Unilever, recognized for its extensive portfolio of brands including Dove soap and Hellmann’s mayonnaise, was navigating its latest transformation initiative under Schumacher, which was dubbed the “growth action plan” aimed at enhancing productivity and re-establishing growth momentum. This initiative was part of an ongoing series of strategic overhauls, following previous plans like the “sustainable living plan” in 2012, “connected 4 growth” in 2016, and “compass for sustainable growth” in 2020.

Progress had been evident, thanks to a more concentrated focus on core brands, evidenced by improving sales and the upcoming divestiture of its £13 billion ice cream business. In 2018, Unilever’s return on invested capital was 28.9%, which dipped to 18.1% last year, although this represented a near one percentage point increase from 2023. Additionally, gross margins have risen from under 40% in 2022 to 45% by the end of last year.

The promotion of Chief Financial Officer Fernando Fernandez to CEO is seen as aligned with his distinctive management style. The Argentinian executive, who has been part of Unilever since 1988, is characterized as having a more unconventional approach, possibly allowing him to make bold decisions that could yield swift results.

Fernandez’s agenda appears extensive, particularly as shareholders are urging the company to streamline its operations. Unilever has been preparing to list its ice cream division in Amsterdam, while Schumacher had committed to divesting up to £1 billion in its food brands. The company has already pared down its food segment over the last decade, including sales of spreads and tea.

With the ice cream sector identified as less profitable—represented by an operating margin below 7% last year versus an average margin of 16.7% across its other divisions—there are expectations for further restructuring. Investors are also likely to pressure Fernandez regarding the potential spinning off of its €13.4 billion food business. This move could create a more streamlined organization focused on beauty, personal care, and home care, though concerns exist about the complexities of disentangling it from Unilever’s comprehensive supply chain.

Unilever continues to leverage its strong brand recognition, with Dove alone generating around €5 billion in sales during 2024. A significant portion of the company’s revenue—over 50%—originates from emerging markets with substantial operations in India, China, Brazil, and Indonesia, positioning it well to benefit from rising consumer demands in those regions. Investment sentiment for Unilever remains favorable among stock pickers, including fund manager Terry Smith, who referred to the CEO transition as “good news” for shareholders, describing Fernandez as “basically dynamite.”

Since the last evaluation of Unilever as a hold, its shares have increased by 3%, despite experiencing volatility. Currently, the stock trades at 17.2 times projected earnings, roughly in line with its five-year average of 17.9. The abrupt leadership change introduces significant uncertainty, particularly as Schumacher was leading a positive trajectory. The board hopes that Fernandez will take decisive actions, although a more measured strategy may be prudent for the £116 billion giant. Advice: Hold; Reason: Positive turnaround signs but leadership change poses risks.

WPP

WPP, one of the leading global advertising firms, experienced a sharp decline recently, with a loss of £400 million in its market valuation. The FTSE 100 entity has been facing prolonged struggles due to diminished demand for advertising, and a cautionary forecast for organic revenue further unsettled investors. As its shares hover near four-year lows, could this present an opportunity for value-driven investors?

The company’s financial results were disappointing; overall revenue declined by 0.7% to £14.7 billion in 2024, with pre-tax profit slipping by 3.8% to £1.5 billion. CEO Mark Read, who took charge in 2018 succeeding Sir Martin Sorrell, provided a cautious outlook, anticipating stagnant revenues this year amidst potential global economic challenges, including trade disputes and rising inflation.

WPP’s performance in China, its fifth-largest market, remains problematic. While comparable revenue fell by 2.7% in the UK and 0.7% in North America, it plummeted by 20.8% in China.

Although WPP remains a formidable player with a strong client roster—including eBay, Warner Bros Discovery, and Levi’s—fostering significant growth may be a challenge. This is reflected in the firm’s low price-to-earnings ratio of just 7.1, compared notably to about 11.4 for its French competitor, Publicis, and between 9.5 and 10 for Omnicom and IPG, which are undergoing a merger.

