This is a City AM Studios production.
SPEAKER_01Hello and welcome back to Business as Usual with me, Martin Kimber. And me, Simon Hunt. Coming up on the podcast, Top City Wealth Manager Rathbones braces for a demanding internal overhaul after the regulator steps in.
SPEAKER_04As Greg's rolls out its first international airport bakery in Tenerife, we speak to travel business Collinson International about summer holiday delays and why airports have become such big business and potentially even a ripoff.
SPEAKER_01Plus, would you buy shares in FIFA? Football boss and scandal magnet Johnny Infantino reportedly wants to raise over $4 billion from outside investors. First up, Greg's shares have taken off, and so has the firm's international expansion. The Baker's stock jumped more than 10% this week after it ramped up plans to open new stores and shared its first overseas airport site in Tenerife. CCM's sausage role muncher and chief reporter Ali Lyon joins us in the studio. Ali, is Greg's becoming a global phenomenon?
SPEAKER_05If by global you mean uh catering to hungover tourists on their way back from Tenerife, uh then yes, uh, as you say, uh, the uh Greg's FTSE250 listed uh company uh has expanded into uh Tenerife and the sort of early signs of of that expansion plan, the first foray uh abroad since a rather failed experiment in Belgium that ended in in 2008. Uh Boss Rossian Curry says that they've gone early signs that it's going very well and that sausage rolls are rolling off the shelves in uh in Tenerife Fairport.
SPEAKER_01What's interesting is as we reported earlier in the year, um Greg's has become one of the most shorted stocks on the London Stock Exchange. Now suddenly the shares jump more than 10%. Um are there going to be some investors, some short sellers, I should say, who've been burnt like a charred steak bake? Uh yes.
SPEAKER_04You can tell where Simon Hunt spent most of his time on these scripts.
SPEAKER_05I actually had things to do this morning, Simon. Um they were, I think, second or third most shorted stock on the London Stock Exchange going into these results. Um and uh the results were very positive. Uh pre-tax profit rose by a fifth, revenue rose by 10%, causing the shares to pop uh quite considerably. Uh and as a result of that, maybe, maybe even because of that, that short seller pressure, um, the share, the the moves in the shares have been all the more exaggerated because of the the squeeze of short sellers whereby um they're forced to exit positions, or short sellers we should say, are people betting on a stock price to go down. Um, and then extricating yourself from those positions puts upward pressure on the stock, meaning that the sort of the lift that we're seeing, more than 10% rise in the share price, might be partly explained by those sort of structural things, as well as the fact that the machilates being sold at Greg's are going down very well in the summer months.
SPEAKER_04Surely it should be uh punishable by treason to short sell Gregs in the UK. I mean, that's that's just not right. Ali, a big name in the square mile, Wrathbones, has been under pressure from the Financial Conduct Authority, that's the FCA, to tighten up its governance processes. In plain English, what does that mean and how much is it going to cost them?
SPEAKER_05So, yeah, it was a really bad day for um wealth managers yesterday. SJP posted a pretty dire um set of results, but also, as you say, the main story in that space was was wrathbones. They are um facing uh 60 million pound hit from sort of sorting out um its sort of uh processes, uh uh overseeing what it calls its high-risk um uh sort of clients. Um and the sort of they the FCA last month basically put put some pressure on them to to sort out uh its its diligence processes after the basically the old management took their eye off the ball during the InvestTech acquisition uh of them that happened uh a couple of years ago. They are now basically spending a lot of money and a lot of resource putting it, uh putting things right, uh, and their share price has taken an absolute battering. It's down sort of 25% since Muse of that first emerged last month.
SPEAKER_04And Simon, they they weren't particularly happy with the way CTAM covered this story, were they?
SPEAKER_01Yes, I think we were told by uh the internal comms team that they were disappointed by our pessimistic coverage. So there we are.
SPEAKER_05So so so were international investors that are much more dispassionate than journalists, though I say.
SPEAKER_01One last thing before you go, Ali. Uh why is it that Muslims in the Middle East can't get enough of Manchester fruit drink Vimto?
SPEAKER_05Uh everyone's favourite drink that's an anagram of a vomit. I had no idea about this, that until this morning when you pointed out to me. Vimto, the uh the fruity drink made by a sort of Merseyside uh listed company called Nichols, um, is enormously popular uh among drinkers in the soft drink drinkers in the Middle East during the month of Ramadan. It's become a sort of Pavlovian thing that people want, whereby uh you think Ramadam, uh you think breaking your fast with a glass of Vimto. Uh, I'm told by uh Google AI search the Vimto recipe out in the Middle East is uh a bit stronger, a bit sweeter, and so it's particularly good at sort of re-energizing you after your fast. And and that has meant that they now sell 25 million bottles a year uh in the region. Um and the story here is that because of the Middle East conflict, they uh the uh nickels have brought forward a lot of their exports of Vimto to try and get ahead of any snares that might happen. Um and so sales in the region are up 6% year on year.
SPEAKER_01We get oil from the Middle East and they get Vimto.
