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The cost to taxpayers of rescuing the biggest residential energy supplier to collapse during the recent industry crisis has plunged – a rare glimmer of good news after two years of turmoil.

Sky News has learnt that the latest figures sourced from insiders suggest that the demise of Bulb, which became insolvent in November 2021, will have been far less costly than forecast.

According to industry figures close to the situation, the bill to taxpayers between the timing of Bulb’s special administration and its takeover by Octopus Energy in December totalled £1.45bn.

However, executives close to the buyer are now said to believe that the government is expected to make a profit of up to £1.2bn on the supply of energy to Bulb between the date of the takeover and the end of March.

This unexpected windfall for the state has been caused by the difference between the wholesale prices paid by the government – which have plunged in recent months – and the fixed price, set at the level of the current industry cap, paid by Octopus to obtain that energy.

Sources said that dynamic was likely to reduce the overall cost of the Bulb bailout to several hundred million pounds, although the ultimate figure remains subject to change.

On a per customer basis, that would make the Bulb rescue cheaper than some of the supplier of last resort (SOLR) deals struck with Ofgem, the energy regulator, during the last two years.

Greg Jackson 1
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Octopus Energy was appointed to take on Bulb, the first energy supplier to be put under ‘special administration’

Bulb, with more than 1.5m customers, was by far the largest residential energy player to collapse as wholesale prices soared.

At the time, it was the UK’s seventh-biggest gas and electricity supplier.

The reduced taxpayer bill may be relevant in the context of judicial reviews lodged by rival energy suppliers including Centrica, the owner of British Gas, which alleged that the sale of Bulb to Octopus Energy had been unfairly handled.

A three-day hearing has been scheduled to hear the suppliers’ challenged beginning on 28 February.

On Thursday, Centrica sparked a new political row when it reported record annual profits of over £3bn.

In December, the Department for Business, Energy and Industrial Strategy (BEIS) said it had been advised by Bulb’s special administrator to set an upper limit for the post-takeover funding facility of £4.5bn.

“The £4.5bn figure represents an estimated upper limit of the support based on forecasted energy costs during the period until 31 March 2023, which reflects the current volatility in global energy prices, BEIS said at the time.

Greg Jackson
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Greg Jackson is Octopus Energy’s chief executive

“The extent of government support could be lower than £4.5bn, depending on energy prices this winter.”

The £4.5bn estimate was in addition to the estimated £1.45bn pre-sale cost to taxpayers, but the government’s fiscal watchdog – the Office for Budget Responsibility – went even further, suggesting that the Bulb bailout could ultimately cost the public purse as much as £6.5bn.

In a more recent statement provided to Sky News, a government spokesman said: “The sale of Bulb to Octopus Energy concluded on 20 December 2022 and the transfer of customers is now in progress. Ensuring that we get the best outcome for Bulb’s customers and the British taxpayer remains our priority.

“We worked with Special Administrators to ensure fair and open competition to give Bulb’s 1.5 million customers much needed reassurance, while providing best value for taxpayers.

“The government will provide the remaining funding necessary to ensure that the special administration is wound up in a way that protects customers’ energy supply. We will recoup these costs at a later date.”

As part of the sale to Octopus, it is said to have agreed to pay between £100m and £200m to take on Bulb’s customer base, with a separate profit-share agreement giving the government a return for several years on earnings from Bulb customers.

An Octopus Energy spokesperson said: “Octopus always said this is a fair deal and good value for taxpayers.

“It’s becoming increasingly clear how good a deal the government have got.”

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ITV back in spotlight as suitors screen potential bids

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ITV back in spotlight as suitors screen potential bids

Potential suitors have again begun circling ITV, Britain’s biggest terrestrial commercial broadcaster, after a prolonged period of share price weakness and renewed questions about its long-term strategic destiny.

Sky News has learnt that a number of possible bidders for parts or all of the company, whose biggest shows include Love Island, have in recent weeks held early-stage discussions about teaming up to pursue a potential transaction.

TV industry sources said this weekend that CVC Capital Partners and a major European broadcaster – thought to be France’s Groupe TF1 – were among those which had been starting to study the merits of a potential offer.

The sources added that RedBird Capital-owned All3Media and Mediawan, which is backed by the private equity giant KKR, were also on the list of potential suitors for the ITV Studios production arm.

One cautioned this weekend that none of the work on potential bids was at a sufficiently advanced stage to require disclosure under the UK’s stock market disclosure rules, and suggested that ITV’s board – chaired by Andrew Cosslett – had not received any recent unsolicited approaches.

That meant that the prospects of any formal approach materialising was highly uncertain.

The person added, however, that Dame Carolyn McCall, ITV’s long-serving chief executive, had been discussing with the company’s financial advisers the merits of a demerger or other form of separation of its two main business units.

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Its main banking advisers are Goldman Sachs, Morgan Stanley and Robey Warshaw.

ITV’s shares are languishing at just 65.5p, giving the whole company a market capitalisation of £2.51bn.

The stock rose more than 5% on Friday amid vague market chatter about a possible takeover bid.

Bankers and analysts believe that ITV Studios, which made Disney+’s hit show, Rivals, would be worth more than the entire company’s market capitalisation in a break-up of ITV.

People close to the situation said that under one possible plan being studied, CVC could be interested in acquiring ITV Studios, with a European broadcast partner taking over its broadcasting arm, including the ITVX streaming platform.

“At the right price, it would make sense if CVC wanted the undervalued production business, with TF1 wanting an English language streaming service in ITVX, along with the cashflows of the declining channels,” one broadcasting industry veteran said this weekend.

“They would only get the assets, though, in a deal worth double the current share price.”

Takeover speculation about ITV, which competes with Sky News’ parent company, has been a recurring theme since the company was created from the merger of Carlton and Granada more than 20 years ago.

