Watch Business Live with Ian King: Vet prices investigate over concerns pet owners being overcharged

Summary

The Competition and Markets Authority (CMA) has launched a formal investigation into the UK's veterinary services sector due to concerns that pet owners may be overpaying for medicines and not receiving a good deal. The sector has seen a significant increase in consolidation, with large corporate groups owning around 60% of vet practices, potentially leading to reduced choice and weaker competition. The CMA's investigation will examine access to information, competition within the market, and the regulatory framework, with the aim of potentially mandating transparency in pricing and treatment options for pet owners.

Takeaways

• 🎤 Singer who rose to fame with The Raspberries and had a successful solo career has passed away at 74.
• 🎶 'Hungry Eyes', featured in the film 'Dirty Dancing', is one of the late singer's notable hits.
• 📢 The Competition and Markets Authority (CMA) is launching an investigation into the UK veterinary services sector due to concerns pet owners may be overpaying for medicines and prescriptions.
• 🐾 Public and veterinary professionals responded in large numbers to the CMA's initial review, indicating a broad concern about the sector.
• 🏥 Concerns include lack of access to clear pricing information, reduced choice due to market consolidation, and an outdated regulatory framework.
• 💊 The CMA is worried that pet owners are not offered a full range of treatment options and may be referred to related businesses owned by large corporate groups.
• 🏢 Large veterinary service providers, such as Pets at Home, have responded to the CMA's findings, claiming their business model is not accurately reflected.
• 🛒 The investigation may lead to direct action, including mandating information provision to pet owners and imposing limits on prescription fees.
• 🏠 Aspian, a house builder, reported a 52% decrease in pre-tax profits for 2023 and anticipates a challenging year ahead due to interest rates and market conditions.
• 📈 Domino's Pizza plans to open over 70 new outlets this year, aiming for more than 1,600 stores in the UK and Ireland by the end of 2028.
• 💼 The UK government is moving forward with new gas-fired power plants to improve energy security amidst the potential for blackouts.

Q & A

What was the main concern regarding the UK veterinary services sector raised by the Competition and Markets Authority (CMA)?

The CMA raised concerns about the lack of access to clear, upfront pricing information for pet owners, potential overpayment for medicines or prescriptions, increased market consolidation leading to reduced choice and weaker competition, and an outdated regulatory framework from the 1960s.

How did the public and veterinary professionals respond to the CMA's initial review of the veterinary services sector?

The initial review in September received an unprecedented public response with over 55,000 responses from the public and veterinary professionals, indicating a broad concern about the issues within the sector.

What was the main argument from large corporate veterinary service providers like Pets at Home in response to the CMA's findings?

Pets at Home argued that the CMA's findings did not fully reflect their unique business model of locally owned vet practices,强调 their brand is national but led by individual entrepreneurial vets with clinical and operational freedom.

What potential remedies could the CMA impose at the end of its market investigation into the veterinary services sector?

The CMA could mandate the provision of information to pet owners, require businesses to divest certain businesses or assets, and impose limits on prices for prescription fees.

What is the UK government's stance on gas-fired power plants in relation to energy security?

The UK government is supporting the building of new gas-fired power plants to improve energy security, as it faces a genuine prospect of blackouts without gas as a backup for renewable energy sources.

How did the house building sector perform in 2023 according to Persimmon's results?

Persimmon's pre-tax profits for 2023 were £351.5 million, which was a 52% decrease compared to 2022, and they completed 33% fewer homes. The company anticipates another challenging year in 2024.

What is Domino's Pizza's expansion plan for the UK and Ireland?

Domino's Pizza plans to open more than 70 new outlets in the year as part of a long-term target to have over 1,600 stores across the UK and Ireland by the end of 2028, and over 2,000 by 2033.

How has the earnings growth slowdown raised hopes for the Bank of England?

The slowdown in earnings growth, with average regular earnings excluding bonuses rising at an annual rate of 6.1%, has raised hopes that the Bank of England may soon be able to cut interest rates.

What is the current state of the UK labor market in terms of inactivity rate?

The inactivity rate in the UK is 21.8% for the latest three months, up from 20.5% pre-pandemic, with nearly 3 million individuals on long-term sick and many young people leaving the education system without entering the workforce.

