BT
In all likelihood, BT will be under new ownership, or at the least involved in a takeover battle, in June next year. The billionaire Patrick Drahi has been assiduously building his stake in the British telecoms giant, having spent more than £3bn to acquire 18% to date, making him BT’s biggest shareholder.
After his latest purchase in December, Drahi is now barred under UK rules from mounting a full takeover bid until 15 June, although he can continue to strengthen his grip by snapping up more stock.
Drahi, an activist investor known for deep cost-cutting at businesses he controls, will also use his time to allay political concerns about a potential foreign takeover of BT, a company considered critical to the national broadband and mobile infrastructure. The government has already fired a warning shot, saying that it will “not hesitate to act” to protect BT, and in January ministers will gain tougher powers to block takeovers of sensitive national assets under the new National Security and Investment Act 2021.
Nevertheless, BT’s days of independence look numbered. Deutsche Telekom, the second-biggest shareholder in BT, with a 12.06% stake, has said it is “entertaining all options” regarding the British company’s future. It is considered a “kingmaker” in any play for BT: if Drahi were to buy its stake, he would hit the 30% threshold at which a takeover offer must be tabled.
Mark Sweney
ITM Power
This year could offer a breakthrough for one of the UK’s leading green hydrogen companies as it moves to capitalise on a boom in demand for the clean-burning gas, with plans to expand internationally.
ITM Power, a little-known Aim-listed company, has emerged as one to watch in the UK’s burgeoning green hydrogen industry. At its factory in Sheffield, it manufactures the electrolysers that turn renewable energy and water into a climate-friendly alternative to fossil gas.
The company, which in recent months won the chance to provide a 100-megawatt electrolyser for Shell’s Rhineland refinery in Germany, plans to open a second electrolyser plant in Sheffield and has confirmed that its first overseas plant will follow before 2024.
The demand for green hydrogen is expected to boom over the coming decades as major economies begin to pursue climate targets in earnest. Green hydrogen can replace fossil gas in power plants, factories and even heavy-duty trucks and ships, and unlike the rival “blue hydrogen” it is not derived from fossil fuels and its production does not cause carbon emissions.
ITM Power will fuel its growth with the £250m it successfully raised last month. Its end-of-year trading update shows its backlog of orders for electrolysers has climbed by more than 60% since September to the equivalent of 499 megawatts, while its pipeline of tenders stands at just over 900MW.
Jillian Ambrose
Revolut
The banking and payments app, once known for its popularity among “finance bros”, is finally making headlines for more than just controversial working conditions and its founder’s alleged connections to the Kremlin.
Over the past year, Revolut has solidified its presence overseas – with its services now available in more than 35 countries – applied for US and UK banking licences, and become one of the UK’s most valuable fintech startups, worth about £24bn after funding from major global investors including Japan’s Softbank.
That is indicative of the company’s insatiable appetite for growth, with its founder – Russian-born former Lehman Brothers trader Nik Storonsky – declaring that he intends to make it the largest bank in Britain.
Since launching in the UK six years ago, Revolut has gone from offering a pre-paid card focused on currency exchange to a multi-service app offering business accounts, children’s cashcards, investments, wage advances and cryptocurrency trading. It has also been stacking its boardroom with people from Goldman Sachs and HSBC, and appointed ex-Standard Life Aberdeen boss Martin Gilbert as its chair. The move helped to restore and solidify its reputation, after it faced bad press in 2019 for allegedly overworking staff.
Storonsky has admitted the company has made some mistakes but is setting his sights higher. If 2021 is any indication, Revolut will continue to hit milestones in 2022, assuming it does not spread itself too thin.
Kalyeena Makortoff
Vertical Aerospace
The Bristol-based flying taxi pioneer listed on the New York Stock Exchange just before Christmas via a Spac (special purpose acquisition company), apparently confirming its entry into the big league.
However, investors are currently debating whether flying taxis – or electric vertical takeoff and landing aircraft (eVTOLs), as they like to be formally known – will prove to be Teslas or tulips. Shares leapt and then slipped quickly back 30% in the first week – labouring for takeoff, much like the embryonic eVTOLs so far seen in public.
