Wednesday Update

DB Live: MPs vote on IR35; Sainsbury’s uplift; Wigan FC

10pm: IR35 to go ahead

The 2021 rollout of IR35 reform in the private sector has been accepted as part of the Finance Bill and will go ahead, after MPs voted against an amendment that would have delayed the changes until the 2023/24 tax year.

Seb Maley, CEO of specialist firm Qdos, commented: “IR35 reform in the private sector has effectively now been signed off and will arrive in April 2021.

“Despite concerns raised by a number of MPs, who rightly exposed the flaws of this legislation and made it clear they do not believe changes are necessary, it seems there’s no turning back now.  

“The reform is short-sighted and if mismanaged poses a risk not just to contractors but to hiring organisations and recruiters.

It’s therefore up to private sector firms to prepare for the changes, which can be managed with the right approach. However, work must start immediately – I can’t stress enough how important this is.”

4.45pm: London close

The FTSE 100 recovered from a mid-day slump to close just marginally lower at 6,157.96 −11.78 (0.19%).

3.30pm: John Lewis to close some stores

John Lewis will keep some stores of its department stores closed permanently, it emerged today.

Upmarket department store Harrods will axe 672 jobs because of the coronavirus pandemic, which kept its flagship branch in central London closed for three months during the UK lockdown.

The business, owned by the Qatar Investment Authority, told staff it needed to cut up to 14% of its 4,800 workforce.

Full story here

3pm: Wigan Athletic in administration

Wigan Athletic Football Club plunged into administration today, the first English professional club to fall victim to the coronavirus pandemic, and raising fears that others may follow.

The Lancashire club, formed in 1932, have won all three of their league games since the resumption of the Championship season on 20 June with all games played behind closed doors.

While Premier League teams can rely on television income to compensate for up to £5m of lost gate receipts per game, the lower league teams have been forced to put playing staff on furlough.

Wigan Athletic were elected to the Football League in the 1970s and until 2018 were owned by Dave Whelan. He led the club’s fairytale rise from the fourth tier to the Premier League in 2005 and FA Cup winners in 2013.

Former professional footballer Whelan sold the club to Hong Kong-based International Entertainment Corporation in November 2018 and there was a further change of ownership in May when Next Leader Fund took control.

Paul Stanley, Gerald Krasner and Dean Watson of Begbies Traynor have been appointed as joint administrators.

1.30pm: Symbiosis secures new funding

Symbiosis Pharmaceutical Services, the Stirling-based drugs company, has secured £1 million from Allied Irish Bank to support its development and enable it to take on 20 additional staff.

Full story here

11.30am: Top Shop owner cuts jobs

TopShop Edinburgh

Top Shop, Burton’s and Dorothy Perkins owner Arcadia is to axe up to a fifth of its head office jobs.

The announcement comes as Scottish value fashion retailer M&Co, which previously traded as Mackays, is considering options which include a sale of the Renfrewshire-based business.

Full story here

11.10am: TC Biopharm’s Covid trial

Biotechnology company TC BioPharm, based at the Maxim Offices off the M8 near Glasgow, is starting initial clinical trials, anticipated to be at the Edinburgh Royal Infirmary, for an experimental therapy designed to kill COVID-19 infected cells.

Full story here

11am: Virgin branch closures

High street bank Virgin Money will resume plans to shut or merge 52 branches and axe 300 jobs after putting the cutbacks on hold during the coronavirus lockdown.

Full story here

10.40am: Sturgeon urged to reject quarantining English

Nicola Sturgeon has been urged to rule out the prospect of people travelling from England to Scotland being quarantined.

The First Minister has failed to rule out the idea, despite warnings from the tourism industry that English holidaymakers are demanding refunds because of the threat.

The Scottish Tories say this would decimate the hospitality sector north of the border just a fortnight before it is set to reopen.

10am: RSM saves 155 polystyrene jobs

RSM Restructuring Advisory has saved 155 jobs in Scotland and England following a pre-pack acquisition of polystyrene products firms Jablite and Styropack (UK).

The administrators sold the business and assets of both companies to a new Group jointly owned by two former directors of the Group and BEWi Synbra Group.

The businesses operated across five sites in Aberdeen, Blackburn, Howden (Yorkshire), Ford (West Sussex) and Belvedere (South-East London).

RSM was instructed to find a buyer when the group’s directors concluded that they would be unable to trade through the financial and operational impact of the UK lockdown.

9.30am LendingCrowd accredited for loans scheme

Stuart Lunn

LendingCrowd, the Edinburgh-based platform, has been approved for accreditation by the British Business Bank under the Coronavirus Business Interruption Loan Scheme (CBILS).

Full story here

9am: Cello tops risers

Cello Health topped the early risers, surging 43% higher to 160.5p after agreeing to a takeover offer from private equity firm Arsenal Capital Partners.

The bid values the health advisory firm at £178.8m, or 161p per share, a 44% premium to Tuesday’s closing price.

“The Cello directors are confident that, as part of the value demonstration platform with Arsenal’s backing, Cello will be optimally positioned to accelerate its current strategy and capitalise on a broader range of opportunities,” said chief executive Mark Scott in a statement.

8.40am: London open

London stocks were little changed in early trade on Wednesday amid ongoing concerns about the coronavirus pandemic, as investors eyed the latest reading on the UK manufacturing sector.

The FTSE 100 was down 0.1% at 6,165.56.

7.30am: Sainsbury’s lifted by lockdown

Sainsbury's Local

Britain’s second biggest supermarket chain said underlying retail sales rose 8.2% year-on-year in its first quarter to 27 June, driven by the country being in lockdown through the period.

Chief executive Simon Roberts, who succeeded Mike Coupe on 1 June, said total grocery sales increased 10.5% in the 16 weeks as shoppers returned to big weekly shops and spent more online and in local convenience stores.

Sainsbury’s said it still expected flat underlying pretax profit for the full 2020-21 year, with the impact of COVID-19 expected to be more than 500 million pounds ($618 million) broadly offset by business rates relief and stronger grocery sales.

Upper Crust axing 5,000 jobs

The company behind railway station and airport food outlets Upper Crust and Caffe Ritazza is planning 5,000 job losses across the UK, more than half its workforce.

SSP Group said the proposed introduction of air bridges and the start of the holiday season may lead to some limited return of short-haul air travel demand in July, although capacity is expected to be significantly reduced, and long-haul travel is anticipated to remain at extremely low levels.

With the current social distancing measures remaining in place, the recovery in passenger numbers in the rail sector is expected to be prolonged.

“We have therefore come to the very difficult conclusion that we will need to simplify and reshape our UK business,” it said.

It expected only a fifth of its 2,800 outlets to be open again by the autumn.

“If the pace of the recovery continues at the current level, this could lead to up to c. 5,000 roles becoming redundant from within the head office and UK Operations,” it said.

7am: Babcock CEO

Archie Bethel

Babcock International Group, the aerospace and defence company, has appointed David Lockwood as CEO, succeeding Archie Bethel, pictured, who earlier this year announced his intention to retire.

Full story here

Kier Group resilient

Construction company Kier Group said it is considering another rights issue to raise cash after Covid-19 adversely affected its revenue and resulted in it incurring additional costs, some of which are expected to be treated as exceptional. 

However, the group’s underlying performance has remained resilient, as it has continued to deliver critical national infrastructure projects and provide services across a range of sectors with, on average, c.80% of the group’s sites remaining open during the period. Almost all of the group’s sites are now open.

Today’s agenda

Hearts and Partick Thistle take their claim for damages against the SPFL to court.

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