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An activist tried to take on Pfizer. Then things got messy

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This is an audio transcript of the Behind the Money podcast episode: ‘An activist tried to take on Pfizer. Then things got messy’

Michela Tindera
Hey there. It’s me, Michela. Before this week’s episode, I want to inform you of an upcoming event that I think you’ll want to know about. This December 3rd and 4th, the FT is hosting its Global Banking Summit in London. And if you attend, you’ll join the CEOs of Deutsche Bank, Barclays, Wells Fargo and more to explore the top global issues dominating banking today. Oh, and I’ll be there too. I’m hosting a live Behind the Money podcast on the 3rd. To find out more about the summit and claim a discount code, check out our show notes and see you there.

It’s Sunday, October 6th. Pharmaceutical business Pfizer is about to host a board off-site in Ireland. And the company’s CEO, Albert Bourla, is getting ready for it. While he’s doing that, he opens his email. Inside of his inbox, he sees a message that’s a bit out of the blue. (Email alert bleeps) It’s from Pfizer’s former chief financial officer Frank D’Amelio, and the email is a bit weird: it’s completely blank. And he looks at the To line of the email, which contains something very unexpected. The blank email was also sent to someone from Starboard Value, a major activist investor.

Oliver Barnes
I mean, if you want corporate drama where, like, life itself is stranger than fiction, this feels like it.

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Michela Tindera
That’s the FT’s US pharmaceutical correspondent Oliver Barnes. And he says that Bourla receiving this seemingly fat-fingered email is only the beginning.

Oliver Barnes
What follows is, as one Wall Street dealmaker told me, the worst first week in an activist campaign in the history of Wall Street.

[MUSIC PLAYING]

Michela Tindera
I’m Michela Tindera from the Financial Times. Today on Behind the Money, we’re taking you inside a very chaotic activist investor campaign and looking at what it could mean for one of the world’s biggest pharmaceutical companies.

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[MUSIC PLAYING]

Remember back to the height of the Covid-19 pandemic, everyone’s waiting on tenterhooks for a vaccine, and the US pharma giant Pfizer is on the case.

News clip 1
The FDA has now granted full approval of the Pfizer Covid-19 vaccine . . . (cuts to other news clips)

News clip 2
. . . Pfizer is shipping out the first doses of the coronavirus vaccine . . . 

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Michela Tindera
Oliver says that Covid transforms Pfizer. It takes it from the company that was best known for developing drugs like Viagra and Lipitor and turns it into the stock to invest in.

Oliver Barnes
And it has the almightiest of all almighty bull runs. And its market cap soars to more than $350bn. Record highs, basically.

Michela Tindera
And Pfizer CEO Albert Bourla is thrown into the limelight.

Oliver Barnes
Bourla is someone who is praised for delivering the Covid vaccine, effectively taking on the status of like a world leader during the pandemic. I mean, he is held in like incredibly high esteem.

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Michela Tindera
He writes a book. President Joe Biden calls him his good friend. But as Covid fades into the rear-view mirror, Pfizer starts to face new challenges. For one, the vaccines become old news, and then the next big thing in pharma kicks off.

Oliver Barnes
There’s pharmas that have weight-loss drugs and are making money out of them, which are two companies: Eli Lilly, the world’s biggest-ever pharma company, and Novo Nordisk, the world’s second-biggest ever pharma company, and then everyone else. So it’s the kind of story of, like, there are these ones doing gangbusters and Pfizer’s a bit of an also-ran at the moment.

Michela Tindera
But even so, Pfizer is sitting on this Covid vaccine windfall and Albert Bourla seems to have a plan to find new ways for the company to grow.

Oliver Barnes
They obviously get all this money from Covid. And partly using that cash and partly using debt, they go and fund $70bn worth of M&A.

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Michela Tindera
Most importantly, in March of 2023, Pfizer announces it’s making a $43bn acquisition of a cancer drugmaker called Seagen.

Oliver Barnes
Seagen is in like quite a cool, hot area of drug discovery. But the doubts that investors have about this acquisition — it’s a big acquisition, it’s $43bn — and the consensus among investors about the Seagen acquisition is that Pfizer basically overpaid. To a lot of investors, it doesn’t look like the kind of acquisition that is creating value.

Michela Tindera
And so these factors — the slowing demand for vaccines, the rise of weight-loss drugs and the M&A spree that upset investors — they all play a role in Pfizer share price collapsing.

Oliver Barnes
Basically, all the pandemic gains evaporate and it falls to, like, pre-pandemic levels. And it goes from like a high of nearly $60 a share to now like $29 a share or thereabouts.

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[MUSIC PLAYING]

Michela Tindera
This makes the company start to look like a prime target for an activist investor.

Maria Heeter
So the goal of activist investing is primarily to make money.

Michela Tindera
That’s Maria Heeter. She covers deals for the FT, and she’s been following the story with Oliver. 

