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Everything you need to know...

That’s it from the Business Breakfast Blog this week.

I’ll be back on Monday with more news from across the world of business.

Until my return, here are some of our top stories:

Shock as administrators set to be appointed at Clugston Construction

Planning chiefs back Birmingham’s tallest building

North East pioneering mixed martial arts publishers go global with seven-figure investment

Property giant names its five º£½ÇÊÓƵ cities to watch in 2020

Just how green is energy generation in Wales? Tony Lodge explores

Aramco valued at $1.7tn in IPO

Saudi Arabia’s state-owned oil company Aramco has announced a stock price of 32 riyals, or 8.53 US dollars per share, laying the groundwork for a $25.6bn sale in what could be the biggest initial public offering (IPO) ever.

The figure released on Thursday also affirms a $1.7tn valuation for Aramco, exceeding both Microsoft and Apple.

The sale is part of a plan by Saudi Arabia’s Crown Prince Mohammed bin Salman to sell a 1.5% stake in the country’s crown jewel to help fuel the kingdom’s economy.

Boohoo founders raise £140m through share placing

The co-founders of fast growing Manchester fashion brand Boohoo have sold shares in the group worth £142.5m.

Mahmud Kamani, 55, and Carol Kane, 53, who founded Northern Quarter-based Boohoo in 2006, between them sold 4.3 per cent of Boohoo’s equity through a placing to institutional investors.

This has reduced their combined holding to 15.8 percent.

Kamani, the company’s executive chairman, sold 35 million shares at 285 pence each, reducing his stake to 13.1 percent, while Kane, an executive director, sold 15 million shares at the same price, cutting her holding to 2.7 percent.

The pair have agreed that they will not, without the company’s and joint global co-ordinators’ prior written consent, dispose of further ordinary shares for a period of 18 months.

Lacklustre November for retailers as shoppers hold off ahead of Black Friday

High street retailers suffered a disappointing November in the critical build-up to Christmas as shoppers held off on spending ahead of Black Friday, figures suggest.

In-store sales declined by 1.9% year-on-year in November from an already negative base of minus 2.6%, according to BDO’s High Street Sales Tracker (HSST).

Figures across the month suggest that discounting has become increasingly important for driving consumer spending, with retailers experiencing a lacklustre month before a substantial increase in sales the week of Black Friday.

Black Friday fell a week later this year, distorting year-on-year figures, but BDO said in-store like-for-like sales were down 17.14% on the same week last year - one of the worst weekly results since the “Beast from the East” hit Britain last March.

However, the week of Black Friday provided retailers with a much-needed boost, with in-store and non-store sales soaring by 24% and 28% respectively.

Sophie Michael, head of retail and wholesale at BDO, said: “The figures for November are difficult to interpret as a late Black Friday means year-on-year comparisons are not straightforward.

“If we adjust for the impact of Black Friday in 2019, the overall results for November were more respectable with in-store sales jumping by approximately 3% and non-store sales climbing by around 8% year-on-year.

“What is abundantly clear, however, is just how important the promotional event and heavy discounting have become to the high street. Shoppers simply weren’t willing to part with their pounds until hefty price cuts took place, as the steep decline the week before Black Friday illustrates.”

She added: “Given the poor performance of º£½ÇÊÓƵ retail for the year and the distressing dependence on steep discounting, retailers will be desperately hoping that this December won’t prove, yet again, to be another disastrous month of Christmas trading.”

Hitachi wins £350m contract to build trains for the West Coast Main Line

Hitachi Rail has won a £350m contract to build trains for the new franchise operating on the West Coast Main Line.

The company will build 23 new intercity trains for First Trenitalia, who picked the firm to build the carriages for its Avanti West Coast rail service.

In total Hitachi will build and maintain 135 carriages from its factory in Newton Aycliffe, County Durham, which has been fighting to win work after a number of its contracts came to an end.

Although the Avanti franchise is set to begin on December 8, the new trains will not be introduced until 2022.Hitachi Rail has won a £350m contract to build trains for the new franchise operating on the West Coast Main Line.

The company will build 23 new intercity trains for First Trenitalia, who picked the firm to build the carriages for its Avanti West Coast rail service.

In total Hitachi will build and maintain 135 carriages from its factory in Newton Aycliffe, County Durham, which has been fighting to win work after a number of its contracts came to an end.

Although the Avanti franchise is set to begin on December 8, the new trains will not be introduced until 2022.