Market consolidation may be the most effective strategy for stimulating growth, with the recent $31 billion Omnicom-IPG agreement setting a notable precedent. However, positioning WPP against a competitor of such scale poses its own difficulties. Despite ongoing speculation regarding potential takeovers, the stock’s current valuation appears justified without a clear growth catalyst. Advice: Hold; Reason: Lack of significant growth drivers.

Jaidev Janardana, co-founder and CEO of the neobank Zopa, shared an optimistic view of the industry’s future. Recently, Zopa reported that its pre-tax profits surged to £34.2 million for 2024, accompanied by an increase in its customer base to 1.4 million.

Janardana remarked, “There are substantial opportunities for growth within sectors like fintech in the UK. I am greatly encouraged by the government’s initiatives aimed at dismantling barriers to growth,” addressing an audience of financial professionals and government representatives.

Richard Davies, CEO of Allica Bank—a provider focused on business banking for small and medium-sized enterprises—discussed plans for international expansion in the Nordics and North America, as his company’s pre-tax profits rose 86% last year to £29.9 million.

Davies emphasized the importance of further developing the government’s Growth Guarantee Scheme, which facilitates additional bank lending to private businesses under the British Business Bank’s administration. He expressed, “We would like to see this scheme expanded significantly, as it is currently smaller compared to its US or German counterparts.”

He also urged the Bank of England to revisit its regulatory policies concerning small and medium financial services firms, noting, “Certain regulations inadvertently disadvantage challenger banks… We believe that revitalizing the prudential framework will greatly assist in stimulating the next phase of economic growth in the UK.”

Tim Levene, CEO of Augmentum Fintech, a venture capital company, later discussed the need for improved access to capital for businesses.

Levene mentioned, “UK pension funds have acknowledged that they have not supported our ecosystem as extensively as they should. There is a tremendous opportunity for them over the next decade to engage and contribute to the development of diverse companies and funds. We believe unlocking this potential within the next 12 to 18 months could significantly enhance our sector’s growth.”

Emma Reynolds, the economic secretary to the Treasury, emphasized the government’s prioritization of financial services, declaring, “Financial services represent a key sector of the UK economy and play a vital role in the government’s growth agenda.”

Reynolds also introduced a fintech start-up initiative developed in collaboration with Jacksonville, Florida. The JAX Hub aims to assist UK fintechs in entering the US market and will be operated by L Marks, which specializes in nurturing growth companies. This program builds on a mutual agreement between the UK and the State of Florida to enhance bilateral trade and economic partnerships.

Gareth Thomas, the small business minister, acknowledged the significance of the UK’s reputation as a “global hub for fintech.” He stated, “Our forthcoming industrial strategy will reflect our commitment to addressing the needs of fintech enterprises concerning talent access, financing, and the broader regulatory landscape.”

Despite Chris Grigg, the chairman of Melrose Industries—a firm that has shifted its focus solely to aerospace—stepping in, a substantial 65.6 percent of voting investors opposed the company’s remuneration report.

Large compensation packages were awarded to Christopher Miller, Simon Peckham, and Geoffrey Martin, former executives no longer with the organization, each receiving over £50 million through a long-term incentive plan established five years prior. In addition, Peter Dilnot, the CEO, earned £45.4 million in total compensation and bonuses last year.

The incentive program permitted executives to gain shares equivalent to 7.5 percent of any rise in the FTSE 100 group’s market value. According to Melrose’s annual report, this remuneration approach resulted in payouts totaling around £211 million in 2024.

In his initial comments to shareholders, Grigg stated, “I explicitly acknowledge that the proxy agencies have advised against the company’s 2024 directors’ remuneration report. Additionally, I am aware that some shareholders share this view.”

Grigg further remarked, “I want to emphasize two points. Firstly, I hear you and comprehend your concerns. Secondly, based on this feedback, we will engage with shareholders to align our future directors’ remuneration policy with our evolving business strategy.”

