ALEX BRUMMER: The virus winners and losers of business

Covid-19 has not proved to be disastrous for every enterprise. Contrast B&Q owner Kingfisher with Whitbread.

As Britain’s biggest hotelier, Whitbread is hard hit and 6,000 staff, both in management and at Premier Inn sites, are to lose their jobs. Even in August, when coastal venues were crowded, average occupancy was a modest 51 per cent.

With a zig-zagging Government now telling people to work at home again it is hard to see Premier Inn’s staple of business travel moving into high gear soon.

Kingfisher has been seen as a broken model for years because of the decline in DIY. It was saved by the rise of the Screwfix online offering for the trade. All this has been turned on its head.

The combination of a good summer and lockdown has seen big box B&Q stores rise phoenix-like from the ashes as home improvement, better gardens and outdoor features have been in huge demand.

After initially being closed in lockdown B&Q has been making hay since it reopened. Both householders and tradesmen, using the Tradepoint channel, have reinvigorated sales and for once have outpaced Screwfix.

Much of the credit for managing the pandemic must go to Kingfisher’s relatively new chief executive Thierry Garnier. With business good, it has done the right thing and refunded £23million in furlough cash.

The big surprise is the 62 per cent rise in profits on lower turnover. But Kingfisher is careful to say that the improvement is exaggerated by one-offs and some of the Government schemes in the UK and at Castorama in France. A shift from trade sales to retail, where margins are better, also helped.

Although he is too polite to say so Garnier will not be too perturbed by the instruction to try to work from home. 

One only has to look at my own neighbourhood Whatsapp group in the leafy south-west London suburbs, where messages are exchanged about borrowing a ‘star key set’ for home fixing, to recognise changes in consumer habits. 

Investors like what they see and marked the shares up almost 10 per cent valuing the group at £6.1billion – that’s thrice the worth of M&S.

Whitbread, meanwhile, will have a longer wait for its recovery moment although chief executive Alison Brittain remains optimistic about Premier in spite of taking some tough decisions. She is relieved she sold Costa and notes new owners Coke are making sacrifices.

Armed with cash from this year’s £1billion rights issue, Brittain still sees opportunity in Germany’s fragmented budget hotel market and plans to bulk up soon.

She claims no interest in a return to banking as the next Lloyds chief executive and a preference for a retirement job as a non-executive. But you can never tell.

Arm wrestle

Whether the Government will intervene to keep £30billion Arm Holdings out the clutches of Santa Clara-based Nvidia is a moot point.

At last a minister recognises publicly how important the Cambridge firm is to Britain’s tech future. Digital minister Caroline Dinenage praised UK tech, noting that Arm is at the cutting edge of innovation, designing processors for worldwide customers.

There was also some gobbledegook about sitting at the heart of the ‘semiconductor ecosystem’. Having made the case for its significance to Cambridge and the nation, Dinenage reached the mighty conclusion that the Government would ‘not hesitate’ to investigate further.

That is hardly the kind of fierce warning that will have ruthless sellers Softbank or ambitious Nvidia boss Jensen Huang quaking in their shoes.

There is not a hint that there are going to be fireworks if Arm ends up in the wrong hands. Where is the passion about defending and nurturing the UK’s nearest thing to a tech champion?

Little Britain

Labour has been playing the patriotic card at the party’s virtual conference with deputy leader Angela Rayner laying into British Airways and British Gas for betraying the national brand for allegedly abusing furlough by sacking people.

Aside from the fact that BA faces an existential crisis because of the closure of the north Atlantic corridor, Rayner seems unaware that it was under the last Labour government that almost every company with British in the name was sold off to overseas buyers.

The list includes British Airports Authority, British Plaster Board, British Oxygen, British Energy, British Steel and Associated British Ports.

Patriotic? Bah, humbug!