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It’s bad enough that the big supermarkets, sporting their best sales figures in years, were given a pandemic freebie by Rishi Sunak in the form of a year’s relief from business rates. But the case of the discount retailer B&M, clinging to its £38m from the Treasury even as it pays a £250m special dividend to shareholders, is more extreme.
B&M in April found itself in a near-perfect competitive position. Since it sells food, it was classed as an essential retailer, and so could keep its 656 UK stores open. But, because its shelves are also stuffed with toys, games, furniture, stationery, rugs and so on, it also had the run of the inessential retailing pitch.
B&M is a slick and growing business, but its numbers for the April-September period were off the chart. Like-for-like sales improved by 30% in the UK. Top-line profits almost doubled to £296m.
Like the supermarkets, B&M mutters about how business rates are out of date (true) and how Amazon also got lucky in the pandemic (also true). But that’s not the point. A property-based rates system is the one we have currently and the relief was supposed to help stores that were closed. Where doors were open – indeed, enjoying booming demand – there was no case for a giveaway. The Treasury messed up.
B&M has returned £3.7m of furlough money “in light of the strong results”, which suggests a guilty conscience of a sort. So why shouldn’t the same logic to the £38m of rates relief? B&M’s plea that the business suffered extra PPE and cleaning costs doesn’t cut it: extra demand will have covered that bill and more.
Simon Arora, the chief executive, and his brother Bobby, will share £37m from the special divi thanks to their 15% shareholding. Don’t confuse that sum with the nearly identical quantity of rates relief – they are different things.
But if the coincidence maximises Sunak’s embarrassment, so it should. The chancellor (or rather us) have received an expensive lesson in how shameless some boardrooms can be.
GVC promises to better monitor gamblers. Better late than never
GVC, the owner of Ladbrokes and Coral, is having an overhaul. It will rename itself Entain, presumably in the hope you’ll regard gambling as merely a branch of the cuddly entertainment industry.
It will exit its last “grey” markets, the industry’s euphemism for countries where gambling is largely illegal. GVC will also upgrade its software to identify problem gamblers more “proactively”. And, says Shay Segev, the chief executive, “we are absolutely committed to the highest standards of corporate governance”.
Better late than never. It has been a long time since GVC, now a £6bn member of the FTSE 100 club, ceased to be a stock market tiddler. But the self-congratulatory tone would be easier to swallow if the company conceded that external pressures may have played a role in this shake-up.
For starters, HM Revenue and Customs, as Segev learned in his first week in the job in July, wants to know about the company’s past acceptance of bets from Turkey, one of those “grey” markets. The taxman suspects “potential corporate offending by an entity (or entities) within the GVC group”.
Then there’s the UK government’s review of betting laws, with major reforms possible. So, yes, best to sound keen about something that could happen anyway.
Still, Segev’s new governance aspiration has yielded one tangible break with predecessor Kenny Alexander’s lively reign. GVC says it has “no intention of employing sitting MPs in future”. That’s a reference to this paper’s revelation this week that £50,000 was paid to the Tory MP Philip Davies for “providing advice on responsible gambling and customer service” between July and September this year.
Sadly, Segev, who was promoted from chief operating officer, was too busy on Thursday to explain why GVC ever thought employment of MPs was appropriate.
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