Foxtons founder and billionaire Jon Hunt has added to his huge fortune after racking up multi-million-pound profits on the £120 million sale of a City office block, the Evening Standard understands.
The shrewd Hunt, who sold the aggressive estate agent he founded at the peak of the market to private equity firm BC Partners in 2007, has offloaded the Cannon Green office development to Korean investor Kiwoom via his latest property company Ocubis.
Industry sources said Hunt is likely to have more than doubled his money on the development, having bought the former Princess House for £29 million in 2014 and spent around £25 million on a major refurbishment before rebranding it Cannon Green.
The sale is believed to have completed this week.
According to the Sunday Times Rich List Hunt is worth around £1.4 billion, owning Heveningham Hall in Suffolk and some £600 million in commercial property. Last year he won a 10-year battle to build a super-basement under his Kensington home housing a museum for his collection of cars.
The City watchdog flagged up plans to put much tighter reins on the trading of volatile cryptocurrencies today as bitcoin plunged again.
The Financial Conduct Authority will consult early next year on a potential ban on the sale of products to retail customers such as contracts for difference linked to cryptocurrencies.
CFDs allow customers to bet on volatile currencies using borrowed money, enhancing winnings but also magnifying potential losses on a hugely volatile asset class.
The FCA’s move follows the final report of the UK Cryptoasset Taskforce in October. Bitcoin was at the centre of a buying frenzy a year ago that pushed the price to almost $20,000 but it has fallen by more than 80% since then. It lost another $241 to $3362 today.
The watchdog is also widening the scope of a European crackdown on spreadbetting introduced this summer to include so-called “turbo” certificates, which have similar risk features and payout structures to CFDs.
The boss of one of London’s biggest housebuilders on Friday pleaded with politicians to avoid a hard Brexit disrupting the vital flow of materials into the UK.
Berkeley Group, which accounted for more than 10% of the capital’s private and affordable homes in the six months to October, imports around half its materials from Europe, as well as relying on an EU workforce.
Chief executive Rob Perrins called for a “pragmatic” solution ahead of a critical vote on Theresa May’s withdrawal deal, the defeat of which is likely to presage another period of turmoil at Westminster next week.
Perrins warned: “I hope we find a solution that doesn’t keep the uncertainty running on or means we get a very hard Brexit, which doesn’t allow the free movement of materials. Materials will be the issue, if you have short-term materials shortages.”
Berkeley imports timber from Holland, and cement and bricks from Belgium, while its cladding is sourced in the Far East but assembled on the Continent and imported on a “just-in-time” basis.
He added: “To reorder the supply chain will be difficult. When you switch, switching cladding will be really difficult. If you can’t get a building water-tight, it doesn’t matter that I can source a kitchen from the UK. I haven’t got a water-tight building.
“You have got to sort out your whole supply chain, because you will be held up by a part of it… Free movement of goods is critical and any government would want that. We won’t get fresh food. We won’t be the first business to run out. Hopefully pragmatism will come into play, it has to.”
Berkeley’s first-half profits slid 25% to £401.2 million, although “resilient” trading despite Brexit uncertainty and stamp duty tax hikes meant it upgraded full-year forecasts by at least 5%. The shares rose 3%, or 99p, to 3420p.
The firm has splashed out on 11 sites but has a cash pile of £859.7 million, up from £687.3 million in April. Perrins said it was “a bit underinvested”, adding: “It would be better to have it invested in the UK, employing people, but you take a degree of caution.”
Berkeley has committed to pay £280 million a year in dividends until 2025.
Canaccord Genuity’s Aynsley Lammin said: “Clearly the risk of a recession on the back of a disorderly Brexit cannot be ignored, but the group’s comments today confirm it is in great shape and, in a reasonable macro backdrop, has confidence in delivering good returns.”
O₂ parent Telefonica is thought likely to further delay its plans to sell or float the mobile phones network after yesterday’s outage.
Telefonica has already delayed plans for a £10 billion float this year, citing Brexit fears. It is now unlikely to restore the float plans until it has got to the bottom of the issue that saw millions unable to get online.