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Maria Heeter
Activist investors tend to come into a company stock. They accumulate a position, and then they’ll knock on the door of management, the CEO, the board, and say, we are shareholders in your company. We have a large position. We would like to see the share price go up. And they outline a list of decisions, changes that they think would make that share price go up.

Michela Tindera
And this is where the hedge fund, Starboard Value, comes in.

Maria Heeter
They’re probably best known for, in 2014, replacing the entire board of directors of the parent company of Olive Garden, which is a casual Italian dining restaurant loved by people in the US. They’d outlined a very detailed presentation that sort of went so granular that they criticised Olive Garden for not salting their pasta water adequately.

Michela Tindera
Maria says that investing in tech companies is more of Starboard’s breadsticks and butter. It’s dabbled in pharma before but without much success. And when it spots Pfizer’s cratering share price, it wants another shot at the sector. So earlier this year, Starboard starts quietly building up a $1bn stake in the company.

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Oliver Barnes
The ambition of Starboard is to make the stock pop, right? They’ve parked $2bn in it. If the stock goes up 20 per cent, they make $200mn, right?

Michela Tindera
The issue is Oliver says that there’s not much Starboard can do to really pop that share price up any more. Bourla has already taken a lot of the steps that an activist would typically come in and do.

Oliver Barnes
The kind of questions or doubts everyone’s had about Pfizer having activists, like, what levers are there to pull in Pfizer. The typical kind of playbook and tactics of an activist are not really there with Pfizer. So to go through a couple obvious examples, activists often call for divestitures where you go, you’ve got this division, sell it off. Investors will like it. You’ll make money out of it. Pfizer’s basically done all its divestitures.

Then investors might say, we either block or encourage you to do acquisitions. The Seagen acquisition’s closed. They can’t block it. They can’t unwind it. Pfizer has a very high debt level. It spent most of the Covid money. It can’t go and do more acquisitions. So that avenue is kind of closed off, too. And then maybe Starboard can outline a plan of how Pfizer can basically do better in terms of, like, costs. But they’ve done a 5.5 or outlined a $5.5bn cost-cutting drive over the past couple of years, which runs through to 2027. So that’s kind of been done, too.

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Michela Tindera
But Oliver and Maria’s sources have told them that Starboard sees Pfizer CEO Bourla and his acquisition spree as the problem.

Oliver Barnes
When you kind of read the tea leaves, it leaves you to one place, right? Maybe Starboard’s target in this is the man himself — the CEO.

Michela Tindera
Now, remember, Starboard doesn’t have loads of experience investing in pharmaceutical companies. And that means it could be a tough sell to come in as an activist and propose big structural changes to Pfizer. So while it’s building up the stake, Starboard also starts building up its campaign’s credibility by recruiting two key people.

Maria Heeter
They were lucky to enlist the help of two of Pfizer’s longest-serving executives who had left the company. That’s Ian Read and Frank D’Amelio. Ian Read was the longtime CEO of Pfizer who actually gave Albert Bourla his job, and Frank D’Amelio was the company’s chief financial officer. Being able to tap the resources of two former longtime pharmaceutical executives gave them a lot of leverage. It’s a sign to the board and to investors and to the management team that something needs to change at Pfizer if two of its longest-serving former executives are unhappy with how the company has performed.

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Michela Tindera
These are also two people, Read and D’Amelio, who Albert Bourla really seems to think highly of.

Oliver Barnes
Reading through Albert Bourla’s book Moonshot, which is his kind of reminiscence on what happened during the pandemic, he calls Ian Read a man of strong convictions from whom I learned a lot. And he says of Frank D’Amelio, he’s a long-standing and highly regarded chief financial officer who likes to roll up his sleeves and problem-solves. These are like out-and-out compliments.

Michela Tindera
Now, at this point, as Starboard is building up its stake and getting these former execs involved. The CEO, Albert Bourla, has no idea of Starboard’s plans until he sees that blank email. (Email alert bleeps) So let’s go back to that moment a few weeks ago on Sunday, October 6th.

Oliver Barnes
What I think the biggest jolt for him is when he receives that email is that his former finance chief has turned on him, right?

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Michela Tindera
Just moments after the email lands in Bourla’s inbox, Read and D’Amelio realise what happened and start damage control. They both call up Bourla and they urge him to hear Starboard out.

Oliver Barnes
And I’m sorry, for anyone on a human level, that is the most extraordinary gut punch, right? The guy who was your predecessor then turns round a few years later and is, like, the way you’ve run the company is so bad that I’m now working with an activist investor who’s going to call for a shake-up of it.

Michela Tindera
Scale of one to five, five being the worst, how bad is this situation?

Oliver Barnes
Six. (Chuckles) You know what I mean? Like, it’s crazy, isn’t it? Basically their former colleagues have turned on them.