Melrose Industries acquired the aerospace segment as part of its takeover of GKN in 2018. Subsequently, GKN’s automotive, powder metallurgy, and hydrogen segments were separated to establish Dowlais Group, which has recently accepted a cash-and-shares acquisition offer from American Axle, valuing the company at £1.2 billion.

Siblings Vivien and Howard Wong, founders of Little Moons—a Japanese-style mochi ice cream company—have focused on international markets since starting their business in 2010, maintaining a positive outlook despite numerous obstacles.

“Industry experts often advise businesses to concentrate on their domestic market before venturing internationally, as it can be time-consuming,” said Howard, 40. “We deviated from that approach, treating it like a race to get our products on shelves.”

The Wongs, hailing from northwest London, began by introducing their gelato-filled mochi to renowned restaurants in the UK and abroad, including Nobu. “We noticed the increasing popularity of Japanese cuisine in the UK, which mirrored trends in Europe and the Middle East,” shared Vivien, 45.

With assistance from the Department for Business and Trade, the Wongs participated in international trade shows. “It was truly enjoyable—like embarking on a series of adventures,” Howard remarked.

From the start, they were deliberate in crafting their strategy for international markets. “Our goal is to build a brand rather than simply shipping products,” Vivien added.

Little Moons, which generates annual revenues of £53 million and employs over 400 individuals, currently exports to 36 countries, serving both restaurant and supermarket customers.

“It’s a challenging endeavor. There’s considerable paperwork involved, and establishing a presence in new markets takes time, but it’s undoubtedly rewarding,” Vivien noted.

The company is pushing forward with plans to expand into the Middle East, and the Wongs also eye potential markets in Southeast Asia, China, and possibly Japan, the birthplace of mochi.

Despite the looming threat of US tariffs, Howard mentioned they are exploring opportunities with potential customers in the US. “The tariffs add uncertainty, but they also highlight the significant opportunities available there.” According to the Office for National Statistics (ONS), UK exports to the US increased for the third month in a row in February, reaching £5.9 billion, the highest since November 2022.

However, the British Chambers of Commerce (BCC) cautions that the overall situation for small and medium-sized enterprises (SMEs) remains less optimistic, with many reporting declining exports compared to pre-pandemic and pre-Brexit levels.

Only 12% of the 2.8 million SMEs registered with the Department for Business and Trade are currently engaged in exporting, according to recent statistics, reflecting the challenges in previous government efforts to boost export activity.

The BCC’s latest trade confidence survey, which analyzed feedback from over 1,800 exporters, indicated a “depressed” outlook among SMEs trading internationally with regards to export growth, even before the introduction of tariffs by the Trump administration on April 2.

During the first quarter of the year, only 20% of SMEs reported an increase in international trade, while over 25% experienced a decline.

William Bain, head of trade policy at the BCC, remarked, “Uncertainty regarding US trade policies likely impacted SME export activity early in the year.” The forthcoming government trade strategy should aim to enhance support for businesses in the export domain, including improved financing options. Helping firms discover new paths to market will likely be part of the solution.

The US remains the largest market for UK exports, with goods valued at over £179 billion in 2023, accounting for 21.2% of total goods and services exports—substantially surpassing Germany, which holds 7% of the market. Notably, emerging markets are experiencing rapid growth in their demand for UK goods. Exports to North Macedonia surged by 245% to £1.7 billion from 2013 to 2023, while exports to Vietnam increased by 164% to £1.3 billion; Taiwan rose by 125% to £4.4 billion, and Qatar expanded by 117% to £5.6 billion.

Tina McKenzie, policy chair of the Federation of Small Businesses (FSB), emphasized, “The landscape is already challenging for small firms looking to export. Nevertheless, the potential benefits are vast, enabling them to access new markets and diversify revenue streams.”