What are the main skills challenges faced by organizations today?

Organizations are facing challenges in finding individuals with transferable skills and in upskilling their current workforce to meet the demands of future skills, especially in sectors like green energy and IT.

How has Genus reported its financial performance for 2023?

Genus reported a pre-tax profit of £48.4 million for 2023, which was a 6.6% increase from 2022, despite a 5.7% decrease in top-line revenue.

What new product launches has Genus introduced to support sustainability in the built environment?

Genus introduced a ventilation system with heat recovery, innovations in underfloor heating for easier retrofitting, and a new line of plumbing products for easier and more secure installation.

Outlines

00:00

🎤 Legacy of a Music Icon: Mr. K's Passing

The first paragraph discusses the death of Mr. K, a famous singer who rose to fame with the pop group The Raspberries and later pursued a successful solo career. His wife announced his passing at the age of 74, emphasizing that his music will be his lasting legacy. The paragraph also transitions into a discussion about pet owners potentially paying too much for medicines and the Competition and Markets Authority's investigation into the UK's veterinary services sector.

05:01

🐾 Veterinary Services Investigation: Market Concerns

This paragraph delves into the Competition and Markets Authority's (CMA) concerns about the lack of competition in the UK's veterinary services sector. The CMA's investigation is prompted by public and professional responses indicating that pet owners may not be getting a good deal. Key concerns include access to clear pricing information, the impact of corporate consolidation on choice and competition, and the outdated regulatory framework. The CMA's CEO, Sarah Cardell, discusses these issues and the potential for direct action following the investigation.

10:02

🏗️ Housing Market Challenges and Domino's Expansion

The third paragraph covers the challenges faced by the UK's housing market, with Asper Simman, a major house builder, reporting a decrease in pre-tax profits and a challenging year ahead due to interest rates and a general election. Despite this, the company plans to build more homes. Additionally, Domino's Pizza announces its intention to open over 70 new outlets this year, aiming for a significant expansion in the UK and Ireland by 2028 and 2033. The paragraph also touches on the slowed earnings growth, which might influence the Bank of England's decision on interest rates.

15:03

💼 Employment Trends and Skills Development

This section focuses on employment trends in the UK, with a discussion on wage growth moderation and the impact of the pandemic on labor hoarding. Petra Tag, operations director at ManpowerGroup UK, shares insights on the decline in wages and the mixed picture in the job market. The conversation highlights the struggle of organizations to find the right talent and the importance of upskilling strategies for future growth, especially in sectors like green energy and IT.

20:05

📉 Market Updates: Stocks, Inactivity Rates, and Oil Prices

The final paragraph provides updates on market trends, including the pound's performance on foreign exchange markets, the slight slip in value following eased wage growth news, and the performance of various stocks. It also addresses the inactivity rate in the labor market, the need to encourage long-term sick individuals and young people leaving the education system to join the workforce, and the impact of these factors on the labor dynamics. The oil price rally is also mentioned, driven by increased Chinese crude imports.

25:06

🏢 Sustainable Construction and Product Innovation

The paragraph discusses the growth and innovation in the sustainable construction sector, focusing on Genut, a company that supplies products for energy-efficient homes and construction. Joe Vor, the CEO of Genut, talks about the company's pre-tax profit increase, product launches aimed at improving home ventilation and underfloor heating, and the use of recycled materials. The conversation also touches on the challenges of inflation, the potential growth in heat pumps with upcoming regulations, and the company's international diversification plans.

30:07

🎶 Closing Remarks and Upcoming Highlights

The script concludes with a brief mention of the program's upcoming segments, including an interview with the CEO of Genut, a sustainable construction products company, and a discussion on the importance of adapting to climate change in the built environment. The paragraph ends with a sign-off from the host, looking forward to the continuation of the program.

Keywords

💡Veterinary Services

Veterinary services refer to the medical care provided to animals by professionals, including diagnosis, treatment, and preventive health care. In the context of the video, the Competition and Markets Authority (CMA) is investigating these services in the UK due to concerns that pet owners may not be getting a good deal, potentially overpaying for medicines or prescriptions and lacking sufficient information to make informed choices.