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Michela Tindera
But within a few days, a lot unravels. By Wednesday . . . 

Oliver Barnes
Frank D’Amelio and Ian Read put this statement out, basically saying, we’re not backing Starboard. We’re actually backing Albert Bourla, his management and the board. And everyone’s like, what?

Michela Tindera
Yeah, exactly. What?

Oliver Barnes
In Starboard’s telling, an unnamed representative from Pfizer threatened to sue Read and D’Amelio. Starboard says that they offered to cover their legal fees, but they still dropped out of the campaign.

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Michela Tindera
So that’s what Starboard says happened. And Read and D’Amelio haven’t made any kind of public statements since they decided to change sides back to Bourla. So it’s tough to say exactly what made them switch. But one thing is clear: this decision really dents Starboard’s chances for a successful campaign. Having two former executives on their side really gave them a lot of firepower. And without it, Starboard could be back to square one.

Coming up, we’ll look at Starboard’s next move and what this could mean for Albert Bourla.

[SWAMP NOTES PODCAST AD PLAYING]

Michela Tindera
So last we heard, these two ex Pfizer executives, Ian Read and Frank D’Amelio, have pulled their support for Starboard and are backing Bourla in his fight. So Maria, if we’re to take stock of this situation right now, walk me through just like how bad is this for Starboard that their plan was revealed early in basically a fat-fingered email.

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Maria Heeter
Activists benefit, I think, from surprise and also from preparation. So the company is usually at the back foot. They’re learning about the stake sometimes through a story in the Financial Times, sometimes in a presentation. And the company sort of typically, like, scrambles to respond. In this case, Frank D’Amelio’s fat-fingered email, which was sent to Albert Bourla, gave the company a chance to sort of mount its defences. Now executives at Pfizer have been able to tap advisers like investment bankers or lawyers to strategise on how to sort of stymie Starboard’s involvement.

Michela Tindera
But despite losing Read and D’Amelio’s support, Starboard is still pushing ahead with its campaign. Yesterday, October 22nd, at an activist investor conference in New York, Starboard went ahead and officially presented their plan for Pfizer. So, Oliver, what happened at this meeting?

Oliver Barnes
So basically, all the great and the good of the activist investment world got together at the Pierre Hotel, which is like a plush, old-timey hotel just off Central Park. And the headline act was Jeff Smith, the chief executive and chief investment officer of Starboard. And in his 40-minute or so speech, what Smith outlined was how — in quite acute detail — was how under the tenure of Dr Bourla, Pfizer had failed to deliver on turning many of its experimental drugs into blockbusters, drugs that generate more than $1bn in revenue, and also its R&D spending and spending on M&A had failed to yield revenues and growth in a way that other peers have managed to do. And there was one particularly striking line in the presentation where he calls on management and the board to do something different. He says he thinks it was unlikely that Pfizer would be able to reverse its declining revenues and languishing performance. Effectively, I think he’s basically saying, let’s think about the CEO and whether he should still be in his job.

Michela Tindera
Oliver, you already mentioned that the company’s made a lot of the changes that activists typically try to do to raise the share price. I mean, you know, cost-cutting, divestitures. So what sort of impact is this presentation going to have on the success of this campaign?

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Oliver Barnes
What happens next is not ultimately down to Jeff Smith, Starboard, even Albert Bourla. It’s about the 13 other board directors of Pfizer who now are going to be thinking in their private moments about whether Dr Bourla is the guy to carry this company forward and give it a post-pandemic future. And maybe Starboard’s gamble is that them coming out and putting pressure on Pfizer’s management gives some of those board members, if they are discontented with Dr Bourla, the cover to make that known.

Michela Tindera
Now, we mentioned that Starboard hasn’t run loads of activist campaigns on other pharmaceutical companies. How much of a difference does that kind of experience make and just how all this could turn out?

Oliver Barnes
Starboard’s most high-profile campaign in pharma was trying to block Bristol Myers Squibb’s $74bn acquisition of Celgene, but ultimately that case ended up failing and the acquisition happened. They did, however, still make money and there’s a lesson in that, right, which is that maybe the asks that Starboard has for Pfizer don’t come through, but they may still end up making money out of the position, right?

Michela Tindera
Yeah. So it’s like . . . 

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Oliver Barnes
If it’s successfully done. 

Michela Tindera
. . . these activists. Yeah, their bottom-line goal is to make money, get a return, get the share price to go up in some way. One would think the way to do that would be to make strategic changes to the company. But if they don’t do that, it can still work out for the activists.

Oliver Barnes
It can still work out, yeah. Like if they get the stock to move in a positive direction, it could still work out. And it’ll be interesting to watch because maybe they see it as, let’s just throw everything at it and like that means it could get even more acrimonious.

Michela Tindera
Right. But why is it that activist campaigns and pharma seemed to just not gel so well together?