Brexit uncertainty continues to hit recruitment

Fewer people have been found permanent jobs by recruitment agencies amid continued uncertainty over Brexit and the General Election, a new study suggests.

Research among 400 recruitment and employment firms indicates companies are delaying or even cancelling plans to hire staff.

The uncertain outlook has also affected the number of vacancies and candidates looking for work, the Recruitment and Employment Confederation (REC) and KPMG said.

Their research found the number of candidates looking for work through recruitment agencies had fallen sharply in recent weeks.

Pay for both permanent and temporary jobs was increasing at slower rates, said the report.

The number of people placed into permanent jobs fell for the ninth month running in November, while growth in temporary placements was only said to be marginal.

James Stewart of KPMG said:

The uncertainty around the upcoming election and Brexit outcomes are playing havoc with the º£½ÇÊÓƵ jobs market, as clearly employers and jobseekers are taking a wait and see approach before committing to growth or movement.

However as big business set out their strategies for the coming year, they will need to start making key decisions on hiring and investment, while those seeking new roles will be hoping to get their CVs out in the new year once the dust has settled.

Neil Carberry, chief executive of REC, said:

Today’s figures show exactly why this election needs to focus on work. The jobs market is still strong, but uncertainty is taking its toll.

Permanent placements have now fallen for nine months in a row and vacancies growth is at its weakest for a decade.

Any incoming government must move quickly to boost business confidence and implement policies that will help companies and individuals to make great work happen.

Insurance group Phoenix snaps up rival in £3.2bn deal

Phoenix Group has cemented itself as Europe’s biggest owner of life assurance funds closed to new customers with a £3.2 bn deal to buy up rival ReAssure.

Swiss Re, the world’s second-largest reinsurer, had wanted to spin off its ReAssure division earlier this year with a stock market flotation, but pulled it in the summer.

The deal will see Swiss Re pocket £1.2bn in cash from the deal and also take a stake in Phoenix of between 13% and 17%, while ReAssure’s minority shareholder, MS&AD Insurance Group, will receive shares in Phoenix representing an 11% to 15% stake.

It means the new business will have assets under its control of £329 billion, with 14.1 million policies, and comes three years after Phoenix snapped up Standard Life Assurance in 2016 for £2.9 billion, which saw Standard Life Aberdeen also retain a stake in combined group.

Swiss Re chief executive Christian Mumenthaler said: “Phoenix is a natural acquirer of ReAssure and has a proven track record of delivering value to both shareholders and customers.”

FTSE and pound latest

The FTSE-100 index at 8:15am was up 27.92 at 7165.77.

The pound at 8am was 1.3152 dollars compared to 1.3163 dollars at the previous close. The euro at 8am was 0.8444 pounds compared to 0.8435 pounds at the previous close.

Refund delays for Thomas Cook customers

Around one in three of the first Thomas Cook customers to claim refunds will not be paid within the 60-day target, according to the aviation regulator.

More than 22,000 people who submitted their online forms on the opening day of the Atol refund programme cannot be paid until they provide additional information, the Civil Aviation Authority (CAA) said.

The scheme was launched on October 7 and the CAA initially aimed to pay all valid claims within 60 days, which falls on Friday.

The regulator insisted it wants to issue refunds “as soon as possible” and urged claimants to check their email junk and spam folders if they have not heard anything by the end of the week.

Approximately two-thirds of the 67,000 legitimate claims made on the first day will be paid “by the weekend”, according to the organisation.

An additional 90,000 direct debit customers were refunded in October, meaning the amount of money paid back so far has reached nearly £160m.

The CAA has not received claims relating to around 40,000 of the 300,000 cancelled holidays eligible for a refund.

Customers have until September next year to submit the online form.

CAA chief executive Richard Moriarty said:

We thank consumers for their ongoing patience as we continue to do all that we can to work through the º£½ÇÊÓƵ travel industry’s largest ever refunds programme.

I appreciate that this is a concerning time for Thomas Cook customers who are waiting for their refunds, particularly at this time of the year.

We will have already paid out more than £160m by this weekend and will continue to pay claims as soon as possible.

Where we have had to request further information, we encourage those consumers to respond at the earliest opportunity so that we can finalise these payments.

I would like to reassure consumers that all valid Atol-protected payments will be refunded.

Thomas Cook collapsed on September 23, putting 9,000 º£½ÇÊÓƵ jobs at risks and disrupting the travel plans of one million holidaymakers with future bookings.
Around 140,000 passengers already overseas were brought home by the CAA over two weeks.