💡Competition and Markets Authority (CMA)

The Competition and Markets Authority (CMA) is a non-ministerial department of the UK government responsible for ensuring that markets work well for consumers, making sure that businesses do not break the law by forming cartels or abusing their market power. In the video, the CMA is launching a formal investigation into the UK's veterinary services sector to address public and professional concerns about the market's functioning.

💡Pet Owners

Pet owners are individuals who care for and are responsible for pets. In the context of the video, pet owners are the consumers of veterinary services, and their concerns about the cost and choice of these services have prompted the CMA's investigation. The video discusses how pet owners may not have enough information to choose the best veterinary practice or treatment for their pets and may be overpaying for medicines or prescriptions.

💡Market Consolidation

Market consolidation refers to the process by which companies within an industry merge or are acquired, leading to a reduction in the number of competitors and an increase in the market share of the remaining firms. In the video, the CMA is concerned about the high level of consolidation in the veterinary services sector, with large corporate groups owning a significant percentage of vet practices, which may lead to reduced competition and choice for consumers.

💡Pet Insurance

Pet insurance is a type of insurance that covers veterinary costs for pets, often including treatments, surgeries, and diagnostic tests. While not the primary focus of the video, the script mentions pet insurance as an area of interest for many people who believe it contributes to inflated costs within the veterinary sector.

💡Regulatory Framework

A regulatory framework consists of the rules, regulations, and guidelines set by a governing body to oversee and control certain industries or sectors. In the video, the CMA is concerned that the existing regulatory framework for veterinary services, which dates back to the 1960s, may no longer be suitable for the current market conditions and may need to be updated to better serve pet owners and the industry.

💡Corporate Groups

Corporate groups refer to companies that are part of a larger organization or conglomerate, often with shared ownership or management. In the context of the video, the CMA's investigation is partly focused on the role of large corporate groups in the veterinary services sector, which own a significant number of vet practices and may influence the market dynamics, potentially leading to reduced choice and increased costs for pet owners.

💡Transparency

Transparency refers to the quality of being open, honest, and easy to understand, especially in terms of communication and operations. In the video, transparency is a key issue as pet owners may not have access to clear, upfront pricing information about treatment options and prescription fees, which can lead to confusion and potentially overpayment for veterinary services.

💡Earnings Growth

Earnings growth refers to the increase in a company's profits over time. It is a key indicator of a company's financial health and its ability to generate more income in the future. In the video, the slowing of earnings growth raises hopes that the Bank of England may soon be able to cut interest rates, which can impact the economy and businesses.

💡Interest Rates

Interest rates are the percentage of a loan that a borrower must pay to the lender, expressed as an annual rate. They are set by central banks and influence the cost of borrowing for individuals and businesses. In the video, the slowing of earnings growth may indicate that the Bank of England could cut interest rates, which would reduce the cost of borrowing and potentially stimulate economic activity.

💡Gas-Fired Power Plants

Gas-fired power plants are facilities that generate electricity by burning natural gas. These plants are considered a flexible and reliable source of energy, often used as a backup for renewable sources like wind and solar power. In the video, the UK government's decision to build new gas-fired power plants is aimed at improving energy security and preventing blackouts.

Highlights

Singer of 'Hungry Eyes' and 'All by Myself' has passed away at 74.

The death was announced by Mr. K's wife, emphasizing his music as his lasting legacy.

The singer gained fame with the pop group The Raspberries before starting a solo career.

His song 'Hungry Eyes' was featured in the film 'Dirty Dancing' with Patrick Swayze.

The Competition and Markets Authority (CMA) is investigating the UK's veterinary services sector for potential overcharging of pet owners.

Pet owners might be overpaying for medicines or prescriptions, according to the CMA.

Large corporate groups own about 60% of vet practices, a significant increase from 10% a decade ago.

The CMA's investigation will focus on access to information, competition within the market, and the regulatory framework.

Pets at Home responded to the CMA's findings, stating their business model is not fully reflected in the report.

The CMA is concerned that large corporate groups may be reducing choice and competition in the veterinary sector.

The British Veterinary Association is taking steps to improve transparency in the sector.

The UK government is allowing the construction of new gas-fired power plants for energy security.

