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08 NEWS THURSDAY 2 MARCH 2017 CITYAM.COM PepsiCo says almost 400 jobs at risk from Walkers factory closure EUROTUNNEL ZOOMS AHEAD Groupe Eurotunnel announces “best year” ever REBECCA SMITH @BexKSmith PEPSICO, the US owner of brands including Pepsi and Tropicana, yesterday outlined plans to close its Walkers Snacks factory in Peterlee, County Durham, putting 380 jobs at risk. Under the plan, production at the plant would be moved to other UK sites, PepsiCo said, as it looks to find “crucial savings” and bolster the business’ long-term prospects. Production was halted on Tuesday and again yesterday. The factory makes a range of popular Walkers brands, including Wotsits, Cheetos and Walkers Sensations. Manufacturing managing director at the Peterlee site, Tracey Foster, said union consultations had begun. “We appreciate this is upsetting news for everyone at the Peterlee site. It is a difficult proposal for us to put forward and we want to make clear that it in no way reflects the performance of our colleagues at Peterlee, who we are grateful to for their hard work and commitment,” ,” Foster said in a statement. GMB regional organiser Michael Hunt said: “It wasn’t long ago that the government said they wanted to reinvigorate the region... but the opposite appears to be true.” CHANNEL Tunnel owner Groupe Eurotunnel yesterday said its profits had shot up, despite Eurostar passenger numbers being “badly affected” by terrorist attacks in France. Net consolidated profits were €200m (£170m), up from €75m for 2015. Unite warns on 1,160 jobs at risk at Ford car plant REBECCA SMITH @BexKSmith UNITE has said up to 1,160 jobs are set to go at Ford’s Bridgend plant by 2021, after company bosses confirmed in meetings yesterday that it expected jobs to go over a five-year period. The union has warned that workers at the plant it will be “one step closer to strike action” if the company doesn’t commit to protecting jobs. At the moment, the plant’s headcount is 1,760. Ford said it had shared a five-year outlook based on what the firm knows today with its union partners, which projects the loss of the 1,160 members of staff if contracts are not renewed. “This shows healthy volumes to occupy the current workforce over the next two to three years,” the car group said. “Beyond that, identified workload is reduced and while such a forecast is not unusual, given the cyclical nature of our business, it is a concern, and we fully understand that. “Ford has therefore proposed a jointworking party with its union partners, Unite and GMB, to identify future business opportunities.” Ford added that the Bridgend operation would need to “ensure its competitiveness” and address some of the “current concerns relating to the plant’s efficiency”. Unite general secretary Len McCluskey visited the site yesterday for meetings involving union reps, workers and the company. He said: “Unite members are committed to Ford, the Welsh Assembly is committed to Ford, all we need now is for Ford to commit to its workforce. That means investment, new product lines and a clean plan for the plant’s future.” Meanwhile, GMB organiser Jeff Beck said: “The nightmare for our members at Bridgend has unfortunately come true.” He said the union’s first priority is to “defend our members’ jobs” and will consult with them before deciding what action to take. The Bridgend plant makes around 250,000 engines a year for Jaguar Land Rover, as well as 500,000 of Ford’s Sigma engines, but it is due to stop producing both. Boots moves to ditch 220 photo labs as shoppers embrace digital JASPER JOLLY @jjpjolly BOOTS last night announced it will close 220 of its photo labs across the UK, including five in London, as weak demand for photo film services finally takes its toll. The closure of the in-store labs will put 400 jobs at risk, although a Boots spokesperson said the company would try to offer retraining and opportunities for other roles. Staff were told of the job cuts yesterday, with the closures expected to be completed by around the end of August. Five of the closures will occur in London, with 100 photo labs remaining in the UK as the company moves its focus increasingly to unmanned printing kiosks. The pharmacist has more than 3,000 kiosks in around 1,000 of its 2,500 stores across the UK, which have replaced photo labs as demand for physical film has plummeted in the face of digital photography.