O₂ had no comment on the float, but did admit it was likely to face compensation claims. Today the phone network said its services had been restored, as it apologised to customers and thanked them for their patience. Disruption began at 5am yesterday. The 3G data service began returning last night.
Today O₂ said: “We can now report that our 4G network has been restored. Our technical teams will continue to monitor service performance closely over the next few days to ensure we remain stable. A review will be carried out with Ericsson to understand fully what happened.
“We’d like to thank our customers for their patience during the loss of service on Thursday 6 December and we’re sorry for any impact the issue may have caused.”
O₂ boss Mark Evans was said to be considering how to compensate customers. He said: “I want to let our customers know how sorry I am.”
Customers are likely to be entitled to money back for loss of service, especially if they can prove they had to spend money to use a phone or connect to wi-fi.
Brexiteer tycoon with sales of £3 billion on why he shuns the City and its greedy ways
Hold on, I’d better take this.” Anthony, Lord Bamford, the billionaire chairman of JCB, holds up a hand and breaks off the interview to take a call.
A crisis at its vast Indian operations? A construction giant ordering a new fleet of diggers? Not quite.
“Hellooow Otis! How are you? No… no.” Long pause. “Well, I’m afraid we haven’t got any owls at the moment.”
It’s his three-year-old grandson on the line. Not the kind of call you’d expect the boss of one of Britain’s biggest engineers to be taking in his corner office on a busy afternoon.
But Bamford is not like most chairmen, and JCB is not like most companies. Despite being huge — employing directly or indirectly 24,000 people in the UK alone — JCB is still owned entirely by the Bamford family.
Founded in a Staffordshire garage after the Second World War by his father Joseph Cyril Bamford (“JCB, geddit?”), the family history is everywhere around the place.
Not just in the look of the machines, which still vaguely resemble Joseph’s first brainwave of sticking a scoop digger on the front of a tractor, but in the paternal nature of the organisation towards its staff and the long-term approach to business.
Since Anthony took over in 1975, it has made ever bigger investments in research and development. It has opened 21 factories around the world, from India to the US, and grown from an annual turnover of £44 million to £3.35 billion.
JCB is still based on the site of the old cheese factory in the Potteries that Joseph moved into in 1950.
But these days the place is vast, with a factory 300 metres wide turning thick sheets of steel into yellow backhoe loaders and hydraulic lifters.
The neighbouring offices are enormous, too. Striding from one end of the admin floor to the other adds at least 100 steps to your Fitbit.
When you finally reach the management offices, you’re greeted by a panoramic view over a landscaped lake. That’s a legacy of Joseph Bamford, too. Local folklore has it he had it dug out (by JCBs, of course) in the shape of Lake Geneva, on whose shores he retired in his latter years.
I’d asked to visit because I’d heard JCB was this weird place where the workers actually like the management and tend to stay for most of their working life.
Unless the folk I met were actors, the rumours quickly proved to be true. The driver who picked me up from Stoke-on-Trent station had been at JCB for 22 years. His wife, 32 years. His eldest son had just finished his first decade and his other one was five years in. The factory foreman has been there 24 years. A local family, the Boots, are now in their fourth generation.
More lifers-to-be come through every year as apprentices from an engineering academy school Bamford has set up for local youngsters.
When the firm’s doing well, staff get good bonuses. In the lean year of 2015, they were able to negotiate to cut their hours rather than face redundancies.
So what’s he like, the father figure leading this seemingly contented band? Bamford, 73, is well-spoken, jovial and impeccably mannered, as you’d expect from an alumnus of Ampleforth College, the Catholic Eton.
But despite the polish, he’s a passionate soul. The one issue to guarantee getting his hackles up is the way politicians only focus on the FTSE 100 multinationals and ignore family firms such as his. “There are something like 2000 Plcs, but 4.8 million family firms. Four-point-eight million! They employ 12.5 million people, yet they’re just completely ignored.” Among those, he could have named Daylesford, the thriving organic food and hotels group run by his wife, Carole.
An ardent Brexiteer, Bamford pulled JCB out of the pro-Remain CBI because he felt it was only representing the views of big Plcs. He has no plans to return.