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Oliver Barnes
So this is maybe one of the issues why, like activism struggles in pharma, right, is because pharma relies on this thing called science. And science is tricky and there’s failures in it and stuff like that. And that’s one of the things the Starboard contends with in its campaign against Pfizer, right? Which is that Pfizer and all these drugmakers work off the basis of making bets on science, putting money towards science, whether that’s through R&D or whether that’s through going and buying biotechs. And, you know, Starboard might have like an eye for the detail, they might have one of the best constructed decks ever and it might be perfectly worded and written, but they don’t determine whether or not a drug works in clinical trials or not.

Michela Tindera
You know, I have to admit, I mean, it’s pretty wild to hear that this guy, Albert Bourla, whose company and vaccines basically helped the world restart during Covid and prevented loads of deaths, is just a few years later being targeted like this. I mean, what have your sources said about this? I mean, it feels a bit like a Shakespearean tragedy.

Oliver Barnes
It is a bit tragic. I mean, there’s one thing getting activists, there’s another thing getting an activist who is collaborating with the guy who hired you. But, you know, the guys managed to make it to the top of one of the world’s biggest drugmakers. He played this huge front foot forward role during the pandemic. The guy likes a fight. He likes strategy. So one would expect that, like, you know, despite the kind of personal dynamics and complications involved in all of this, he is going to rise to whatever kind of challenge Starboard presents him and try and find a route through it. And that route through it might be closing the door on them and saying, we’re not listening to you. That might be trying to find a settlement that like is a compromise between the two parties and draws a line under this quickly. But yeah, it’s not the last we’ve heard from him.

[MUSIC PLAYING]

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Michela Tindera
Behind the Money is hosted by me, Michela Tindera. Saffeya Ahmed is our producer. Sound design and mixing by Sam Giovinco and Joseph Salcedo. Special thanks to Dan Stewart. Topher Forhecz is our executive producer. Cheryl Brumley is the global head of audio. Original music is by Hannis Brown. Thanks for listening. See you next week.

[MUSIC PLAYING]

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Travel

Ryanair to launch 11 new flights from two UK airports this year

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Ryanair is launching new UK flights, including nine new routes from Birmingham Airport

RYANAIR has confirmed new routes are being launched this winter from two airports outside of London.

Both Birmingham and Manchester will be welcoming the new flights later this year.

Ryanair is launching new UK flights, including nine new routes from Birmingham Airport

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Ryanair is launching new UK flights, including nine new routes from Birmingham AirportCredit: Alamy
Destinations include Paphos, Paris and Agadir (pictured)

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Destinations include Paphos, Paris and Agadir (pictured)Credit: Alamy

From Birmingham, the budget airline will launch flights to Agadir and Marrakech in Morocco, as well as Paphos in Cyprus and Paris.

Other destinations include Lodz (Poland), Plovdiv (Bulgaria), Treviso (Italy) as well as Berlin and Derry.

An official start date for each destination has not been confirmed, although the flights are already on sale from £19.99 as soon as next month.

The airline has been operating from Birmingham for 34 years, with the new routes taking it up to 39 destinations.

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Ryanair’s head of communications Jade Kirwan, said they would also be expanding their existing winter routes.

She told local media: “Ryanair will operate a total of 39 routes to/from Birmingham this winter with extra flights added on 8 of our most popular routes.

“[This includes] city breaks like Bucharest, Budapest, and Krakow, alongside winter sun hotspots, like Barcelona, Malta and Porto, giving our Birmingham customers even more choice and regular connections at the lowest fares in Europe.”

She confirmed that the airline saw a 13 per cent growth in traffic from Birmingham Airport this year.

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And the two new routes being launched from Manchester are Memmingen in Berlin and Tangier in Morocco.

Ryanair currently operates 65 routes from Manchester, making it one of the major airlines at the airport.

The new routes will welcome as many as 7.6million passengers to and from Manchester.

Ryanair launches new flights to cheap holiday hotspot

Manchester Airport managing director, Chris Woodroofe praised the news.

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He said: “We’re proud to connect the north to the world, with a route network unrivalled by any UK airport outside London.”

This week, new routes from Liverpool also launched.

Ryanair confirmed that Budapest, Marrakech and Paphos would now operate from Liverpool Airport.

Along with increased flights for existing routes, this takes the current destinations offered by Ryanair from Liverpool to 24.

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Earlier this month, Ryanair launched their first ever flights to Turkey.

Having previously operated routes to Turkey from Dublin and Bratislava, the airline will now operate from London Stansted.

Starting next year, the new routes include Bodrum and Dalaman, with £30 fares.

Luggage Rules for Major Airlines

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British Airways

  • Cabin Baggage: 1 cabin bag (max 56 x 45 x 25 cm) and 1 personal item (max 40 x 30 x 15 cm), total weight up to 23 kg.
  • Checked Baggage: Economy allows 1 bag up to 23 kg. Premium Economy, Business, and First Class allow more.

