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The Post Office is drawing up plans to close dozens of branches and axe hundreds of head office jobs as it tries to place its finances on a sustainable long-term footing.

Sky News has learnt that the state-owned company is preparing to announce in the coming days that it will shut or seek alternative franchising arrangements for more than 100 wholly owned branches.

The affected branches collectively employ close to 1,000 people and are said to be significantly loss-making.

A significant number of jobs – believed to be in excess of 1,000 – are also understood to be at risk at the Post Office’s headquarters. Further details of where the axe would fall were unclear on Tuesday afternoon.

Whitehall insiders said that the government had been consulted on the plans, which come as ministers explore the possibility of handing ownership of the network to thousands of sub-postmasters across Britain.

They added that union officials had also been briefed on the proposals, with one suggesting that an announcement could come as early as Wednesday or Thursday.

The cost-cutting measures are said to be designed to help the Post Office stem substantial financial losses, with the company requiring an annual government subsidy to stay afloat.

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Ministers to mutualise Post Office

One government source said the plans should be seen in the context of comments made by Jonathan Reynolds, the business secretary, on Monday at the public inquiry into the Horizon IT scandal.

Giving evidence, Mr Reynolds said: “I think despite the scale of this scandal, the Post Office is still an incredibly important institution in national life.

“I look at the business model of the Post Office, and I think even accounting for the changes in the core services that are provided … there’s still a whole range of services that are really important.

“But I don’t think postmasters make sufficient remuneration from what the public want from the Post Office, and I think that’s going to require some very significant changes to the overall business model of the Post Office.”

Improvements to the pay and working practices of sub-postmasters are expected to be announced imminently, the government source added.

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The 364 year-old institution has been engulfed in crisis since the scale of the Horizon scandal became clear, with hundreds of sub-postmasters wrongly prosecuted for theft and fraud offences.

Brought to a wider public audience by the ITV drama ‘Mr Bates vs The Post Office’, it has been labelled Britain’s biggest miscarriage of justice.

Many of those affected suffered ill health, marital breakdowns or died before they were exonerated.

Former chief executive Paula Vennells, who insisted for years that the Horizon system was robust, was effectively stripped of her damehood in disgrace earlier this year.

Last month, Sky News revealed that the Department for Business and Trade (DBT) has asked BCG, the management consultancy, to examine options for mutualising the Post Office.

BCG’s work is expected to include assessing the viability of turning the Post Office into an employee-owned mutual, a model which is used by the John Lewis Partnership.

The Post Office is Britain’s biggest retail network, with roughly 11,500 branches, with the public’s shareholding managed by UK Government Investments (UKGI).

In recent months, calls for a review of the company’s ownership model have grown amid a corporate governance fiasco at the company.

In January, Henry Staunton, the chairman, was sacked by Kemi Badenoch, the then business secretary.

Mr Staunton subsequently disclosed an investigation into bullying claims against Nick Read, the Post Office’s chief executive, which the organisation said in April had exonerated him.

Mr Read, who has since resigned, was accused of constant attempts to secure pay rises, even as sub-postmasters were facing protracted delays to their entitlement to compensation after being wrongfully convicted.

As part of their efforts to repair the Post Office’s battered finances and reputation, the government has parachuted in Nigel Railton, a former boss of National Lottery operator Camelot, as its chairman.

A Post Office spokesperson said: “We will set out a “new deal” for postmasters and the future of the Post Office as an organisation.

“It will dramatically increase postmasters’ share of revenues, strengthen our branch network and make it work better for local communities, independent postmasters and our partners who own and operate branches.”

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Hovis and Kingsmill-owners in talks about historic bread merger

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Hovis and Kingsmill-owners in talks about historic bread merger

The owners of Hovis and Kingsmill, two of Britain’s leading bread producers, are in talks about a historic merger amid a decades-long decline in the sale of supermarket loaves.

Sky News has learnt that Associated British Foods (ABF), the London-listed company which owns Kingsmill’s immediate parent, Allied Bakeries, and Hovis, which is owned by investment firm Endless, have been involved in prolonged discussions about a combination of the two businesses.

City sources said this weekend that the talks were ongoing, but that there was no certainty that a deal would be finalised.

Bankers are said to be working with both sides on the talks about a transaction.

A deal could be structured as an acquisition of Hovis by ABF, according to analysts, although details about the mechanics of a merger or the valuations attached to the two businesses were unclear this weekend.

ABF is also said to be exploring other options for the future of Allied Bakeries which do not include a deal with Hovis.

If completed, a merger would unite two of Britain’s best-known ambient food brands, with Allied Bakeries having been founded in 1935 by Willard Garfield Weston, part of the family which continues to control ABF.

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Hovis traces its history back even further, having been created in 1890 when Herbert Grime scooped a £25 prize for coming up with the name Hovis, which was derived from the Latin ‘Hominis Vis’ – meaning strength of man.

Persistent inflation, competition from speciality bread producers and shifting consumer habits towards lower-carb diets have combined to impair the bread industry’s financial health in recent decades.

The impact of the war in Ukraine on wheat and flour prices has been among the factors increasing inflationary pressures on bread producers, according to the most recent set of accounts for Hovis filed at Companies House last year.