He’s none too keen on plcs, you sense. “I certainly don’t agree with the enormous bonuses people seem to be able to earn,” he says.
I bring up Persimmon’s £75 million man Jeff Fairburn, who’d been in the paper that morning. He grimaces: “The thing is, Persimmon’s not a revolutionary business. The man who built it up… and owned a big chunk of it, you can understand him benefiting. But the paid hands? Were they doing anything extraordinary? No.”
BAMFORD isn’t short of a bob or two himself: the glossies have detailed his houses, the yacht, classic cars. The Sunday Times Rich List puts the Bamfords at £3.6 billion, making them the 35th wealthiest in the country.
But, as he puts it: “We are a family business and I’m conscious every single day that I am risking my family’s capital. That is very different from being a normal salaried person who is not risking anything.”
Bamford has largely steered clear of the City.
He’s convinced that if he’d been a Plc, he could never have made the long-term investments that built JCB into what it is today. City investors wouldn’t hold by the family motto: “Stick and stay and make it pay.”
Take Brazil, he says, where JCB invested heavily in opening manufacturing plants 12 years ago. For a few years, it did well, then political upheaval came along and the economy tanked.
“The market just disappeared so we had big costs, big overheads. But we stayed, and now gradually it’s coming back. Would we have been allowed to do that as a public company? Probably not. They would have made us close it down or sell it off.”
Note to fund managers: JCB has averaged an annual return on investment of 32% since he took over.
“These [City] people,” he says, “they are all very grand. All those people who go to Davos, they do think they’re above the rest of the world.”
The kind of elites that opposed Brexit, perhaps? As a big donor to the Brexit cause, what does he think now? “I’m bored silly with it. Everyone I talk to is bored silly with it.” He says the country never needed a referendum in the first place. “Cameron; I don’t think he negotiated, that’s the truth of it. Has May negotiated properly? I don’t know. Honestly, it is bloody boring and I’m sure Mr Barnier is a very good negotiator.”
He adds with a grin: “My experience of negotiating with French people is that it’s almost the end of the world for them to give in on anything.”
One main problems of family-owned business which he’d like the Government to fix is the legal complexity of passing the firm on from one generation to the next.
So what’s the plan for his three children and JCB?
All have spent time in the firm, but none seem hugely engaged by the Potteries HQ: his son George is working with LVMH on wristwatch designs (Bamford sports a £450 version when we meet); daughter Alice helps run JCB’s West California distribution but lives on an eco-ranch she runs there with her partner and two children; his other son, Jo, left the business in 2016 to spend more time property investing.
So who will take over?
“I don’t really have any plans,” Bamford says. “That looks badly thought out, but I’m the only member of the family who’s here every day.”
He adds he has a professional team below him — including a chief executive — who run the business day-to-day.
“If I popped off, do we have to appoint another member of the family immediately?” he asks. “Definitely no.”
I wonder how he ever had time for his family while building such a global business. “I think I was probably not a great father,” he admits. “I mean, I didn’t play football or anything like that. I was away from my children a lot. But Carole and I try to be with our grandchildren a lot now and love seeing them.”
A family friend tells me he’s being modest about his parenting. The children are famously fond of him, she says. There are seven grandchildren now. I get the feeling he hopes one of them will be running the family firm one day.
Otis: forget the owls, come play with the diggers.
Victoria Beckham’s London headquarters has been sold to a Middle Eastern investor for £16.8 million, the Evening Standard can reveal.
Dubai-based SRG Holding, a client of agent CBRE, has bought 14,746 square feet office block 202 Hammersmith Road from Aberdeen Standard Investments. It is used by Beckham’s fashion empire which moved in last year.
The building is in the heart of Hammersmith’s commercial district, with nearby occupiers including Walt Disney and L'Oréal.
Data from Savills, which advised the seller, shows Middle Eastern investment in London commercial property should reach £1.38 billion in 2018. That is up 30% from last year.
Jonathan O’Regan, director in the Central London investment team at Savills, said: “We received strong interest from both international and domestic capital for this high profile investment.“
Ed Bradley, head of West End investment at CBRE said 202 Hammersmith Road would be "a great addition” to SRG’s UK portfolio.