EasyJet

  • Cabin Baggage: 1 small cabin bag (max 45 x 36 x 20 cm), no weight limit but must fit under the seat.
  • Checked Baggage: Fees apply, up to 23 kg per bag. Passengers can pay for additional weight up to 32 kg.

Ryanair

  • Cabin Baggage: 1 small bag (max 40 x 20 x 25 cm). Priority boarding allows an additional larger cabin bag (max 55 x 40 x 20 cm, up to 10 kg).
  • Checked Baggage: Fees apply, options for 10 kg or 20 kg bags.

Virgin Atlantic

  • Cabin Baggage: Economy and Premium allow 1 cabin bag (max 56 x 36 x 23 cm, up to 10 kg). Upper Class allows 2 bags.
  • Checked Baggage: Economy Light has no checked baggage. Economy Classic, Delight, and Premium allow at least 1 bag up to 23 kg. Upper Class allows 2 bags.

Emirates

  • Cabin Baggage: Economy allows 1 bag (max 55 x 38 x 20 cm, up to 7 kg). Business and First Class allow 2 bags (total up to 12 kg).
  • Checked Baggage: Economy Class varies by fare type (from 20 kg to 35 kg). Business and First Class allow up to 40 kg and 50 kg respectively.

Next week Ryanair flights to Lapland-Rovaniemi will take off from both London and Liverpool.

And back in April, the airline launched flights from Norwich Airport for the first time.

The airline confirmed new routes at Manchester Airport as well

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The airline confirmed new routes at Manchester Airport as wellCredit: AFP

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In a first, Kerala lottery revenue breaches Rs 11,000 crore mark- The Week

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In a first, Kerala lottery revenue breaches Rs 11,000 crore mark- The Week

Kerala’s lottery revenue crossed Rs 11,000 crore for the first time in history. The state’s major share of tax and non-tax revenue comes from a few key commodities, including petroleum, alcoholic beverages, and lotteries. In 2022–23, lottery sales generated ₹11,892.87 crore, accounting for 78.67 per cent of the state’s non-tax revenue.

The state’s total own revenue in 2022–23 was Rs 87,086.11 crore, 1.42 per cent higher than the budget estimates. Notably, while the budget had projected lottery revenue at Rs 8,402 crore, the actual figure reached Rs 11,892.87 crore—41 per cent higher than expected, providing a significant boost to the overall revenue.

According to the latest CAG report on state finances, non-tax revenue, which has ranged between 7.51 and 13.59 per cent of the state’s revenue receipts over the last five years, saw a substantial increase of Rs 4,655.45 crore (44.50 per cent) in 2022-23 compared to the previous year.

Back in 2013-14, the state lotteries contribution to state exchequer was Rs 3,796 crore. A decade later, this contribution has increased by 213.3 per cent, reflecting a significant rise in revenue from state lotteries.

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Other than State Own Tax Revenue and Non-tax Revenue, the other sources of receipts for a state government are the devolution of States’ share in taxes, Grants in aid and transfers from the Union Government and non-debt capital receipts. The share of Grants-in-aid in revenue receipts rose from 12.27 per cent in 2018-19 to 20.63 per cent in 2022-23, indicating Kerala’s increased reliance on the support of the Union government. The State Government received Rs 4,587.79 crore as the central share for the Centrally Sponsored Schemes (CSSs) in the year.

Some critics contend that lotteries disproportionately affect low-income individuals who spend a larger share of their income on tickets. This has led some to describe lotteries as a “tax on the poor”. Notably, lotteries yield significant GST revenue also on the sales value. Against the actual sale proceeds of Rs 11,892.87 crore during 2022-23, the GST collected on sales value is Rs 1,660.52 crore. That brings the total contribution from lotteries to Rs 13,553.39 crore, reaffirming its role as a crucial source of revenue for the state government.

Kerala government, however, claims to spend a major share of revenue it earns through lottery sales on expenses like distribution of prizes and agent commission and that the money is being diverted back to the people. Notably, the state lotteries have a wide distribution network of more than 55,414 agents and over 1.5 lakhs retailers.

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Credit Card Companies Secretly Adding Fees – How to Avoid Hidden Charges

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What is the Average Credit Score in the UK

Hidden Fees Alert: How Credit Card Companies Are Charging You Without Warning: Credit Card Fees Under Fire – How to Avoid the $1.99 Paper Statement Charge

Two major credit card companies are facing backlash for quietly imposing a $1.99 fee on consumers opting for paper statements. In a push to encourage customers to switch to digital statements, these companies are penalizing those who still prefer traditional paper billing. However, there are ways to avoid this fee—by opting into electronic statements or contacting your card issuer for potential exceptions.

