Sunak’s hospitality bailout is only enough for now, just

It’s something. The chancellor’s Omicron support package for the hospitality sector is worth £1bn, enough for Rishi Sunak to claim he listened to the cries of distress from pubs, restaurants and leisure businesses and acted. And, to be fair to him, there was applause from the main industry lobby groups. Kate Nicholls, chief executive of UKHospitality, called it a “generous package”.

It is hard, though, to escape the sense that the measures could quickly be overtaken by events. This is a limited package designed merely to catch up with the current “stealth lockdown” environment, meaning consumers’ sensible decision to tone down their partying. It would not be sufficient to cope with a ramping up of restrictions beyond plan B.

One hopes the Treasury knows as much. The focus was on parcels of grants – up to £6,000 for each premise – plus reimbursement of statutory sick pay of up to two weeks a worker for small and medium-sized employers. That’s a limited bailout from the point of view of businesses, but it does nothing for employees who would be at risk of losing their jobs in a proper lockdown.

Nor, as the Resolution Foundation thinktank pointed out, does it offer support for workers on zero-hours contracts who will see their hours reduced. They have been the biggest losers during the toned-down season of socialising.

The open question is what happens if heavier restrictions are introduced after Christmas. Some version of a sector-specific furlough scheme would still seem essential. Sunak has provided a holding position; it cannot be the last word on the matter.

Call it a windfall from windfarms. Greencoat Capital, a fund manager that was early into renewables investment in 2009, including windfarms in the Irish Sea, is being bought by the industry giant Schroders. Or, at least, a 75% stake is changing hands in cash at an enterprise value of £358m. Greencoat’s four founders, plus a few staff, currently own the business, so that’s a very large payday for them. To keep the sellers keen, Schroders is also offering a potential three-year earn-out worth up to £120m. Not bad.

For the buyer, it’s a very on-strategy transaction. Schroders’ chief executive, Peter Harrison, has been pushing hard into responsible and green investing in recent years and Greencoat is one of the fastest-growing names in the specialist sector (one of its investment trusts is a member of the FTSE 250 index). The target’s £6.7bn under management barely registers against Schroders’ £700bn, but the direction of travel is clear.

One cannot say Schroders is getting an out-and-out bargain, however. Greencoat generated revenues of £38.2m last year and made pre-tax profits of £20m. Even if one assumes a one-quarter uplift this year, Schroders will be paying about 20 times earnings. That’s steep for a fund management business by traditional yardsticks.

A “full, but not excessive” price, said Barclays’ analysts, and, yes, two factors probably support that generous verdict. First, with a shove from Schroders’ marketing muscle, Greencoat should be able to accelerate its push into the US; at the moment, the business is primarily a UK and continental European backer of windfarms and solar, biomass and heat projects.

Second, money is shifting like never before into renewables and energy transition. Low wind speeds in Europe have been an operational problem this year but haven’t affected investment appetites one jot. Schroders is an old and canny outfit: it has probably called this one right.




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