The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Apologies Rodney, I know you’re not a fan of cut and paste, but as it’s so close to Chrimbo, maybe you’ll overlook it this time, consider it a carbon offset against the CWU.
On a serious note, if OFCOM are allowed to flex its muscles here it’ll be time to call in the KCs from Chancery Lane.
BT scrambles to rip out Huawei tech ahead of New Year’s Eve deadline
Telecoms giant risks hefty fine if it fails to remove kit from ‘core’ networks by Dec 31
BT is scrambling to rip Huawei equipment out of its network before the end of the year to avoid hefty fines.
The telecoms giant still has not removed all kit made by the controversial Chinese company from its “core” network, with just 11 days left before a government-imposed deadline of December 31.
Millions of customers still need to be transferred to another supplier and it is not clear whether BT will manage to do so in time.
Ofcom has the powers to hand down fines of up to 10pc of turnover, or £100,000 per day, to any telecoms supplier that fails to meet the deadline.
BT pulled in revenues of £20.7bn in the year to the end of March, meaning it could be fined as much as £2bn.
The company, which owns the EE mobile network, has already been given an 11-month extension to the original deadline of January 2023.
Bosses said the original timeline was too tight and warned of serious disruption to millions of customers if it pushed ahead too quickly.
BT, which relied heavily on Huawei equipment to build its full-fibre and 5G networks, has said it will cost £500m to rip out the kit and replace it with technology made by Swedish rival Ericsson.
The Government banned Huawei from critical telecoms networks in 2020 amid concerns about the company’s Chinese ownership.
US officials have repeatedly warned that Huawei technology could be used as a backdoor for espionage or sabotage. The company has always denied the allegations.
The December 31 deadline applies to any kit in the “core” part of the network. A different deadline for removing kit from masts was met in July, while providers must remove all Huawei products from their 5G networks by the end of 2027.
Ofcom is due to report on progress to Technology Secretary Michelle Donelan in the spring. BT’s potential to miss its target was first reported by Bloomberg.
A BT spokesman said: “We’ve met our initial targets – both our radio access network (RAN) traffic levels and sites were below the levels required by the Government for its July 2023 deadline. Our focus is now on work in the core for the Government’s deadline.”
A government spokesman said: “We continue to work with operators to remove Huawei technology as quickly as possible while minimising disruption for consumers, and operators remain on track to remove it from 5G public networks by the end of 2027.
“We have already introduced an immediate ban on the installation of new Huawei equipment, limiting their presence in full-fibre infrastructure, and are removing technology from sites with national security implications.”
Ministers have been accused of “letting Huawei off the hook” after The Telegraph revealed that an annual report on Huawei’s security risks was quietly scrapped.
“ The total amount owed to suppliers stood at £590m at the end of August.”
I would guess one of TalkTalks main cost of sales suppliers is OpenReach, and thus much of the above £0.6B trade creditors is owed to OR. So I would be concerned. On the other hand OR could demand payment as soon as supplied or they pull the plug when creditor days slips, OFCOM would need to rule on that one.
DYOR.
Seems Kingsbury shorted on 27/10 at 110p, then again at 125p on the 30/11, looks like he was averaging UP to benefit from some kind fall as 110p seemed ambitious, I would guess he’s gone in again at 136p to help save his bacon.
Clearly Drahi needs some cash to service debt, and the Private Equity Companies know this. He can’t really sell bits and pieces in each business as and when, so there might be a bidding war for complete businesses, either Portugal or France or both, within his portfolio. This will leave Drahi with spare cash I think, what’s he going to do with it?
Casa, very few of us are confusing a bid with a take over. Bid has been talked about mostly, takeover very much less so.
BP, don’t be too hard on Rodney, just when he’s beginning to mellow, after all we’re into the £5 a share season, aka Christmas.
BP, don’t too hard on Rodney, just when he’s beginning to mellow, it is Christmas after all.
Last two paragraphs are interesting.
Interesting piece regarding London Markets being in serious need of repair.
London stock market is ‘structurally broken’, warns broker
Chancellor’s Edinburgh reforms aren’t enough to jolt UK stocks out of their ‘doom loop’
An economist at a leading City stockbroker has warned that London’s market is “structurally broken” as companies trade a fifth lower than overseas rivals.
Panmure Gordon’s chief economist Simon French said reduced investment in UK stocks had created a self-reinforcing “doom loop” that left them significantly undervalued.
Mr French said the lack of attention given to the issue in the Autumn Statement meant the problem is unlikely to be fixed anytime soon.