SPEAKER_04I think that's a fair trade. Ali, thank you very much for coming in. Coming up after the break, airport lounges are big business as airports become more expensive and, frankly, a ripoff. We're joined next by the boss of one of Britain's biggest lounge businesses to talk about all the hurdles British holiday makers will be facing as they jet off on holiday this summer. Don't go away. Now, summer holiday season has officially taken off. Which inevitably means Brits abroad will now be encountering long EU immigration queues, rising airfares due to the Iran War, and even water shortages at some airports, as we recently saw at Gatwick. Christopher Evans is the CEO of Collinson International and joins us in the studio. Uh they run priority past the airport lounge access system. Chris, it's never smooth sailing trying to get away for summer, but it feels like we're encountering more obstacles uh than usual this year.
SPEAKER_02Yeah, I think we're seeing definitely a strong increase of travel overall. We've seen that over successive years. The particularly within Europe, the new entry system is an additional pain point that people have to cover off and encounter. And I think that's that's just starting to debed in. Um so, in general, people are experiencing busy terminals, certainly at this time of year, and trying to manage that journey.
SPEAKER_04When you're getting away from uh those busy terminals, obviously airport lounges are one safe haven to go to. They kind of used to be the preserve of the Amex gold card holder, uh, but it feels like they're much more ubiquitous and a lot more people sort of using them these days. Is that am I right in that?
SPEAKER_02Yeah, they're they're incredibly popular. I mean, we see demand for airport lounges rising across the globe. People are increasingly looking to make their travel journey more special. So, what used to be just a ability to get from A to B into your destination, people are looking to enhance that journey. Uh, lounge gives you that um area of opportunity to elevate that. As airports are busier, uh, there's even more demand for that. People trying to get away from the main concourse. So, yeah, we've certainly seen demand rising for that elevated experience and reaching more customers.
SPEAKER_01Do you also see evidence of, because of the sort of um disruption that we've seen, flight cancellations and the like, people spending more time in these uh lounges as as a sort of refuge from all of the chaos that's going on outside?
SPEAKER_02Yeah, it's interesting. We've seen, I guess, some of the dwell time change and adapt. Um, sometimes when when the journeys are quicker through the airport, people can arrive slightly closer to their departure time and maybe have a shorter dwell time. But yeah, as there's less uh certainty, people are then perhaps arriving earlier and then taking the opportunity to spend a bit more time in the lounge. Um, it's something we're quite mindful of. Uh, lounge is getting busy, as you say. Uh, so we are working hard to bring in more space, uh more lounges. We kind of added 15% additional size to our network, and we're putting in things like pre-book so you can actually uh book in advance and then your kind of space in the lounge is secure before you get to the airport.
SPEAKER_01Is this part of a sort of wider trend that we've seen in hospitality of premiumization, namely where people are not necessarily spending more over the course of a year, but you know, managing their spending tightly. But when they do spend, they want to maximise that experience, make it the best possible experience.
SPEAKER_02Without doubt. And I think travel is is an area that's had real focus. So um, you know, we know that there's uh challenges with cost of travel at the moment, there's challenges with cost of living. There was a recent report from Barclays that highlighted that um the majority of people will kind of save up and invest in that travel journey, particularly for those in the UK, but more generally, um travel is is is particularly of a focus. And yeah, people are looking to upgrade travel when they do, make it more special.
SPEAKER_04How do you maintain the exclusivity of an airport lounge if anyone with a Monzo premium subscription can buy their way in for 24 quid a pop? Like I said earlier, you know, it used to be that you had one of those credit cards made of metal and then you could go into a nice airport lounge, or you fly first class with uh somewhere like Emirates and you go into the first class lounge. How do you maintain that kind of premiumization if more and more people are going to them?
SPEAKER_02What we're seeing is the opportunity to look at uh increased customer segmentation to actually bring tiering into that lounge environment. Uh, we recently launched uh Priority Pass Private. I mean, that really sits at the top end, so that will get you out of the airport terminal, it will get you into a limousine straight to the gate. Um I I tested it myself in Vienna a few weeks ago. Um absolutely amazing, you know, in a in a BMW on the way back, right up to the plane and first on the plane. Um very, very different experience. That's the sort of experience you'd normally have if you're flying in a private jet. Um, we're also seeing an opportunity to create um enhanced access. So we've seen um in I was at Manchester recently, uh, we have some branded space for our customers in that airport and an opportunity to have a pre prioritised access for priority pass customers. Um we're really focused on trying to make sure our customers do have uh the access when they need it.
SPEAKER_01Um do you think airports are becoming a bigger and bigger business opportunity? Uh we heard this week that uh Greg's is opening a uh airport um site in Tenerife, its first uh overseas airport site. Uh Weatherspoons also planning more um airport locations. We also saw um WH Smith not too long ago uh sort of give up its high street presence, concentrate purely on travel destinations of which airports is the line's share. So it are lots of companies, not just sort of traditional travel businesses, but all sorts of companies, now looking at airports as a big opportunity.