ITV said this month that it would seek additional cost savings of £20m this year as it continued to deal with the fallout from last year’s strikes by Hollywood writers and actors.

It added that revenues at the Studios arm would decline over the current financial year, with advertising revenues sharply lower in the fourth quarter than in the same period a year earlier because of the tough comparison with 2023’s Rugby World Cup.

Allies of Dame Carolyn, who has run ITV since 2018, argue that she has transformed ITV, diversifying further into production and overhauling its digital capabilities.

The majority of ITV’s revenue now comes from profitable and growing areas, including ITVX and the Studios arm, they said.

By 2026, those areas are expected to account for more than two-thirds of the group’s sales.

This year, its production arm was responsible for the most-viewed drama of the year on any channel or platform, Mr Bates versus The Post Office.

In its third-quarter update earlier this month, Dame Carolyn said the company’s “good strategic progress has continued in the first nine months of 2024 driven by strong execution and industry-leading creativity”.

“ITV Studios is performing well despite the expected impact of both the writer’s strike and a softer market from free-to-air broadcasters.”

She said the unit would achieve record profits this year.

ITV and CVC declined to comment, while TF1, RedBird and Mediawan did not respond to requests for comment.

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Ann Summers’ family owners to explore options for lingerie chain

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Ann Summers' family owners to explore options for lingerie chain

The family which has owned Ann Summers, the lingerie and sex toy retailer, for more than half a century is to explore options for the business which could include a partial or majority sale.

Sky News has learnt that the Gold family is close to hiring Interpath, the corporate advisory firm, to work on a strategic review which could lead to the disposal of a big stake in the chain.

Retail industry sources said this weekend that Ann Summers had been in talks with Interpath for several weeks, although it has yet to be formally instructed.

The chain, which was founded in 1971 and acquired by David and Ralph Gold when it fell into liquidation the following year, trades from 83 stores and employs over 1,000 people.

The family continues to own 100% of the equity in the company.

Sources said that some dilution of the Golds’ interest was probable, although it was far from certain that they would sell a controlling stake.

In a statement issued in response to an enquiry from Sky News, Vanessa Gold, Ann Summers’ chair, commented: “We, like many other retailers, are dealing with the unhelpful backdrop to business of the decisions announced by the government at the Budget and the rising cost to retail.

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“As a family-owned business, we are in a fortunate position and have committed investment for over 50 years.

“This has created a robust and resilient business.

“We are exploring a number of options to further grow the brand into 2025 and beyond.”

Ms Gold is among many senior retail figures to publicly criticise the tax changes announced in the Budget unveiled by Rachel Reeves, the chancellor, last month.

The British Retail Consortium published a letter last weeks signed by scores of its members in which they warned of price rises and job losses.

Private equity firms and other retail groups are expected to express an interest in a takeover of Ann Summers.

One possible contender could be the Frasers billionaire Mike Ashley, who already owns upmarket rival Agent Provocateur.

Any formal process is unlikely to yield a result until next year, with the key Christmas trading period the principal focus for the shareholders and management during the next month.

Ann Summers is one of Britain’s best-known retailers, with a profile belying its relatively modest size.

In the early 1980s, Jacqueline Gold, the then executive chairman who died last year, conceived the idea of holding Ann Summers parties – a key milestone in the company’s growth.

At its largest, the chain traded from nearly twice the number of shops it has today, but like many retailers was forced to seek rent cuts from landlords after weak trading during the COVID-19 pandemic.

This week, The Daily Telegraph reported that the Gold family had stepped in to provide several million pounds of additional funding to Ann Summers in the form of a loan.

Vanessa Gold – Jacqueline’s sister – also asked bankers to explore the sale of part of the family’s stake in West Ham United Football Club last year.

That process, run by Rothschild, has yet to result in a deal.

Interpath declined to comment.

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Thousands of jobs to go at Bosch in latest blow to German car industry

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Thousands of jobs to go at Bosch in latest blow to German car industry

Bosch will cut up to 5,500 jobs as it struggles with slow electric vehicle sales and competition from Chinese imports.

It is the latest blow to the European car industry after Volkswagen and Ford announced thousands of job cuts in the last month.

Cheaper Chinese-made electric cars have made it trickier for European manufacturers to remain competitive while demand has weakened for the driver assistance and automated driving solutions made by Bosch.

The company said a slower-than-expected transition to electric, software-controlled vehicles was partly behind the cuts, which are being made in the car parts division.

Demand for new cars has fallen overall in Germany as the economy has slowed, with recession only narrowly avoided in recent years.

The final number of job cuts has yet to be agreed with employee representatives. Bosch said they would be carried out in a “socially responsible” way.

About half the job reductions would be at locations in Germany.

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Bosch, the world’s biggest car parts supplier, has already committed to not making layoffs in Germany until 2027 for many employees, and until 2029 for a subsection of its workforce. It said this pact would remain in place.

The job cuts would be made over approximately the next eight years.

The Gerlingen site near Stuttgart will lose some 3,500 jobs by the end of 2027, reducing the workforce developing car software, advanced driver assistance and automated driving technology.

Other losses will be at the Hildesheim site near Hanover, where 750 jobs will go by end the of 2032, and the plant in Schwaebisch Gmund, which will lose about 1,300 roles between 2027 and 2030.

Bosch’s decision follows Volkswagen’s announcement last month it would shut at least three factories in Germany and lay off tens of thousands of staff.

Its remaining German plants are also set to be downsized.

While Germany has been hit hard by cuts, it is not bearing the brunt alone.

Earlier this week, Ford announced plans to cut 4,000 jobs across Europe – including 800 in the UK – as the industry fretted over weak electric vehicle (EV) sales that could see firms fined more for missing government targets.

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