Advice from experienced exporters highlights that it is never too early to consider international trade, to participate in trade fairs, and to take advantage of government support initiatives.

Julianne Ponan, founder and CEO of Creative Nature, a producer of allergen-free foods, expressed her affinity for exporting. “I’m currently in Hamburg attending a trade show to promote our products to airlines,” she said.

Creative Nature derives about 20% of its sales from exports, with the Middle East identified as its fastest-growing market. “Brexit drove us to consider more distant markets like the Middle East and Australia, as logistical barriers arose for Europe, prompting us to seek alternatives,” she explained.

If she were to launch another business, she would prioritize exporting from day one.

Sean Ramsden, CEO of Ramsden International, manages the export of numerous British goods to over 100 countries. “We excel particularly in smaller, unconventional markets,” he remarked.

Ramsden International, a family-run business based in Grimsby, Lincolnshire, exports products from more than 600 British manufacturers, with popular items including chocolate, shampoo, and pet food. “We have a significant presence in markets that manufacturers often overlook, like Bolivia, and we also find the Caribbean market crucial due to its numerous small retailers,” he noted.

As a company that relies entirely on export sales, Ramsden voiced concerns regarding the possibility of a broader trade conflict but observed that bureaucratic hurdles typically pose greater challenges than the flat 10% tariff imposed by the US. “I’m hopeful that this trade tension could eventually lead to lower tariffs,” he added, noting EU discussions about potential zero-for-zero tariffs, which would greatly benefit trading conditions.

Tom Whittle, co-founder of the events firm Creation, already produces most of its events for international clients and plans to extend operations to the Far East, the Middle East, and the US. “Our primary focus is Japan, where we have built solid relationships, but we foresee expands to other Asian nations and Saudi Arabia as well,” he stated. “Our goal is to continue innovating in the events sector worldwide.”

Creation has secured a position in the Sunday Times list of the 100 fastest-growing companies for three consecutive years, reporting a profit of £1.9 million from revenues of £15 million last year.

The company is involved in designing and producing events for major brands like Red Bull, AB InBev, Bacardi, and Asos during high-profile events such as Wimbledon and Formula 1 races.

Whittle remarked on the trade war, saying, “Where others see disaster, I perceive opportunity. We are more agile and adaptable.” He concluded by highlighting that generating demand in challenging environments relies on providing clients with “fresh ideas.”

Part 2: The entrepreneurs breaking into the United States market.

BTG comprises two entities: Bytes Software Services, which caters primarily to private companies and the public sector, and Phoenix Software, which focuses on public sector clients. Remarkably, 97 percent of BTG’s revenue is generated within the UK, with around 50 percent of its gross profits stemming from its collaboration with Microsoft.

As the company approaches the release of its annual financial results, it previously disclosed in a trading update that its gross invoiced income (GII) has impressively surpassed £2 billion for the first time.

Operating profits showed a robust growth in the mid-to-high teens, alongside a cash conversion rate that exceeded the company’s goal of 100 percent, resulting in a cash reserve of over £110 million. Following the trading update, BTG’s stock price surged nearly 20 percent.

In the last financial year, BTG’s public sector GII reached £1.1 billion, marking a 33 percent increase from £857 million in the previous year. Meanwhile, GII from corporate clients rose to £685.5 million from £583 million. This significant double-digit growth is encouraging, especially given BTG’s market share of merely 4 percent in the UK, which is just slightly behind Softcat’s 5 percent.

The public sector presents substantial growth opportunities for BTG, particularly as the government has pledged to harness AI for enhancing public services. According to analysts at Shore Capital, 47 percent of central government services and 45 percent of NHS services currently lack a digital pathway. BTG is already integrating AI solutions like Microsoft Copilot into organizations such as the NHS and HM Revenue & Customs.

While BTG’s close affiliation with Microsoft is generally seen as advantageous, recent modifications to Microsoft’s partner incentive structure have raised concerns regarding this partnership.