Overseas buyers have recently been attracted by the weaker pound making deals more tempting, high occupier demand for offices, and rising rents.
Deals this year have included Saudi Arabian firm Sidra Capital swooping for £94 million office building Weston House in Holborn, and Qatar’s Katara Hospitality buying the Grosvenor House hotel in Mayfair for an undisclosed sum.
What do companies such as Didi Chuxing and Bitmain Technologies have in common? They are Chinese unicorns, part of a long list of tech companies worth more than $1 billion. In fact, China’s business aptitude is such that the country was responsible for birthing 80% of Asian unicorns from 2012 to 2017.
The populous east Asian nation is making strides in its quest to become the world’s dominant player in business and technology. Under its Made in China 2025 plan, the government wants to transform the country into a high-tech manufacturing hub by leveraging state-run subsidies and acquiring intellectual property in a bid to catch up with and then surpass the West.
China is desperate to rid itself of the copycat stigma which has tarnished its reputation for years. As a result, entrepreneurship there has developed at breakneck speed over the past decade and the value of some tech companies such as Tencent or Alibaba has exceeded that of their US counterparts.
According to Xinhua, China’s official state-run press agency, the internet and technology sector grew 18% in 2017, outpacing overall economic growth. China’s strategic approach has already helped the delivery of large-scale projects. In recent years, it has made an effort to invest in its start-up culture, even going as far as incentivising Chinese students abroad to return home and set up a business.
Money is widely available, too. China’s policy for mass entrepreneurship has set aside a hefty $320 billion, a move which will probably take it from an industrial economy to one underpinned by innovation.
The country’s advantages lie around implementation, its structured government approach and the population’s seeming compliance with state edicts. China’s sheer scale is also of benefit for fast-growing businesses and with that scale comes the abundance of relevant data, which is the fuel machine-learning systems feed off. It’s long been accepted that Chinese consumers and tech companies, which operate with the government’s implicit approval, are less concerned with privacy than their Western counterparts.
Although this is quickly changing, there’s an underlying sentiment that Chinese users are more willing to trade their personal data in exchange for greater convenience and safety, although perhaps the more interesting question is whether the notion of privacy is different in China. Regardless, with its easy access to data and potential funding, China will be able to gain better predictions, efficiency and profits with less labour and costs. More importantly, advancements in technology will confer advantages in every sector, from business and healthcare to the military.
While China aggressively rolls out its innovation strategy, the US government suffers further ridicule at the hands of its President, whose only interaction with technology comes in the form of his notorious Twitter rants. Throughout his tenure, it’s become obvious that Donald Trump resents big tech, mostly because he doesn’t understand it, a mistake the leader of the Free World can’t afford to make, especially with China’s ambitions.
Headlines about the Trump administration’s trade war with China typically focus around raw materials such as aluminium and steel, but don’t be fooled: the President’s resurgence of protectionism is most likely driven by anxiety about China’s growing technology prowess.
There are many areas where countries such as the US still excel. For example, China is still second to the US across a range of AI drivers, including hardware and talent. For Chinese innovation to really take off, the country needs to attract and retain its home-grown talent. But, with the government’s full backing, it’s undeniable that China is in the age of implementation.
To keep up, the West must change how it perceives Chinese technology businesses as being mere copycats of Western products. It must also acknowledge that, in some instances, China is ahead by leaps and bounds.
The biggest danger facing western governments and the tech behemoths in Silicon Valley is their widespread complacency and self-confessed supremacy.
China’s pursuit to win the Fourth Industrial Revolution is not just an attempt to match the West’s economic power, but to bypass it. The time has come to pay attention to China’s state-driven innovation strategy or else risk falling behind at our own peril.
Ray Kelvin is 63 next week. That’s 10 years younger than Sir Martin Sorrell, three years younger than Sir Philip Green. We’re talking ballpark same generation here.
That all three of them have been accused of behaving — ahem — inappropriately could reflect how the values of certain men of their age are colliding with those of their younger employees. (It should be said the claims are denied.)
In the cases of Green and Sorrell, it’s been claimed that they’re out of touch with their customers, too; Green in his failure to move quick enough into online retail and Sorrell in his sluggish integration of WPP’s disparate business units.