CITYAM.COM THURSDAY 2 MARCH 2017 NEWS 09 Premier Oil’s shares tumble as it reveals new refinancing terms COURTNEY GOLDSMITH @courtneynoelg NORTH Sea-focused Premier Oil has taken a step forward on its drawn-out refinancing programme as it announced convertible bondholders came to an agreement with the firm’s amended terms. The new terms to its $245m (£199m) convertible bonds were approved by an ad hoc committee representing 47 per cent of its convertible bondholders. Premier said it will look to implement the terms through an extraordinary resolution after 50 per cent of holders have agreed. Shares tumbled as much as seven per cent yesterday before closing down 6.12 per cent at 65.25p. The embattled oil firm has been in talks with lenders over its $2.8bn debt pile for nearly a year, and in January it said talks were at an “advanced stage”. Pyrrho Investments, one of the three largest convertible bondholders in Premier Oil, said it was “deeply dissatisfied” with the offered terms and the consultation process to date and noted a lack of transparency. PREMIER OIL 78 76 74 72 70 68 66 64 P 1 Mar 65.25 23 Feb 24 Feb 27 Feb 28 Feb 1 Mar The Thames Tideway tunnel is forecast to cost a total of £4.2bn by its completion London’s super sewer could see Thames Water bills climbing £25 MARK SANDS @MkSands LONDON’S new super sewer could add up to £25 a year to water bills in the capital, according to the UK’s public spending watchdog. The Thames Tideway Tunnel will cost a total of £4.2bn, but the National Audit Office said it remains uncertain what customers will pay. It added £13 a year to Thames Water customers’ average bills in 2016-17, but that could almost double to £25 by the early 2020s. A Thames Water spokesman said users would also gain from savings: “Average annual overall water and wastewater customer bills are expected to remain at, or very close to, their 2015 level of £370 (before inflation) until at least 2020.” The RMT union signals more industrial action REBECCA SMITH @BexKSmith THE RMT has announced that London Underground members will be taking industrial action from next Tuesday. The dispute is over a “breakdown in industrial relations” according to the union, after a recent ballot recorded 67 per cent of those voting in favour of strike action and 88 per cent voting in favour of action short of a strike. The ballot had a 43 per cent turnout. Its fleet members have been instructed to begin a work-to-rule from 00:01 next Tuesday 7 March “until further notice”. Instances where they’ve been told not to work include: not working any overtime or attending training courses outside of normal working hours, not to carry out any higher grade duty work and not to change any shifts or work locations to assist with maintenance. Mitie flogs its troubled healthcare firm for £2 COURTNEY GOLDSMITH @courtneynoelg MITIE yesterday agreed to sell its loss-making home healthcare business to the St Paul’s-based specialist investor Apposite Capital for a nominal £2. Shares in the FTSE 250-listed service provider rose more than six per cent before closing up 3.58 per cent at 214.1p in London last night. The firm has had a challenging year with both its chief executive and finance director stepping down over the course of just a few months. It has also issued three profit warnings since September 2015. LUDWIG BURGER DRUGS giant Bayer yesterday sold €1.46bn (£1.25bn) of shares in its chemicals subsidiary Covestro, cutting its stake to 53.3 per cent as it raises cash for its takeover of seeds maker Monsanto. The sale of 22m shares, or 10.9 per cent of Covestro’s capital, at €66.50 each to institutional investors, puts the chemicals maker on track to enter Germany’s blue-chip index as it boosted the amount of shares that can be openly traded. Shares in Covestro, the maker of transparent plastics, foam The group announced in November it planned to withdraw from the healthcare market, and today it revealed a £36.8m writedown on the business in addition to a £115.3m writedown announced in the first half of the year. Mitie will contribute £9.45m by making payments to Apposite in April and July to fund the healthcare business’ trading losses and the cost of the turnaround plan. In its half-year results, Mitie said weak business confidence across the UK after the vote to leave the European Union affected client investment plans, with the result that reductions in Bayer sells 11 per cent stake in chem firm Covestro for €1.46bn chemicals and coatings ingredients that Bayer listed in October, hit a record high of €73.27 last week, more than three times their initial offer price of €24. The shares were down 5.6 per cent at €66.49 last night, just below the price of the block trade that Bayer placed late on Tuesday. Bayer reiterated that while it will keep a majority stake for now it still intends to sell all of its Covestro shares in coming years. Analysts at DZ Bank said Covestro was on track to join the DAX index of Germany’s 30 largest listed companies soon. Reuters higher margin project work and discretionary spend have reduced profits in its facilities management segment. Mitie’s construction and support service arms have performed better than expected through the initial impact of the Brexit vote. However, in January the group blamed falling profits on customers delaying orders market uncertainty. At the time the company announced that Suzanne Baxter would depart as group finance director on 10 February, to be replaced by Sandip Mahajan, who was previously at Balfour Beatty. Not for resale? Bunzl spashes out $160m on US mini-me business OLIVER GILL @ojngill SUPPORT services giant Bunzl yesterday snapped up a US competitor labelled a “mini-Bunzl” in a deal understood to be worth around $160m (£129m). Diversified Distribution Systems (DDS), a distributor of not-for-resale items to retailers and other general distribution customers, primarily in North America, is a large purchase for the acquisitive Bunzl, which splashed out £184m during 2016. Analysts at JP Morgan valued the deal at around $160m and said DDS was Bunzl subsidiary Schwarz. ADVERTISEMENT NEWS FROM THE CITY OF LONDON News, info and offers at www.cityoflondon.gov.uk/eshot High speed broadband for residents Over 7,500 residents living in the 12 central London housing estates run by the City of London Corporation will benefit from a new high speed internet service. New state-of-the-art equipment will be installed across the City of London, Hackney, Islington, Lambeth, Lewisham, Southwark and Tower Hamlets to provide speeds of up to one gigabit at affordable prices, and enable users to enjoy high bandwidth services. The decision to expand fibre optic broadband was approved recently by the City Corporation’s Community and Children’s Services Committee. Ideas needed for a Smarter City The City of London Corporation, in partnership with The City Centre and Brookfield Property Partners, is holding a competition to find new ideas across three ‘Smart’ themes to ensure that the City remains at the forefront of innovation. The first theme is ‘Smart Green Spaces’. More details from www.asmartercity.london
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