SPEAKER_02I think how people see airports has definitely changed over time. It used to be just a means to check your bags in and get on the plane. It's actually part of the travel journey, and people are intentionally going earlier to enjoy their time at the airport. Um, you're seeing airports upgrading. Um, it was a huge investment in LaGuardia, totally transformational for that, for that airport. It's now a really great place to spend time. People are going there ahead to enjoy food, to enjoy um shopping, to enjoy airport lounges. So, yeah, it's definitely shifted in terms of how people see airports.
SPEAKER_04Just finally, obviously you've just touched on it there. Airports have become uh uh, in my opinion, terrifyingly a kind of experience kind of uh it has become an experience. I think they're becoming very expensive from what I've seen. Um, in fact, if you pay to go into an airport lounge, quite often it's actually better value than going, you know, for a pint at a bar uh just on the concourse. Are airports becoming a bit of a rip-off? And is that why you're seeing perhaps more people think actually an airport lounge is better value for money?
SPEAKER_02I mean, we're we're without doubt saying uh that being a contributing factor for why people are seeking using lounges, it's why it's really valued by our our customers. We we did a survey recently and said 63% of those that have priority pass through through the bank or the credit card would change cards if that benefit was taken away. So it's something that people really love. I think pressure on cost within airports kind of only adds to the the weight of importance for that lounge access to them. Um and I have to agree with you that the price and cost um in airports has has increased as we see generally with with inflationary pressure uh in airports, in cities, in bars.
SPEAKER_04Christopher Evans, CEO of Collinson International. I will see you in a uh an airport lounge very soon. Hopefully, one of those where you can pull your own pint. I really like those. Thank you so much for coming in. Thank you. Pleasure to be here.
SPEAKER_01And finally, in a shocking revelation, Gianni Infantino has been accused of crossing a line as reports emerge that the FIFA boss has been involved in conversations to sell off part of the Football World Cup. The former FIFA president and noted moralist Set Blatter said the close relationship between the FIFA president and the US president has reached a financial dimension that is deeply damaging to football. No one has the right to sell our game. Joining us now to discuss is our sports editor, Frank Dallaraz. Frank, would you buy shares? On a purely um investment basis?
SPEAKER_04Yes, because it clearly it's the City AM answer.
SPEAKER_03It's gonna be an attractive prospect to investors, no question. You only have to look at the sums that FIFA has raised from the last World Cup and they're talking about $15 billion over a four-year cycle, much, much increased on the previous one. Um, you would look at that and think you're gonna make get your money back easily, and there's ample room for growth. But obviously, there's more to this than that.
SPEAKER_01I've heard you in the office um complain about the hydration breaks in the World Cup. Presumably, if you became a shareholder, you would you would be the champion for these hydration breaks and all the money that they bring in.
SPEAKER_03I'm sure any investors would would champion um hydration breaks, halftime shows, and all the other sort of creeping commercial elements um that we saw at the World Cup and more, I'm sure. Um and I think that is that is at the root of the concern, actually. Uh that just in a huge backlash that is that you can only really compare to the European Super League. Um I I'm yet to see any fans or any um stakeholders really uh come out in support of this. Um and I think it is precisely because of concerns about what it will do to the game in the long term, and that this might be something that can't be sort of rowed back on later on.
SPEAKER_04But I didn't know that well, I don't know much about football, but um just because of the sheer amount of corruption that we've seen in FIFA lately, I didn't know it was actually a not-for-profit organization. But this would uh potentially see it become a kind of company and see Gianni and Fantino become uh potentially its sort of chief executive if if this were to happen.
SPEAKER_03Yeah, so they are a not-for-profit and and they distribute all their income to the 211 member associations around the world. What they're proposing now is to create a spin-off company which would not be a non-profit, but this would be a commercial entity, and this would hold all the commercial rights of the broadcasting, the sponsorship, the ticketing, and all the kind of uh event organization element of their major tournaments. So you're talking about the World Cups, men and women, you're talking about the Club World Cup, and so yeah, it would it would become a for-profit, this company would become a for-profit entity, and that could obviously, you know, change the way that um that FIFA looks at the way it runs the game.
SPEAKER_01A lot of people saying that they're you know, we've seen reports people are shocked by this development. I have to say, having followed Infantino the past couple of years, there are very few things he could do that would shock me.
SPEAKER_03Yeah, and I think that's absolutely fair, and I think this is probably a case of not so much shock that he would try something like this, but I think it's maybe the straw that broke the camel's back. People have been kind of worn down by, you know, whether it's the hydration breaks, whether it's the sort of um the shadow of Trump over so many decisions, um, whether it's you know, whatever you think about going to Saudi Arabia, whether it's um the Club World Cup, which was something that you know not everybody wanted. Um Infantina's been shown that he's been absolutely ready to ride roughshod over any sort of blowback that he gets, um, because ultimately, if it makes more money, he's got more money to distribute to um all the different FAs around the world, and that's what keeps him in a job. So uh, you know, yeah, to your point, he is he is shown he has remarkably thick skin most of the time when it comes to writing this stuff out. But I do wonder whether this might be a bridge too far.
SPEAKER_01We shall see. We shall see. Thanks very much, Frank, for coming in. Pleasure.
SPEAKER_04Well, that's the final whistle, and that's all we have time for today. Thank you very much for listening to or watching business as usual.
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