That said, Vertical Aerospace boasts a provisional £5.5bn order book from the likes of American Airlines and Virgin, and partners including Rolls-Royce, Microsoft and Honeywell. It also aims to climb above the competition by keeping a pilot on board its vehicles, which could speed up regulatory approval. Ultimately, it claims, its VX4 aircraft will be able to fly four passengers at 200mph for costs that are “comparable to a taxi”.
Just don’t mention helicopters … (eVTOLs, it is promised, will be incomparably safer, quieter and greener).
Gwyn Topham
Arrival
Following a similar path to Vertical, Arrival listed in New York in March via a Spac merger. The company, which plans to make electric vans, taxis and buses, saw its market value soar as high as $13bn (£9.7bn) after it listed, amid electric-vehicle market mania, but it is now back at $5.1bn as investors await its first revenues. This year will bring the first true test of its abilities.
Based in the UK, with its first factory near Bicester, Oxfordshire, Arrival claims its vehicles are already as cheap as fossil fuel equivalents, and cost much less to run. Bus tests started in December, and production begins in the spring. Van production will start in the summer, followed by cars designed in partnership with Uber in 2023.
Yet perhaps the most eyecatching aspect of Arrival’s ascent is something that buyers will probably never see: founder Denis Sverdlov, a Russian telecoms billionaire, has set out to upend the logic of high-volume automotive manufacturing. Instead of the long assembly lines pioneered by Henry Ford, Arrival uses robots to build vehicles in a single small “cell”. That could mean lower set-up costs – and a whole new model of putting factories next to their biggest markets.
Jasper Jolly
Marks & Spencer
The high street stalwart seems to have had more turnaround plans during its 137-year history than it has sold hot ready-meal dinners, but its latest, post-pandemic revamp appeared to finally bear fruit last year.
M&S now needs to capitalise on the improvement in fortunes of its once-struggling clothing and homeware division. The retailer dared to dream these sales had turned a corner over the past year; in 2022 it will need to prove to investors that this recovery isn’t temporary.
While the chain is clinging to its position as the UK’s largest clothing retailer, analysts are asking whether recent fashion acquisitions including heritage name Jaeger, and a stake in sustainable brand Nobody’s Child, can keep pushing apparel sales upwards.
A tie-up with delivery firm Ocado got off to a good start, and food sales look encouraging. The question now is whether M&S will increase its stake in the joint venture.
The shares are still languishing at around a third below their value when chief executive Steve Rowe took over in 2016. There is speculation he will step down in the next 18 months, and he will surely want to leave on a high. Despite a couple of profit upgrades, M&S still has some way to go before it can reclaim the place in the FTSE 100 it lost in 2019.
Joanna Partridge
Scancell
This spinout from the University of Nottingham, founded in 1997 by Lindy Durrant, professor of cancer immunotherapy at the university, specialises in developing cancer vaccines and has started testing them on humans. But when the pandemic struck, the company decided to modify its vaccine technology to develop Covid shots, in collaboration with Nottingham’s two universities and backed by £2m funding from the UK’s innovation agency.
The vaccines aim to induce high T-cell immune responses in the body to identify and kill infected cells, as well as generating virus-neutralising antibodies. Scientists say a strong T-cell response would offer longer-lasting immunity, because the protection from antibodies wanes more quickly, as the current Covid jabs show.
As many people are afraid of needles, Scancell decided its vaccines would be administered via spring-powered injectors that use a narrow stream of fluid to pierce the skin. The first trials with 40 healthy volunteers started in South Africa in October, and a further trial is planned in the UK, and data from the studies is expected by June.
The company’s two main shareholders are the US health investor Redmile and the Singaporean Vulpes Life Science Fund, while Durrant and other management own 1.8% of the company. Its shares have rocketed in the past two years, from nearly 7p in early January 2020 to over 20p, but remain far below their closing high of nearly 57p, reached in October 2012.
Julia Kollewe
Read More: From flying taxis to painless vaccines: seven businesses to watch this year