In January, Microsoft made changes encouraging partners to shift small and medium-sized clients from traditional enterprise agreements—typically structured on a three-year cycle and billed annually—to cloud solutions provider agreements, which are billed monthly.

Andrew Holden, BTG’s chief financial officer, noted, “They are moving away from rewarding partners for transactions and shifting towards encouraging partners to influence customer consumption of specific products.”

According to Berenberg analysts, Microsoft’s incentive changes affected the last two full months of BTG’s financial year, a period that remains strong and should alleviate some market concerns. They asserted, “Concerns regarding Microsoft’s incentive adjustments appear overblown.”

BTG has also diversified its sources of gross profits over the years. At the beginning of the last decade, approximately 85 percent of its gross profits came from Microsoft, whereas this figure has now reduced to 50 percent.

BTG’s journey has not been without challenges, including the fallout from an investigation involving former CEO Neil Murphy, who resigned after executing 119 unauthorized transactions involving BTG shares between 2021 and 2023.

Nonetheless, a subsequent investigation conducted by PwC cleared the company of any wrongdoing, according to Holden, as BTG works diligently to rebuild investor trust. “It was unwise of me to overlook the share trading guidelines and governance,” Murphy stated.

Despite potential governance concerns causing some investors to hesitate, BTG shares currently trade at 22 times forward earnings, slightly below Softcat’s 23. Nevertheless, BTG shares appear inexpensive relative to their historical performance, trading at 26 times projected earnings per share for 2024.

With much of this year’s appreciation already reflected in the shares following the recent trading update, BTG presents a compelling entry point into the UK’s AI evolution, compared to Softcat.

Advice: Buy

Reason: Although valuations are elevated, they remain lower than Softcat, with strong growth potential.

Liam Molesworth, at just 31 years old, co-founded the Clive Henry Group, a technology and recruitment business focused on healthcare. His company has joined three others on the prestigious list, collectively amassing nearly £1 billion in personal wealth and providing employment for over 1,000 individuals, many of whom are alumni from the high school and other local institutions in the West Midlands.

The other notable companies making waves are Gymshark, an activewear brand established by entrepreneurs Ben Francis and Lewis Morgan, both aged 32; AYBL, co-founded by brothers Reiss, 31, and Kristian Edgerton, 30; and Manière De Voir, a fashion brand launched by former Manchester City player Reece Wabara, 32, who has appeared on the list in both 2022 and 2023.

James Siddle, deputy head of South Bromsgrove High, fondly recalls a 2019 visit to Gymshark’s headquarters near Solihull with a textiles class, noting the number of former students employed there. “It felt like a sixth form common room a few years later,” he remarked, highlighting the presence of alumni including Joe Francis and Mitch Healey, who has taken on the role of global retail and events director.

Gymshark was founded in 2012 by Francis and Morgan, who began their venture from home while balancing part-time jobs and university studies before opting to focus full-time on their business. The company achieved a valuation of £1 billion in August 2020 after a notable investment from General Atlantic, allowing Morgan to sell his stake worth £100 million while Francis increased his ownership to 70%.

While Gymshark’s sales have soared to £556 million, its profitability has taken a hit in recent months, affecting its valuation according to the latest Sunday Times Rich List. The other featured companies are also navigating the competitive landscape, fostering communication and support despite challenges.

Molesworth and co-founder Sam Alsop-Hall, 34, launched the Clive Henry Group in 2019, following Molesworth’s career as a professional footballer in Australia and Sweden. The company specializes in providing agency staff and consultancy services to the NHS, earning the No. 2 spot this year with a remarkable 265% growth in sales, reaching £20 million over three years. However, the last year has presented a tougher trading environment, resulting in stagnating revenues.

Paul Topping, the school’s headmaster from 2010 to 2017, remembers Molesworth for his outspoken nature during sixth form. Topping valued encouraging student expression and noted Molesworth’s strong personality, which later led to his success. Siddle also recalls a memorable performance by Molesworth during the school’s Pop Icons competition.