You can’t draw the same conclusions with Kelvin, though. He has managed to keep Ted Baker as a popular and powerful brand both online and in stores, retaining that quirkiness its customers like.
Unlike most rival chains, Kelvin saw the shift to digital retail early and did not get caught out with a large number of shops on long, fixed-term leases. Of his 440-odd stores around the world, three-quarters are concessions where rents are based on sales. Without a large, inflexible rent bill hanging round his neck, he’s been able to invest in online and make the transition smoothly.
Added to which, he’s just coming to the end of major warehouse and IT upgrades in the UK, Europe and the US which will bring savings and allow for faster, more local online marketing in future years.
Ted Baker’s strong international business — now 70% of takings — makes it fairly Brexit-proof, too. In short, it is a solid, well-invested business, positioned for the future.
Thursday’s figures talked of flattish sales amid weirdly warm weather. In a market where rivals are tumbling, that’s not bad.
Turnover was skewed downwards by weak wholesale orders, but that’s always a lumpy business — particularly when you have the likes of House of Fraser and Nordstrom in the US in crisis.
As temperatures chilled in the past couple of months, sales jumped 4% year-on-year. That bodes well, as do online sales (nearly a third of the business) jumping 18% through the quarter.
Yet the share price remains crippled by Hug-gate. Since details of staff complaints against Kelvin emerged, the stock has fallen 27%. That is absurd. You can only justify such a sell-off if you assume Kelvin will be fired, all creative flair at the company will be lost, and he will sell his stake.
This seems unlikely. Even if he does quit, the management and design team is strong. Most have been with the firm a decade or more. The business is in fine shape and, perhaps as importantly, why would he sell his shares now when they’re at five-year lows?
My guess is Kelvin will tame his creepy uncle antics, take a slap on the wrist by the board and get back to work.
Ted Baker will go on to be one of the winners of the retail sector. It’s time to give the shares some love. No hugging, though.
In Illogan, Cornwall, the shelves of the Mann family are creaking with 52 tins of baked beans, 16 cans of tuna and more rice than the average Indian restaurant probably uses in a week.
The Manns, who made the papers for stockpilng four months’ food in case of a no-deal Brexit, say “it’s about being able to survive”.
Melodramatic though that sounds, they are only mimicking the behaviour of many businesses across the country, which have been stockpiling for the worst eventuality. And five days away from the looming defeat of the Government’s Brexit withdrawal agreement — opening the door to who knows what? — it’s not exactly surprising much of corporate Britain is taking the safety-first approach.
Thankfully the threat of a no-deal looks to have receded this week, after MPs inflicted defeats on the PM to take more control over the Brexit process, and Europe’s top legal official indicated that the UK could, if necessary, revoke Article 50 unilaterally.
But the real concern is that the damage is already done; it may already be too late to avoid a recession, or at least a sharp slowdown.
The stockpiling of goods by the likes of Mr Kipling-maker Premier Foods (£10 million) or Majestic Wine (£8 million) could have implications for their suppliers on the Continent, as well as our own exporters to the EU.
That’s down to the so-called “bullwhip” effect. In the world of logistics, it means relatively modest changes in customer demand being amplified down the supply chain, like the flick of the wrist on the handle of the whip making far bigger waves at the end of the thong. Over time it can lead to hugely inefficient pile-ups of stock further down the chain, threatening volatile swings in production. Higher demand from customers means retailers order more stock from wholesalers, who in turn order more from manufacturers, who in turn order more from their own suppliers.
If those customers holding the whip handle start stockpiling, then the impact of those decisions may only be felt months later among European supply chains, according to logistics professor Jan Fransoo, in Hamburg. And when those customers stop stockpiling and return to a more normal order level, it will take time for those lengthy supply chains to adjust. Somewhere along the line, even after our trade relationship has settled down (hopefully), he warns that there could be a huge fall-off in European industrial production.
Official statistics on inventory build up can be volatile, Fransoo has produced some rough and ready numbers on the potential fall-out for European firms. If the UK imports around €300 billion (£270 billion) in physical goods from the European Union every year, he estimates an extra month of stockpiling, or about €25 billion of goods.
