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Arcadia, Rolls-Royce and Paperchase Produce This Morning's Numbers

Posted on Jan 27, 2021. by NTI

How can so much happen overnight? Tracee turned off her bedside light and switched on the whale-breeding meditation soundtrack last night having scoured various news-feeds and sources for stories. Nothing. All done. Good. Nothing to report .

However, it appears it has been a busy night down Catastrophe Road, as this morning two of our favourite contributors to NTI news bulletins have numbers for us that make tired eyes blink in fascinated wonder. 

The first is Rolls-Royce who have absolutely no idea how to do things by halves. The papers today have the aero-engines company burning through another £2 billion of cash during the course of 2021. It’s not as if it is their own money, either. The engineering giant went through a £5 billion rescue re-financing last year, teetering towards and back from the precipice as it flirted with the business headlines, telling us all, at various times, that it warmed its hands before a £4.2 billion cash bonfire in 2020. 

Rolls are ardent fans of the NTI newsroom bulletins, and have spotted that the aircraft and airlines industries are still in a spot of bother at the beginning of this year and have managed its investors’ expectations by sending them all a text of that emoji with its mouth open and hands beside its face in horror. More than £4 billion of Rolls’ annual income is tied to payments from airlines for service and maintenance and is dependent on engine flying hours. So, let’s just make an adjustment to that accounting line then. Okay, £26.15. 

There is also news from Deloitte this morning. It appears that the creditor position in Arcadia is a tad worse than was previously expected. The total debt owed is in the region of £750 million, with Top Shop heading the field, owing in the region of £550 million of that. As a minor detail, this figure is thought to exclude unsecured debt to the company’s retirement fund and liabilities to HM Revenue & Customs. So, that will be a little more then. 

It is reported to be unclear whether Arcadia’s large liabilities will affect the 9,000 members of its pension scheme. It had a deficit of £138 million in 2018, but experts said it could cost as much as £350 million to offload the liabilities to an insurer. Oh, blimey, Sir Philip, you’ve only gone and ‘done a BHS again’! 

Deloitte are doing a decent job at Arcadia and we are thinking of sending them a ‘well done’ card. A good place to go to buy that may be Paperchase, who are no strangers to the CVA, having tried one of those back in 2019 and appear to be on the verge of a pre-pack this time around. The beneficiaries of this will be Permira Debt Management, who have previous with the card and pointless gifts company, having provided funding to the business since 2015. 

The good news is that around 90 of Paperchase’s 125 stores should be saved in the deal, with 1,000 jobs being protected. A word here to Kevin Hollinrake, Tory MP and derider of Insolvency Practitioners and our fine work.

”This is a GREAT DEAL, Kev. PwC have pulled out all the stops here and a pre-pack is perfect for such a situation. So, bog off back to Thirsk and Malton and see to yourself.”

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