The Shift to Digital Statements and the $1.99 Fee

Credit card issuers, including Synchrony Bank and Citibank, have introduced this fee for customers who choose paper statements instead of going digital. Synchrony Bank, which offers more than 100 co-branded and store-affiliated credit cards—such as Sam’s Club Credit Card, Lowe’s Store Card, and Amazon Store Card—is one of the key players imposing the charge. Citibank followed suit in late 2022, requiring customers to switch to paperless billing to access their accounts online or through the Citi Mobile App.

Despite the shift, legally, credit card companies must still offer paper statements, but customer consent is required for paperless billing. Many customers, like Alicia Galowitsch, find themselves facing additional costs. “It’s very tight for us,” she told NBC, explaining how these fees have impacted her household finances. “We had to start going to a food bank. It’s going to be $11.94 [in fees],” she shared, highlighting how small fees can quickly add up for families managing multiple accounts.

For some, paper statements are essential for organization, particularly when managing multiple credit card accounts. Ms. Galowitsch added, “If I’m not here, the payments are going to be late because [my husband] Mark’s not going to know what to do.” For people who rely on paper statements to stay organized, these new fees feel like an unfair burden.

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Related: Should I use my credit card for big purchases?

Growing Consumer Frustration and Security Concerns

Beyond the financial strain, many customers are also concerned about the security risks associated with digital statements. Those who aren’t comfortable with online banking worry that going paperless could leave them vulnerable to fraud. In response, frustrated credit card holders have taken to forums like Reddit to voice their discontent.

One Reddit user shared, “I received a letter today about my PayPal Mastercard. Starting in April, they will impose a charge if you don’t opt for electronic statements.” The fee in this case is $2.50—slightly higher than Synchrony’s—but still a source of frustration. Another user mentioned they were closing their account entirely due to the fee.

This latest wave of fees follows recent changes by credit card giants Visa and American Express, which subtly reduced the value of rewards points. With Americans sitting on millions of credit card points for flights, hotels, and cash-back options, the impact of inflation has caused these points to lose value. Once worth roughly one cent per point, their purchasing power has dropped by 20% since 2018, according to data from the Bureau of Labor Statistics.

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How to Avoid the Paper Statement Fee

If you’re being charged for paper statements, here’s how you can avoid paying unnecessary fees:

  • Switch to electronic statements: Opting for digital billing is the simplest way to sidestep the fee.
  • Request an exception: In some cases, particularly for elderly or disabled customers, credit card companies may waive the fee upon request.
  • Track your statements online: Even if you prefer paper, familiarizing yourself with online banking can help you stay on top of your finances.

Signs Your Credit Has Been Compromised

Amid concerns about switching to online statements, it’s crucial to keep an eye out for signs that your credit may have been compromised. According to Michael Bruemmer, vice president of Experian Global Data Breach Resolution, these warning signs should not be ignored:

  • Unrecognized charges on your credit card or bank account
  • Unexpected credit checks appearing on your report
  • Receiving unfamiliar bills
  • A sudden drop in your credit score

“If you notice any of these, it could be a red flag that someone is using your identity,” Bruemmer warns. Early detection is key to minimizing potential damage to your credit.

Conclusion

As credit card companies push customers toward digital billing, it’s important to stay informed about fees and how they can impact your finances. Whether you’re holding onto paper statements for organization or security reasons, knowing how to avoid fees can save you money. Stay vigilant about your accounts, and keep an eye out for any signs of fraud to protect your financial health.

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WPP returns to sales growth but warns over economic uncertainty

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Unlock the Editor’s Digest for free

WPP returned to net sales growth in the third quarter but the advertising agency warned of continued economic uncertainty and a tougher end to the year.

The London-based marketing group said like-for-like revenue when removing pass-through costs — the fees paid to external suppliers — was up slightly in the third quarter by 0.5 per cent to £2.8bn. 

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However, WPP said this measure for the full year would be between 1 per cent lower to flat, warning that recent client wins would only start to benefit the company next year. Shares in the group rose almost 4 per cent to 804p, taking its market capitalisation to £8.7bn.

Revenue growth in the US and western Europe was offset by a fall of more than a fifth in China, which WPP blamed on client losses and “persistent macroeconomic pressures impacting both our media and creative businesses”.

UK revenues were flat for the quarter. Mark Read, WPP chief executive, said consumers were being cautious ahead of next week’s UK Budget, which had caused a similar slowdown in marketing activity. He said the long wait for a Budget widely expected to bring tax rises had “not helped”.

“It has been a little bit wait and see,” he said, adding that while “people are expecting tougher times ahead financially”, clarity on the Budget “will make things easier to see”.

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Read said US consumers were also feeling pressure, especially in the lower income brackets, but that the country’s economy remained strong ahead of the election next month.

WPP this summer was forced to downgrade its revenue forecasts for the rest of the year, but Read said the “momentum” behind the company was better given recent successes in gaining and retaining clients.