The overall UK bakery market is said to be worth about £5bn in annual sales, with the equivalent of 11m loaves being sold each day.

The principal obstacle facing a merger of Allied Bakeries, which also owns the Sunblest and Allinson’s bread brands, and Hovis would reside in its consequences for competition in the UK market.

Warburtons, the family-owned business which is the largest bakery group in Britain, is estimated to have a 34% share of the branded wrapped sliced bread sector in the UK, with Hovis on 24% and Allied on 17%, according to industry insiders.

A merger of Hovis and Kingsmill would give the combined group a larger share of that segment of the market, although one source said Warburtons’ overall turnover would remain larger because of the breadth of its product range.

Nevertheless, reducing the number of major supermarket bread suppliers from three to two would be a test of the Competition and Markets Authority’s approach to such industry-reshaping mergers at a time when the watchdog is under intense government scrutiny.

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In January, the government removed the CMA chairman, Marcus Bokkerink, as part of a push to reorient Britain’s economic regulators around growth-focused objectives.

An industry insider suggested that a joint venture involving the distribution networks of Hovis and Kingsmill was a possible, although less likely, alternative to a full-blown merger of the companies.

They added that a combined group could benefit from up to £50m of cost savings from such a tie-up.

In its interim results announcement this week, ABF said the performance of Allied Bakeries had continued to struggle.

“Allied Bakeries continues to face a very challenging market,” it said.

“We are evaluating strategic options for Allied Bakeries against this backdrop and we expect to provide an update in [the second half of] 2025.”

In a separate presentation to analysts, ABF described the losses at Allied as unsustainable.

The company does not disclose details of Allied Bakeries’ financial performance.

Allied also owns Speedibake, an own-label bread manufacturer.

Hovis has been owned by Endless, a prominent investor in British businesses, since 2020, having previously been owned by Mr Kipling-maker Premier Foods and the Gores family.

At the time of the most recent takeover, High Wycombe-based Hovis employed about 2,700 people and operated eight bakery sites and its own flour mill.

Hovis’s current chief executive, Jon Jenkins, is a former boss of Allied Milling and Baking.

This weekend, ABF and Endless both declined to comment.

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Struggling Aston Martin steers into fresh pay controversy

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Struggling Aston Martin steers into fresh pay controversy

Aston Martin is steering a path towards a twin-pronged pay row with shareholders as it grapples with the impact of President Trump’s tariffs on car manufacturers.

Sky News can reveal that the influential proxy voting adviser ISS is urging investors to vote against both of Aston Martin Lagonda Global Holdings’ remuneration votes at next week’s annual general meeting.

The pay policy vote, which is binding on the company, has attracted opposition from ISS because it proposes significant increases to potential bonus awards to Adrian Hallmark, the company’s new chief executive.

“Concerns are raised regarding the increased bonus maximums, which are built upon competitively[1]positioned salary levels and do not appear appropriate given the company’s recent performance,” ISS said in a report to clients.

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Aston Martin is also facing a meaningful vote against its pay report for last year – which is on an advisory basis only – because of the salaries awarded to Mr Hallmark and other executive directors.

The company’s shares have nearly halved in the last year, and it now has a market value of little more than £660m.

Despite the ISS recommendation, Aston Martin will win the vote by virtue of chairman Lawrence Stroll’s 33% shareholding.

The luxury car manufacturer has had a torrid time as a public company and now faces the headwinds of President Trump’s tariffs blitz.

This week it said it would limit exports to the US to offset the impact of the policy.

Aston Martin did not respond to a request for comment ahead of next Wednesday’s AGM.

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Financial wellbeing platform Mintago lands £6m funding boost

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Financial wellbeing platform Mintago lands £6m funding boost

A financial wellbeing platform which counts the alcohol-free beer producer Lucky Saint among its clients has landed a £6m funding injection from a syndicate of well-known investors.

Sky News understands that Mintago, which was founded in 2019, will announce in the coming days that Guinness Ventures has jointly led the Series A round alongside Seed X Liechtenstein and Social Impact Enterprises.

Mintago, which also counts car rental firm Avis and Northumbrian Police among its customers, aims to help employees save and manage their money more effectively.

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A number of the start-up’s current investors, Love Ventures and Truesight Ventures, are also understood to have reinvested as part of the fundraising.

MINTAGO
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The company, which counts Lucky Saint and Avis among its users, has finalised a Series A funding round

The company was set up by Chieu Cao and Daniel Conti, and claims to offer more salary sacrifice schemes than any other UK provider.

It also provides independent financial advice, a service for finding lost pension pots, retail discounts and GP services.

“We realised that organisations are crying out for the same help we provide their staff,” Mr Conti said.

“The benefits of providing that support impact everyone.

“When a company improves their salary sacrifice benefits engagement, they can save thousands in National Insurance Contributions, but their employees save too, easing the strain on their finances.”

The new capital will be used to develop additional products using artificial intelligence, according to the company.

“Mintago is enabling its customers to become truly people-centric organisations by giving them the tools to support their employees’ financial wellbeing,” Mathias Jaeggi, a partner at Seed X Liechtenstein, said.

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