Domino's Pizza plans to open over 70 new outlets this year, aiming for 1,600 stores in the UK and Ireland by 2028.

Earnings growth has slowed, which may influence the Bank of England to cut interest rates.

The unemployment rate rose to 3.9% from 3.8% in the last quarter of 2023.

The construction and building sectors faced challenges, but companies like Genuit are focusing on sustainable products for future growth.

Genuit reported a pre-tax profit of 48.4 million for 2023, a 6.6% increase from 2022.

The company is investing in new products like heat recovery ventilation systems and innovative underfloor heating installations.

Genuit is aiming to increase the recycled content in their products from 50% to 62% in the coming years.

The company is also focusing on expanding its international presence, potentially reaching 20-30% of sales outside the UK in the next 5 years.

Transcripts

his hits hungry eyes and all by myself

has died at the age of

74 hry

eyes Mr K's wife announced his death

saying his music will be his lasting

Legacy the singer Rose to fame with the

pop group The Raspberries before

establishing a solo career the song

Hungry Eyes featured in the film Dirty

Dancing of course with Patrick S

all right plenty more to come coming up

next business live with Ian King Ian's

going to be speaking to the competition

Watch Dog about why pet owners could be

paying too much for medicines and

[Music]

prescriptions

[Music]

the top business stories live from the

Sky News City

Studio competition and markets Authority

says pet owners could be paying too much

for medicines or prescriptions I'll be

speaking with its chief executive

earnings growth slows raising hopes that

the bank of England May soon be able to

cut interest

rates plus the government to give the

green lights for new gasified power

plants to improve energy

[Music]