“It’s an important first step to demonstrate the competitiveness of our offer,” he said, pointing to the adoption of AI in its businesses and services offered to clients.

He predicted that using AI tools would make WPP staff “20 per cent more productive”, but said the impact of the technology on job numbers was not clear as he expected that AI would also “make more work”.

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“We are encouraged by progress during the quarter, but with recent new business wins primarily impacting 2025 and continuing macroeconomic pressures, our expectations for the full year remain unchanged.”

Analysts at Shore said the company had shown “a positive revenue performance, progress against strategic goals, client wins and retentions and a reiteration of full-year guidance”.

But they added that “WPP’s performance, although improved, remains some way below best in class” rivals such as Publicis.

The planned disposal of a majority stake in corporate public relations firm FSG Global to KKR is on track to close in the fourth quarter, with expected net proceeds of about £604mn

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WPP, with its partner Bain Capital, is also looking to sell Kantar Media, a division of the Kantar market research group that runs the UK’s TV audience measurement system. The sale has attracted interest from a number of private equity groups, according to people close to the talks.

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The Morning Briefing: AHR Group’s ‘USP’; ‘possibility’ the chancellor may create a new tax

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The Morning Briefing: Phoenix Group scraps plans to sell protection business; advisers tweak processes

Good morning and welcome to your Morning Briefing for Wednesday 23 October 2024. To get this in your inbox every morning click here.


AHR Group’s transparency is its ‘USP’

The success of AHR Group is due to the “transparency of the whole business” whereas the financial sector has been “historically opaque” which has given the international financial advice firm a “USP”.

This is what AHR Group managing director & co-founder William Burrows told Money Marketing when explaining how the firm first came about.

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AHR Group was founded in 2020 following the merger of UAE-headquartered Arlo Wealth and Harrison Rowe, an international advisory business.

Founders Burrows, Tyla Phillips, Asad Sheikh and Daniel Waterman were at Harrison Rowe whilst Daniel Dickinson and Marc Beattie were at Arlo Wealth.


‘Possibility’ the chancellor may create a new tax during the Budget

There is a “possibility” that chancellor Rachel Reeves may create a new tax during the Budget on 30th October.

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This is what Barnett Waddingham self-invested pensions technical specialist James Jones-Tinsley told Money Marketing.

“There is a lot of precedent that this may happen,” and as Reeves is early into her career as chancellor she could be “experimental”.

Jones-Tinsley predicts that the new tax would be likely to target the ultra-wealthy who traditionally vote Conservative.

Still, a new tax brings with it, a lot of “unprecedented” changes as well as legal challenges as ultra wealthy people tend to have lawyers, Jones-Tinsley said.

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In Conversation With… Jordan Sriharan: Navigating Turbulent Waters – A Market Outlook and Strategies for Financial Advisers

Join Kimberley Dondo and Jordan Sriharan, Fund Manager at Canada Life Asset Management, as they discuss the current market landscape and the impact of global trends on the UK.

In this episode, Jordan shares his revised outlook, outlines strategies for mitigating risk, and identifies potential opportunities for UK investors.

Tune in for valuable insights and actionable takeaways to help you navigate the turbulent waters and guide your clients through these challenging times.

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Quote Of The Day

Lloyds is the first major UK bank to report third-quarter earnings, and it hasn’t disappointed. In tune with recent trends, impairment charges were better than expected and drove a good chunk of the pre-tax profit beat, as borrowers continue to stand firm

– Hargreaves Lansdown senior equity analyst Matt Britzman on Lloyds Q3 earnings with underlying profit coming in higher than expected



Stat Attack

Association of Investment Companies (AIC) research shows how the Financial Conduct Authority labels to tackle greenwashing will impact trust in sustainability claims for financial advisers and wealth managers.

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64%

said the labels would increase their trust, with this number higher among wealth managers (78%) than financial advisers (55%).

54%

said the Sustainability Focus label is most likely to be used for screening purposes. The Sustainability Impact label was the second most popular (52%), followed by Sustainability Improvers (47%) and finally Sustainability Mixed Goals (37%).

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63%

of private investors said they would increase their trust in funds’ sustainability claims.

71%

of private investors who held sustainable investments already have increased their trust in funds’ sustainability claims.

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Source: AIC 



In Other News

Allfunds a B2B WealthTech platforms for the fund industry, which offers fully integrated solutions for both fund houses and distributors, has releases a trading update for the third-quarter period ended 30 September 2024.

Its total assets under administration (AuA) increased by 10% since December to €1,522bn, representing a 15% increase year-on-year.

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Platform service AuA increased by 19% to €1,102bn year-on-year with “strong” net flows in the quarter (€23bn) continuing the positive evolution since Q1.

Total net revenues of €154m, representing a 16% increase year-on-year underpinned by significant growth in both net platform and subscription revenues.

