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  • 📈 Nationwide’s £2.3bn Surprise: Virgin Pays Off

📈 Nationwide’s £2.3bn Surprise: Virgin Pays Off

Vertical’s £40M Boost Fuels Zero-Emission Future

November 27, 2024

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This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes

In today’s stories:

  • Nationwide’s £2.3bn Surprise: Virgin Pays Off

  • Vertical’s £40M Boost Fuels Zero-Emission Future

  • Another UK Stock Exit: Just Eat Bows Out

The summary: Nationwide’s bold Virgin Money takeover cements its powerhouse status in mortgages and banking, proving there’s room for big wins even as profits wobble and interest rates tumble.

The details:

  • Nationwide's Sweet Deal: Snagging Virgin Money for £2.9bn has paid off handsomely, with a surprise £2.3bn gain—far exceeding the £1.5bn forecast. A tidy profit from Branson's bank, if you ask us.

  • Profits Plummet: Pre-tax profits nosedived 43% to £568m as tumbling interest rates squeezed margins. Still, the lender kept its members happy with £950m in savings perks and other goodies.

  • Bolstering the Arsenal: With Virgin under its belt, Nationwide now reigns as Britain’s second-largest player in mortgages and deposits, armed with £370bn in assets and a stronger hand in business banking and credit cards.

  • Virgin Under the Microscope: Nationwide will keep Virgin as a subsidiary for 18 months, poring over its books before a full merger—likely streamlining jobs and operations in the process.

Why it matters: Nationwide’s Virgin Money coup shows that even in a tough economy, savvy deals can trump shrinking profits. By snapping up a rival, it’s not just padding its assets but also muscling into a stronger position in mortgages and business banking. For customers, it’s a reminder that while banks battle for dominance, the spoils could mean better deals—if they play their cards right.

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The summary: Vertical Aerospace is propelling Britain to the forefront of sustainable aviation with fresh funding, pioneering zero-emission eVTOL tech, and a bold vision to transform the skies by 2030.

The details:

  • Flying High with Fresh Funding: Vertical Aerospace has landed a £40M boost from Mudrick Capital, part of a broader $180M deal, shoring up its finances and accelerating its zero-emission VX4 eVTOL aircraft's path to market.

  • Debt Grounded, Equity Takes Off: With $130M of convertible debt now turned into equity at $2.75 per share, the company’s balance sheet is soaring—future investors can bank on newfound certainty.

  • Milestones Galore: Untethered piloted flight tests? Check. Phase 3 testing with wingborne flights? On the horizon. With 1,500 pre-orders from global airlines, Vertical’s VX4 is all systems go.

  • Britain at the Helm: Based in Bristol, Vertical Aerospace is not just about zero-emissions aviation—it’s about putting the UK firmly on the map as the leader in the next century of flight.

Why it matters: Vertical Aerospace is proving that Britain’s got the chops to lead the charge in decarbonising one of the trickiest industries: aviation. With fresh funding, groundbreaking tech, and serious airline interest, they’re not just flying—they’re soaring toward a cleaner, quieter future. If anyone doubted the UK’s aerospace pedigree, consider this a high-flying reminder.

The summary: Just Eat's departure from the London Stock Exchange is the latest in a string of signs that the UK’s financial allure is waning, with more companies eyeing Wall Street than the City.

The details:

  • Just Eat Takeaway is ditching the London Stock Exchange to cut costs, citing regulatory burdens and low trading volumes.

  • The company will focus on its Amsterdam listing, with its final London trade date set for 24 December, just before Christmas.

  • This move follows the sale of Grubhub at a loss, a reminder of the struggles after the pandemic's food delivery boom.

  • The UK's financial reputation takes another hit, with more companies like Klarna choosing US listings over London.

Why it matters: With Just Eat waving goodbye to the London Stock Exchange, it’s a reminder that the UK’s financial clout is looking a bit wobbly these days. Investors might start wondering if the City is still the place to be, especially when companies like Klarna are opting for Wall Street over London. In the grand scheme of things, it’s yet another sign that the UK’s stock market is losing its sparkle, and that’s something the Treasury may want to address before it becomes a trend.