security good morning this is business

KN with me in King the competition and

markets Authority is to launch a formal

investigation into the UK's veter

Services sector after a review

highlighted concerns that pet owners are

not getting a good deal well the

competition regulator which began the

review last September said to say it had

received an unprecedented response from

the public and Veterinary professionals

suggesting it was right to look into the

issue among the cma's concerns are that

consumers may not have enough

information enabeling them to choose the

best veterinary practice or the right

treatment for their needs and that pet

owners might be overpaying for medicines

or prescriptions well in response to the

CMA statement some of the biggest

providers of Veterinary Services have

issued their responses including pets at

home which told us we are incredibly

disappointed the cma's findings today do

not fully reflect our unique business

model of locally owned vet practices

whilst our brand is National Veterinary

practices are led by individual

entrepreneurial vets who have clinical

and operational Freedom we're joining me

now is Sarah Cardell she's chief

executive at the CMA Sarah a very good

morning uh to you what makes you think

there is a lack of competition in the

sector so in the UK there are around 16

million pet owners and this is a market

that really really matters that's been

reflected in the unprecedented public

response we've had since we launched our

initial review back in September last

year we had over 55,000 responses to

that initial review now we have heard

from professionals within the sector

about some of the pressures that they're

under but we've also identified three

broad areas of concern that we believe

require full and formal investigation at

this stage first is around access to

information it's really difficult for

many pet owners to get access to clear

upfront pricing information about

treatment options about prescription ion

fees we're concerned that many pet

owners may be overpaying for medicines

but second we're also concerned about

how competition is actually working in

this market we've seen a huge growth in

consolidation in the sector over the

last few years 10 years ago around 10%

of vet practices were owned by large

corporate groups that figure is now

about 60% and we're also concerned that

some of the incentives these large

corporate groups may have could be

driving reduced choice and weaker

competition finally we're concerned

about the regulatory framework itself

that dates back to the 19 60s and it may

simply no longer be fit for purpose so

given the breadth of those concerns we

are now proposing to take forward a

formal Market investigation we believe

that's the best way to enable us to take

direct action if our concerns are upheld

you mentioned the big corporates I mean

what about this argument that people

like pets at home are putting forward

that essentially they are local

operators and in many cases they're

bringing competition to local

markets so we've seen a wide range of

concerns and if you think about access

to information making prices transparent

and up front we've seen that 80% of the

vet practices we looked at don't even

publish basic price lists on their

websites uh for individual pet owners

when they're looking at treatment

options we're concerned that a lot of

these large corporates have invested in

sophisticated treatment options now that

brings many benefits but it does mean

that potentially pet owners are not

being offered a full range of choice

they're not giving access to some of the

simpler lower cost options that may

better suit their needs and we're also

concerned that a number of these large

corporate groups also own related

services so things like out of hours

centers specialist treatment centers pep

crematoria and they maybe referring

business to those uh related businesses

which again could be reducing choice for

pet owners you mentioned the

transparency issue there the British

Veterinary Association has told us today

they're already taking steps to improve

transparency in the

sector so we would encourage uh

practices to take those steps there's no

reason for example why practices can't

put basic pricing information on their

website we've heard a whole host of

concerns about different issues about

getting access to prices so we think

this needs a really full review to get a

full sense of the extent of the concerns

and potentially at the end of market

investigation for example enabling us to

mandate the terms on which individual

vet practices and those large corporate

groups have to provide a whole set of

information to pet owners is your

investigation going to take in pet

insurance which a lot of people seem to

blame for inflating costs in the sector

so our focus at the moment is on the vet

sector itself the provision of care to

pet owners and their animals uh of

course the pet insurance sector is

relevant there but our focus at the

moment is principally on the vet

industry

itself is it too early to be talking

about potential

remedies so the reason that we are today

Consulting on taking forward a market

investigation is it gives us the legal

powers to do two things firstly we can

require companies to provide a full set

of information to us for example about

their business model their business

practice their financials but critically

it also gives us the power at the end of

that market investigation to impose

direct remedies now it's too early to

say exactly what those could be but to

give an idea we could mandate uh

information required to be provided to

pet owners we can require uh businesses

to divest certain businesses or certain

assets if that's necessary and we could

impose limits on prices for example

around prescription fees so there's a

whole range of different remedies that

we could impose at the end of this

Market investigation okay Sarah we're

out of time I'm afraid good to talk to

you this morning thank you thank you

very much some other business news

stories for you now in the UK government

said today it will give the go ahead to