Total European industrial production is around €2.5 trillion a year, so his rough calculation is that UK firms are stockpiling around 1% of that; and if virtually all of that is being bought in the present quarter that means a massive 4% jump in European production.
That’s before any potential for over-reaction from stockpilers. “If this were all more or less true, the rebound on the bullwhip next year could be huge, with drops in import figures that would go well beyond the growth in the present quarter,” Fransoo adds.
Leavers might welcome such difficulties for our Continental neighbours as giving them added incentive to get back to the table and offer a better deal. But it scarcely needs saying that economic pain in Europe is not good for us here, given our close trading links.
And the bullwhip problem isn’t confined to the Continent, as it will almost certainly hit anybody over here exporting to the EU. Industry sources talk about whisky producers piling up stocks for Christmas, but planning to continue the production surge in the case of a no-deal Brexit, building up more inventory on the Continent. At some point the stockpiling boost for our own — admittedly smaller — export sector will fade, denting production and slowing economic growth.
The bullwhip can be countered with greater communication of demand along supply chains to avoid those larger ripples fanning out across wholesalers, manufacturers and suppliers. But given the posturing of the Westminster political bubble around the Brexit deal or no-deal — playing a game of ideological chicken with the country at stake — there’s no clear message to send; that’s why the country is running out of warehouse space for frozen and chilled food.
If there are no answers soon, what will our inept political class do when the entire country starts behaving like the Manns?
Susie Cummings, chief executive of Nurole, discusses working in the tech and headhunting sectors …
What do you do?
After a career in headhunting, I’ve set up Nurole, a tech platform that is disrupting the industry. It’s an invitation-only online platform where executives can see board level vacancies and apply, or recommend their friends.
We’ve been going for four years and have more than 40% of FTSE-100 chairmen and over 20,000 members in 100+ countries.
Positives?
I love being a tech entrepreneur. I get great satisfaction finding fantastic people who will transform organisations. It’s particularly rewarding putting brilliant executives into non-profits, where these individuals can make a huge difference not just to the charities but to their own sense of fulfilment. It’s also great being able to allow candidates to see roles they would otherwise never have seen. Like when Amazon UK chief Doug Gurr saw the Landmark Trust was seeking a trustee with digital expertise. As soon as he saw it, he knew it was perfect for him.
What do you dislike?
It’s really frustrating that some chairmen, CEOs and headhunters don’t see the benefits of what we’re doing. They want to keep with the old boy’s headhunting network. That really pisses me off. Am I allowed to say that?
What was your biggest break?
There were two really. Realising in 2014 that the headhunting model was broken; that encouraged me to set up Nurole. And when Advent Venture Partners, the venture capital firm I was working for at the time, rejected my idea of setting up an executive recruitment network.
I met Philippa Rose, one of the headhunting queens of the day, and she said come and join me. I said I was pregnant, but she said: that’s only temporary, and hired me anyway. It was the start of a 30 year career that saw me set up my own firm, Blackwood, in 1999.
Any setbacks?
Oh, lots. I hated authority. That got me kicked out of school. I didn’t go university, ran up horrible debts and had a gambling problem. Not going to university has given me a sense of insecurity, which makes me feel I have to prove myself every day. Even now at 60-years-old. Forgetting my passport when I was flying out to pitch for Morgan Stanley was a bad setback, too. I’d only just set up Blackwood and it was a £20,000 a month retainer. I had to cancel the trip. I still wince at that one.
Life-work balance?
It’s good now. After 40 years commuting in to the City on the tube, I now live in Notting Hill, five minutes from the office. Also, my son Oliver has joined Nurole from Goldman Sachs’ private equity arm and is my chief operating officer, while my youngest, Ned joined us from insurance broker Marsh and now heads our VC practice.
My daughter set up Potage.com, a meals delivery business, and every Friday we have Potage meals at work. To cap all that, my Anglo-Argentine partner whisks me off to Argentina every January and February. He’s set up wifi in the pampas so I can work there.
Tips?
Be brave, follow your instincts and remember you’re never too old to start a company.