A raft of new rules from Jeremy Hunt, the Chancellor, known as the Edinburgh reforms “implicitly acknowledge” the issue, said Mr French, but he added they do not go far enough.
He said: “We have got ourselves into a funk and you need some pretty dramatic reforms. Because the UK market has underperformed for a long period of time, it has become, in my view, pretty self-fulfilling.
“The people investing your pension are saying it’s underperformed, therefore, we want to allocate less to it. You get in a bit of a doom loop.”
His comments echo recent concerns made by a group of FTSE 100 chief executives who urged Mr Hunt to end the “vicious cycle” of Britain’s stock market decline.
Noel Quinn, the chief executive of HSBC, and Helge Lund, the BP chairman, were among the signatories of a letter sent by the Capital Markets Industry Taskforce, which said London markets must be made more attractive for investors.
Mr French said regulation about what assets pension funds can own was part of the problem, as was the growing popularity of technology stocks in the US.
“Steadily over the last 20 and 30 years, regulators have done things that have disincentivised pension funds from holding UK equities,” he said.
“At the same time, the retail investor has gone into things like Tesla, Amazon and Google. You’ve got this perfect storm.”
The comments from Mr French come amid warnings that Britain’s market for small and medium-sized stocks is rapidly shrinking, undermining London’s reputation as a global hub.
This came to the fore last month after US conglomerate Mars acquired UK-listed Hotel Chocolat for £543m, the latest example of a growing appetite among international buyers to snap up undervalued London stocks.
Investment bank Peel Hunt last month warned that more companies are leaving London’s markets than joining.
Fleccy covered a few thoughts on BT possibly offloading the Final Salary Pension Scheme, this past couple of years.
Boots owner offloads £4.8bn pension scheme ahead of expected revival of sale process
The legacy pension fund was viewed as a potential blocker to a deal.
The owner of Boots has offloaded the pharmacy chain’s pension scheme in a £4.8bn deal that could pave the way for the potential restart of the pharmacy chain’s sale process.
Walgreens Boots Alliance said it has agreed to hand responsibility of its defined benefit pension scheme, one of the biggest in Britain with 43,000 members, to Legal & General.
Boots will pay around £170m of already committed payments to the scheme, as well as further contributions of around £500m before Legal & General starts issuing annuity policies to members.
The deal, which is the biggest single transaction of its kind, comes as speculation grows over whether Walgreens will revive plans to sell Boots.
The US owner shelved the potential sale last year after the “unexpected and dramatic change” in financial markets, although its legacy pension fund was also viewed as a potential blocker to a deal.
Executives at Walgreens have recently been under pressure to strengthen the company’s US focus in recent months by spinning off its international operations.
Last month, Walgreens announced it was cutting $1bn of costs from its operations in America.
However, it has also been looking to trim back its store footprint in the UK and Walgreens earlier this year said it was planning to shut around 300 Boots stores by next June.
As of June, it had 2,200 stores across the UK and Walgreens has said wants to reduce this to 1,900.
Walgreens said the deal with L&G was the “best way to safeguard members’ benefits against market uncertainty, improved life expectancies and other risks”.
Alan Baker, on behalf of Law Debenture as chair of trustee for the Boots Pension Scheme, said the agreement meant the scheme would protect pensions for decades to come.
Andrew Kail, chief executive of Legal & General Retirement Institutional, said: “We are continuing to see an unprecedented acceleration in demand in this sector, driven by more pension schemes being closer to buyout than ever before.
“Against this backdrop, we have posted a record year with £13.4bn of global pension risk transfer written to date.”
As recently as August, the Boots defined benefit pension scheme had a surplus of $79m (£63m).
Sale at 29 times EBITDA value, if BT could attract half of that value over its reported EBITDA, sale or no sale, it would be happy days.
Very Funny. Well done Rodney, you may have lost some CWU battles but you’re winning the CWU War.
One big question. Why was the triennial BTPS review released in the last couple of days, in the past we have had to wait for the best part of a year? If complexity was any of the underlying reasons for a sturdy review period, then what’s happened with the LDI and Bonds values under Truss, surely would have made for utilising as much time as before. Interesting! DYOR.
2 pretty good pieces of news this morning, not that you would know it from looking at the sp.
I was quite cheery today, until I read your post Fleccy. Who needs newsnight!
As simple as 123 Pence.
…….“You’re a very naughty boy”. Great line.
Opened up, now there’s a collectors item.
I see our old mate Gavin P is to lead Octopus Energy. I’d laugh if Shazza on losing her JLP job found herself leading OFGEM. Stranger things happen.