the building of new gas fired power

plants to improve energy security it

said that the UK faces a genuine

Prospect of blackouts without gas as a

backup for renewable energy sources the

department for energy Security in Net

Zero is also proposing a location-based

method to determine how much consumers

should be charged for the electricity

they use with those living close to

power generators likely to pay

less P simman said today it will build

more homes this year than it did in 2023

but warned it is expecting another

challenging year the UK's fourth largest

house Builder by stock market value said

greater competition in the mortgage

market and wage growth have contributed

to improved affordability

but added that with interest rates

expected to remain at current levels and

a general election on the horizon market

conditions were expected to remain

subdued throughout

2024 pre-tax profits for 2023 came in at

351.5 million that was down 52% on 2022

asper simman completed 3

33% fewer homes the shares are currently

off by more than

3% and Domino's Pizza said today it

expects to open more than 70 new Outlets

this year as part of an eventual Target

of having more than 1,600 stores across

the UK and Ireland by the end of 2028

and more than 2,000 by 2033 the company

was reporting an underlying pre-tax

profit of 99 million for the uh 2023 was

to the year till Christmas Eve that was

up 200,000 on the uh previous 12 months

Domino's also announced it's paying £62

million to take full control of Shaw Cal

that's the largest Domino's franchise

business operating in the Republic of

Ireland and Northern

Ireland now earnings growth slowed

during the 3 months to January raising

hopes that the bank of England May soon

be able to cut interest rates the office

for National statistics said average

regular earnings excluding bonuses Rose

at an annual rate of 6.1% During the

period that was down from 6.2% during

the final 3 months of 2023 meanwhile

average regular earnings including

bonuses Rose by 5.6% year on-ear that

was down from 5.8% during the final

three months of last year and was the

slowest rate of growth since October

2022 the on also said the unemployment

rate during the period Rose to 3.9% from

3.8% in the final three months of 2023

well joining me now is Petra tag

operations director at mire UK which has

just published its own latest quarterly

employment outlook for the UK Petra very

good morning to you does this moderation

and wages growth tally with what you're

seeing yes it does I mean what we're

seeing from a manow group perspective is

we are seeing that gradual Decline and

slow down in wages we we are seeing less

of the golden handshakes the big sign on

bonuses U obviously that's complemented

with the this you know the gradual

reduction in the recession rates which

we're we're expecting to forecast at

around 2% so just start to seem to be

starting to level off so would you

expect this moderation in earnings

growth to continue I do indeed I think

uh as we as we talk more about the

market and what we're seeing in the

latest trends I think you know the the

reality now is that wages will start to

slow down we've got some positive

increases in minimum wage coming through

in April that will help offset some of

those challenges as well it's very mixed

picture coming out of the jobs Market

just now I mean Recruitment and

employment Confederation told us this

time yesterday they're seeing fairly

weak conditions the PMI survey data

suggests it's it's not quite so bad

where do you see it right now yeah and

indeed I was listening to that interview

yesterday from our own data we see that

the hiring intentions are actually quite

positive when we look at our mow Group

employment survey we measure that on a

on a percentage basis which is actually

showing Plus 23% if we look at where

that was preco it was about 10% so even

though it's slowed down since Co it's

still showing I would say cautiously

optimistic uh hiring expectations are

those hiring expectations pictures

skewed At All by the fact that certain

sectors are doing very well and others

maybe less so yeah so we know that

sectors are seeing different challenges

some sectors are particularly seeing

seasonal demand but what we do see is

that eight in 10 organizations are

struggling to find the right Talent so

even if sectors are booming their

challenge remains to find that talent to

bring into their own organizations we

heard a lot during the pandemic about

Labor hoarding um that is that is that

still a factor I think organizations are

playing different tactics so some are

retaining their Workforce and looking at

how they can you know strengthen their

Workforce some organizations are also

hiring for growth so we know that small

to medium-size organizations about 39%

of those are actually looking to invest

in future skills and talent you know to

in order to grow their organizations

whereas some of the larger ones are

slowing down a little bit and focusing

on backfilling some of their outstanding

vacancies do you measure uh on the job

skills training at all is that something

that you look at we certainly are

focused on on on you know skills and and

nurturing skills we we we look at skills

in two way in terms of finding the

people with the transferable skills and

also focusing on upskilling those

individuals organizations today are

looking for skills for the future but we

don't necessarily know what those skills

look like in many sectors such as the

green sector the it sector we need

people with different levels of skills

that don't necessarily exist today so

it's really important that organiz

organizations recognize that and focus

on on on those upskilling strategies now

another Hot Topic certainly among the

politicians just now is inactivity I

mean the inactivity rate uh is 21.8% for

the latest three months I mean that's up

from 20 and a half% pre pandemic why has

this become such an issue well it's

really driving uh Dynamics in the labor

market and if you look at some of those

numbers nearly 3 million of those

individuals are on long-term sick so we

have to look at how we can encourage