Allfunds chief executive officer and founder Juan Alcaraz said: “Allfunds delivered another quarter of robust, diversified growth. We are proud to announce a new record milestone of €1.5trn in AuA, driving a 16% increase in revenues year-on-year. Our core platform business continues geared to an improving macro cycle. Our dedicated commitment to innovation and technology allows us to deliver a unique one-stop shop proposition, following the launch of our top-leading Alternatives solutions platform and expanding into our recently announced ETP platform.

“Our ongoing digital transformation efforts are central to this success, enhancing our platform’s capabilities and client experience, thereby establishing us as the premier Wealthtech partner for our clients. In this quarter, we are also pleased to announce the completion of our share buyback programme, further demonstrating our commitment to delivering value to our shareholders.”

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Stocks drift, dollar and gold rise as traders weigh US rates, election (Reuters)

Donald Trump accuses UK Labour party of interference in White House race (Financial Times)

Local transport funding at risk as Reeves considers big budget cuts (Guardian)


Did You See?

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Industry experts have urged the government to “keep up the momentum” after it gave an update on the Pensions Dashboard Programme yesterday (22 October).

Pensions minister Emma Reynolds announced that the MoneyHelper Pension Dashboard service will be made available before commercial dashboards.

Reynolds added that it is too early to confirm a launch date to the public.

The Department for Work and Pensions (DWP) previously said the launch date will only be announced once it is assured most pension schemes have connected and the dashboards are working well.

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The Pension Dashboards Programme (PDP) has been given the task of developing the Pension Dashboards ecosystem and organising for most schemes to connect to it.

Pension schemes must connect to the dashboard ecosystem by October 2026 at the latest, but have been urged to connect earlier, starting from April 2025.

The FCA is expected to publish the final rules of the governance framework for commercial dashboards before the end of the year.

Dan Cooper has the full story.

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Meet T.M. Mathachan, the man who made Ratan Tata a ‘taxi-driver’- The Week

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Meet T.M. Mathachan, the man who made Ratan Tata a ‘taxi-driver’- The Week

T.M. Mathachan breaks into a smile as he recollects the time Ratan Tata walked up to him and asked, “Don’t we know each other? Then, why didn’t you come and say hello when you saw me?”

As young men, this former employee of TELCO (now Tata Motors) and the chairman emeritus of Tata Sons were hotel-mates in Jamshedpur. Now retired and settled in his home in Kandanad in Kerala’s Ernakulam district, Mathachan could not stress enough the warmth of the legendary industrialist.

Mathew, known locally by his family name as Thukalan Mathachan, and Tata were hostel-mates in 1962 when they were trainees in TELCO. He fondly remembers Tata as the personification of grace, nobility, and humility.

ALSO READ: Ratan Tata’s 12 closest family members

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After the training, Tata moved back to Mumbai. After a decade or so, Tata spotted Mathachan in the crowd when he was leading a delegation from Africa to the training centre in Jamshedpur. As he was an employee, Mathachan chose to be professional and stayed in the background. However, Tata spotted him immediately, walked over, and broke the ice with his friendly query.

No special service

The Jamshedpur hostel was managed by the trainees themselves. So, they devised a way to keep the mess bills down—providing room service to special guests. This and any other additional privileges were billed and the money was added to the common pool. Tata was given special service, but he was only charged the regular amount.

The following month, when Mathachan took over as mess manager, he mentioned the discrepancy to Tata and suggested that it should be corrected. The conversation was interrupted by a shocked hostel warden, but Tata intervened, saying, “He has the patience to explain it to me, and I have the patience to listen. Please don’t interfere.”

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READ MORE: End of an era: Ratan Tata, titan of India Inc, passes away

Tata explained that he assumed the meals were being sent to his room as his presence in the dining hall might inconvenience others. Mathachan assured him that his presence was always welcome. Tata smiled and added humorously, “By the way, my car is a bit large. Do I need to pay a parking fee?”

Tata, the ‘taxi driver’

Mathachan also recalled the time when Baiju, a canteen worker from Odisha, fell off his bicycle and injured himself. As Mathachan rushed around to find transportation to the hospital, Tata stepped in and offered his car. When Mathachan said a taxi might be more appropriate, Tata insisted on using his car and personally drove Baiju to the hospital.

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ALSO READ: Tata and Tejas: How Ratan Tata saved light combat aircraft Tejas programme from being shut down

While returning, Tata asked Mathachan, “Aren’t you the one who insists on following all the rules? Shouldn’t I be paid taxi rates for this trip?” To this, Mathachan replied, “How could I ever think of you as a taxi driver?” The trainees both laughed at the banter as they drove down to the hostel.

Sitting in Kandanad, Mathachan today mourns a man who was his boss, and genuinely, a friend.

(This story first appeared in Malayala Manorama)

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