Molesworth humorously remembers a suspension incident in sixth form when he was punished for exposing himself during a casual football game outside of class time, amusingly recalling the surprised reactions of classmates.

Alsop-Hall, who completed his A-levels at an independent school, is curious about why a group of successful entrepreneurs emerged from their time at South Bromsgrove High. “I have no idea what they were feeding them,” he said.

The bond formed among these friends during school played a crucial role in their entrepreneurial achievements. Each member’s journey varied, with Wabara recalling his experience of leaving school with a contract with Manchester City, which fueled his friends’ ambitions.

Francis and Morgan’s passion for weightlifting led them to a partnership that evolved from selling supplements to launching Gymshark, initially as a side project while managing studies. Their venture took off after they shifted focus to printed apparel.

Friendships endured post-school, with Morgan encouraging Wabara towards fashion, and while Gymshark was still at an early revenue stage, Wabara’s brand Manière De Voir emerged as a creative endeavor alongside the burgeoning business.

The entrepreneurial spirit fostered amongst this group was underpinned by mutual support rather than envy. Morgan, reflecting on the group’s camaraderie, emphasized that success breeds further success, fostering a culture of hard work and ambition.

Edgerton and Molesworth also cherish their time at South Bromsgrove High, recalling the fun experiences they had while cultivating lifelong friendships. They credited their competitive experiences during sports as instrumental in shaping their drive for success.

Physical education, as emphasized by their former PE teacher Dave Bayliss, provided resilience and opportunities for teamwork—attributes that undoubtedly contributed to their later success in business.

South Bromsgrove High continues to produce remarkable talents, including singer Katherine Priddy, who performed at Glastonbury, Poppy O’Toole, a celebrated Michelin-trained chef and author, and Jess Varnish, an Olympic cyclist from the London 2012 Games.

Investing in Education for Future Entrepreneurs

As the largest Duke of Edinburgh awarding center in the country, South Bromsgrove High hosts nearly 500 students each year participating in various awards. Recently, a group collected gold awards at Buckingham Palace, underscoring the school’s commitment to fostering achievement.

Headteacher Chris Smith, who has served since 2017, has focused on enhancing employability through initiatives such as a full-time careers adviser and partnerships with local businesses for student work experiences and job interviews.

Community engagement is paramount, with initiatives like the Engineering Cadet Scheme, linking students with local businesses for practical problem-solving and project creation.

Looking ahead, Smith advocates for ongoing investment in education to nurture a new generation of entrepreneurs. “Whatever the next government is, it should continue to invest in schools because we are adept at cultivating entrepreneurial talent,” he stated.

This behavior is typical for Trump, who is known for his spontaneous decision-making. He continues to surprise in business policy discussions, especially concerning Silicon Valley. Leading up to the election, many anticipated that he would reverse President Joe Biden’s initiatives aimed at regulating major tech companies.

Past U.S. administrations have largely ignored the dominant presence of tech giants like Alphabet, Amazon, Meta, and Apple in online markets. Lawmakers traditionally hesitated to enforce standard competition rules in this evolving digital landscape, which complicated efforts to prove consumer harm—typically a prerequisite for judicial intervention. Major tech firms had grown powerful either by creating entirely new markets or by offering lower prices than traditional retail competitors.

However, Biden’s administration shifted this paradigm by appointing Lina Khan as chairwoman of the Federal Trade Commission. Khan had previously gained attention with her influential Yale paper, “Amazon’s Antitrust Paradox,” which provided a fresh perspective on online market competition.

Additionally, Jonathan Kanter, a lawyer aligned with Khan’s views, became head of the antitrust division at the Department of Justice. This tandem catalyzed an escalation in regulatory actions, leading to multiple lawsuits targeting these dominant firms. A significant milestone occurred last year when the Department of Justice successfully prosecuted Google, with a court ruling confirming its anti-competitive practices in maintaining its search engine dominance.