those back into the workforce what's

also quite alarming is many of that

inactive population our 16 to 24 year

olds leaving the education system and

not necessarily finding their way in the

world of work so we really need to look

at how we can take them on that journey

into the world of work because arguably

there are enough vacancies if you look

at the vacancies in the latest ons data

900,000 vacancies looking at that in

comparison to the inactive U individuals

you would argue that there is enough you

know work out there but we have to close

that mismatch of talent that Gap in the

market okay Petra I have to leave it

there I'm afraid good to see you this

morning thank

you well the pound slightly slipped on

the foreign exchange markets following

news of that easing in wages growth uh

Sterling currently off a sixth of 1%

right now against the US dollar

currently off a quarter of 1% against

the Euro single currency more or less

unchanged against the Green P on the

equity markets well last night's falls

on Wall Street were followed by a mix

session for stocks night in the Asia

Pacific region the Highlight is in the

top right hand corner of the screen

there the Hong Kong hangang which rose

by more than 3% to hit a three-month

High meanwhile in Europe stocks this

morning are largely uh positive just now

all the main Continental Europeans up on

some largely positive earnings reports

talking points this morning include

Leonardo the Italian defense contractor

is up 4 and a half% in Milan that's on

the news that it plans to invest more in

AI well here in London the foot 100 is

also in positive territory in fact that

is uh close to a 3-we high right now up

by nearly 1 and a qu% just now a broad

base rally has been led by Hong Kong

geared stocks including the likes of

credential Standard Chartered and

HSBC terms of the fallers well the

leading Blue Chip Faller this morning is

Pimon the house Builder mentioned them a

little earlier currently off uh by 3 and

a half% Barrett developments is off by

nearly 1% in sympathy there outside the

footy 100 the interdealer broker TP IAP

is currently head by 11 and a qu% that's

on its results and Confirmation it may

spay spin off its data unit to the

downside two stocks have mentioned

earlier in the program pets at home off

2% CVS group is off by 21% that is on

the CMA investigation into the

veterinary sector another midcap Faller

to mention is Morgan Advanced Materials

that one's off 1% after fully operating

profits declined by nearly 177% the oil

price has rallied this morning that's on

news of that Chinese crude imports

during the first two weeks uh two months

of the year were up batt of Brent crude

will currently cost you $82 40 cents

about that's up a little over a quarter

of 1% on the session while joining me

this morning is Su Noka head of UK

equities at schroers Sue good to see you

this morning lots of uh results to to

digest what's caught your arm in

Domino's I thought the results were okay

but the shares are off 7% do dominoes

are are really good for for the year and

gave a lot of clarity on the future

strategy a lot of growth coming there

they've paused some of their investment

in promotions at the end of last year

and the first quarter of this year so

like for like growth really moderated

from kind of mid single digits down to

less than half a percent in in the final

three months of 2023 and and that's

caused people a little bit of concern

but what they they've talked about is a

fantastic store store rollout program uh

a consolidation of a franchisee in

Ireland which underpins growth and quite

a lot of promotional activity to to come

later in this year so have to be patient

okay now the biggest company reporting

today is of course Pimon the shares are

off slightly I mean it was a fairly

Steady As She Goes sort of statement

yeah the the housing market has been

tough for house builders in 2023 and

there was confirmation of that piman had

updated the the market earlier in

January with a trading statement and I

don't think the results today really

gave much new news so we're we're still

on pause it's all about interest rates

later in this year now another one that

uh has caught your eyes Hillen Smith yes

that that's a fantastic midsized company

that's doing really well in the United

States it's underpinned by the

expenditure of the the US Ira the infl

infation reduction act which is giving

quite a lot of infrastructure that they

plug into whether it's electrification

or whether that that's roads um so it's

confirmed that growth is really strong

in the United States and pretty

resilient in the UK those are the big

markets now more broadly this has been

quite an exciting period for uh your

space UK equities a lot of m&a activity

even in the last week win hon DS Smith

virgin money where do you see it going

from here it's been pretty much a bid a

day um in in the last fortnite not all

of them will be consummated and we saw

um pullback by Eliot for for curries

that leaves another player Chinese firm

jd.com but I think the the valuation is

is really super attractive so we're

seeing ins sector

consolidation um from existing players

in the UK market and a lot of activity

from corporate buyers who can take out

Synergy cost savings I mean the

valuations as you say are cheap uh

Sterling's been on a bit of a rle lately

I mean it's touching seven-month highs

against the dollar would that

potentially deter some us

biders I don't think so because the

absolute value of sterling is still

pretty compelling um we're we're still

at lows post um brexit uh and post the

the truss nomics um of September 22 so

yes we we've come off some of those lows

but we're still down a long way

for from the 140s where we were probably

about 18 months ago all right so good to

see us we could leave it there I'm

afraid thanks for joining me this

morning still to come here on business

live I'll be joined by the chief

executive of genuit the sustainable

Construction Products company as it

reports a rise in pre-tax profit stay

with

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I'm Stuart Ramsey and I'm Sky's Chief

