to oversee a strategic review of Clintons. A company voluntary arrangement, or CVA, is an insolvency procedure that allows struggling retailers to cut rents and close stores.
Stores and restaurants are complaining that payment processing companies are holding on to their money and squeezing what are already tight retail cashflows. “[Payment companies] are being really opportunistic and at the slightest whiff of distress they are suddenly holding on to cash for longer, which is the worst thing a business needs when it is going through a tough patch,” one restructuring expert said. The effects can be dramatic. A restructuring industry source said that they could “understand in situations when a customer has put a big order in for furniture and there is a risk that the company might collapse before it is made or delivered, but I can see no reason for why they are extending their hold on cash for restaurants, because there can be no shorter timeframe between ordering a burger and eating it”.
Sainsbury (J) (SBRY) has struck a deal to sell groceries in Australia in its biggest push to enter the wholesale market and catch up with its rivals. The supermarket has struck a partnership with Coles, Australia’s second biggest food and drink retailer, to supply its 2,400 outlets. Sainsbury’s is understood to be supplying its range of cupboard essentials, such as tins of soup, beans and dried pasta, and its homewares range. The retailer sells cooking equipment such as baking tins under its Tu label, but this will bear the Coles brand name in Australia. Coles wants to increase its range of own-brand products from 25% to about 40%. It has a 27% share of the Australian market but is facing stiff competition from Aldi, the discounter that is taking a similarly aggressive approach to expansion as it has done in Britain.
Infrastrata (INFA) is set to raise £6 million to seal the deal to save Harland & Wolff. Infrastrata says that it has launched an equity fundraising to complete the £5.25 million acquisition announced last month of the historic Belfast shipyard, which is much diminished from the days when it was capable of building the Titanic a century ago and supertankers in the 1960s. In recent years it has become a renewable energy fabrication business. The saving of Harland & Wolff from liquidation should lead to the 79 jobs remaining at the yard being saved. Infrastrata has launched an open offer that will allow private investors to subscribe alongside institutional investors and directors. The fundraising book will close today.
Employers expect to take on more staff in the final quarter of the year, led by the public sector after the government signalled the end of austerity. The latest labour market outlook report from the Chartered Institute of Personnel and Development found that public sector employers planned to raise pay and recruitment. The survey of 1,016 employers in September coincided with Sajid Javid, the chancellor, vowing in a spending review to raise public spending after a decade of austerity. Both main parties are promising to open the coffers as they campaign for next month’s general election. The CIPD’s survey recorded a net employment score of +22, up from +18, boosted by a larger proportion of employers expecting to increase, rather than decrease, total staffing levels. The scores were broadly based, but were highest in construction, administration and support services and healthcare.The public sector balance rose sharply from +2 to +14, the highest in more than five years, which the CIPD said was “most likely buoyed by the government’s signalling of the end of austerity”.