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emirats premium

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this SL Emirates SL

better welcome back now if you look

looking for a business seeking to reduce

the impacts Britain's homes and built

environment have on climate change you'd

be hard pressed to improve on genu the

company which older viewers May better

remember as poly pipe supplies the UK

and European building and construction

Market with pipes guttering underfloor

heating systems air source heat pumps

and ventilation Management Systems today

it reported a pre-tax profit of 48.4

million for 2023 that was up 6.6% on

2022 and with me I'm pleased to say is

Joe VOR the chief executive of genu Joe

good to see you thanks for having me

it's been a challenging year for the

Construction and building sectors I mean

your top line was down but you still

managed to grow earnings MH yeah Top

Line was down 5.7% in an industry that

by all accounts that's probably a very

good result different end sectors I mean

we do face into new house building it's

only about 30% of our business about 30%

is RMI which of course is really more

about consumer confidence and

willingness to do those home projects

yeah absolutely and then commercial

infrastructure plus we do have a growing

International business as well so that

diversity it's definitely helped us on

the top line uh to outperform the market

and the bottom line we've really been

focused on simplifying the business

building a platform for growth and

investing in the future because there's

really the midterm sort of growth

Outlook is fantastic in the sector yeah

you make the point in the statement you

you've done a lot of new product

launches during the year what what sort

of things sure a couple of really great

examples I'd love to share are uh we did

a system it's really a ventilation

system that helps improve the

ventilation in your house but actually

get heat recovery so that in the winter

you can get fresh air without losing all

the heat from your efficient system

underfloor heating we've actually

innovated in the way that we can install

underfloor heating to make it easier to

go into retrofit and renovation projects

uh We've also even in the plumbing

business a new line of products which

makes it easier faster and more secure

to install with our poly Plum enhance so

these are the types of things that you

need to do in order to really meet

customers demands as they're trying to

struggle with essentially the green

environment and all the changes that we

need to do to really improve the carbon

footprint of the built industry which

about 40% of the UK's carbon footprint

and to essentially help us adapt to

climate change now inflation has

obviously been a big topic over the last

12 months apart from people you your

main cost I think is PVC am I right

materials yeah Plastics in general would

be about 50% of our sponga now about

half of that by the way is recycled we

actually lead Europe in terms of uh

companies like us in terms of our

recycled content clearly good for the

environment but it does provide a bit of

a hedge on on Plastics and we've

committed to increasing that from 50% to

62% over the next few years too and is

that does that add a cost to the

business or is rle recycled material

cheaper uh typically it's cheaper it's

also a bit more stable because really

it's a it's a it's a labor cost as

opposed to a raw material cost so we

find that it is a better part of our

portfolio and general to do that now you

in a business called new heat which is

obviously a leading player in heat pumps

are you concerned about the sluggish

take up in this

country I see it as an opportunity right

if you think about it across the UK

across Europe we're actually in in last

place on the league table here in the UK

uh a few percent uh where's the scandix

are actually quite a bit ahead of us uh

near 70 80% take up in some cases so

that's a tremendous opportunity as we

face up to the Future home standard

which is coming into effect in 2025 it's

going to essentially be driving a large

portion of new house building toward

heat pumps in to heat pumps comes

underfloor Heating and that heat

recovery ventilation we were talking

about earlier these are all really

really good Solutions and we we expect

to see very low uptake increase to a

sizable part of the market which allows

us to grow no matter what happens to the

housing market plus of course we're

about 20% down on the broader

construction end markets we face that

recovery will help us and then long term

continuing to grow and innovate into

varying areas of more efficient houses

better storm water management blue green

roof there's really a lot to play for

longer term you mentioned Water

Management there operating margins in

that part of the business are much lower

than in the other two divisions why is

that uh so they started from a lower

Point higher material content right and

uh certainly during the downturn we saw

a bit of price pressure on the materials

there what we've been able to do is

focus on improving that business though

and actually as you might have noted

that that division actually increased

substantially about 200 basis points up

this year alone we've committed to a

long-term Target gain to 15 % plus so we

still think it's there's a lot we can do

structur to improve that business and

very briefly Joe you're trying to

diversify away from the UK which is

currently 90% of sales where will that

be in five years time it's a good

question just to clarify one thing we

like being in the UK Market especially

coming from the base we're at now but

definitely uh we've said that you

wouldn't be surprised to see the

business at 20 or 30% or more

International in you know 5 years plus

both organically plus perhaps with some

more great Acquisitions like we've done

in the past and that'll be mainly

Mainland Europe that you diversify into

it's the closest market right but

there's some structural similarities to

parts of North America as well but uh

that's probably our main focus all right

Joe good to see you this morning thanks

very much indeed for coming on I know

it's a busy day for you oh thanks for

having us appreciate it thank thank you

that's it from me I am back at hotos 4

with our afternoon magici hope very much

to see you then in the meantime do stay

tuned coming up after this short break

it's Cal Melbourne back with you thanks

for joining me this morning see you

later

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