As Trump took office, both Khan and Kanter departed, and many assumed that the momentum to rein in big tech would diminish. Surprisingly, that has not been the outcome.

This week saw the commencement of proceedings concerning the remaining aspects of the Google case, specifically relating to penalties. Prior to that, the Department of Justice secured another major legal victory against Google, focusing on its commanding position in online advertising. This win prompted Kanter to publicly express his satisfaction, noting that it represented a significant achievement for antitrust enforcement and the principles of a free internet.

The detailed ruling reveals intricate insights into the lucrative and often opaque world of online advertising. While many are aware of Google’s search dominance, fewer understand its extensive control over the digital ad landscape. The judge, Leonie Brinkema, emphasized how traditional advertising practices failed to keep pace with the rapid interactions occurring in the online marketplace.

In the current digital environment, software programs have become the new leaders in advertising. Publishers quickly learned that relying on traditional ad agreements wasted valuable space, leading to the modern standard of programmatic advertising, which instantly connects advertisers with available ad slots and user profiles. This frantic matchmaking occurs millions of times per hour, often in the blink of an eye.

In this automated advertising economy, the company controlling the software gains significant market power. Google’s preeminence in search has bolstered its advertising visibility, further enhanced by strategic acquisitions. Notably, in 2008, Google purchased DoubleClick for $3.1 billion to prevent Microsoft from acquiring this key ad network. Then, in 2011, it acquired Admeld, a tech firm specializing in optimizing online ad placements.

The Department of Justice contended that Google held an unfair advantage in three critical areas: ad servers, auction exchanges, and ad networks. While Google maintained it competed fairly by delivering quality services, the court found against Google on the first two issues, ruling that its practices tied customers into using multiple services. Google has announced plans to appeal, arguing that advertisers choose its platform for the value it provides.

Regardless of the appeal’s outcome, the likelihood of Alphabet—Google’s parent company—facing significant legal repercussions is growing. The DoJ has called for drastic measures, including forcing Google to divest its Chrome browser and to dismantle agreements that establish it as the default search provider on mobile devices. Similar actions could be pursued against Meta, which faces potential regulatory actions aimed at its ownership of WhatsApp and Instagram.

Adding to this dynamic is Trump’s stance on tech regulation. Although he has expressed skepticism toward European regulatory efforts, his views on U.S. actions have varied.

In a recent interview, Trump appeared ambivalent about breaking up tech monopolies, suggesting that decisions should be case-by-case and market-dependent. Nevertheless, his tendency to intervene in critical corporate matters raises questions about the future direction of American tech regulation. For Silicon Valley, the hope for relief from regulatory pressures may hinge less on the judiciary and more on the White House’s stance.

Dominic O’Connell is a business presenter for Times Radio.

A report from BleepingComputer, a technology news outlet, indicates that the group executed a ransomware assault on the grocery retailer’s IT infrastructure. Sources within the industry have noted that criminal organizations often demand ransoms reaching up to £10 million to restore system access.

This unverified report states that the group, reportedly composed of teenagers and young adults based in the US and UK, initially breached the FTSE 250 retailer’s systems back in February.

Marks & Spencer has disclosed no timeline for resolving the ongoing issues, which are believed to affect operations at all 1,049 of its UK locations. Following the revelation of the incident last week, the company’s stock has seen a nearly 7% decline.

According to BleepingComputer, Marks & Spencer is collaborating with CrowdStrike, Microsoft, and Fenix24 to investigate and mitigate the effects of the attack, particularly concerning disruptions in payments and order processing.

The hackers allegedly extracted the NTDS.dit file from Marks & Spencer’s Windows domain in February. This critical file serves as the central database for Windows Active Directory, storing domain information including user accounts, passwords, and security credentials. If compromised, it provides malicious actors with the means to extract sensitive credentials and jeopardize the entire network.

Sources informed BleepingComputer that the group utilized the “DragonForce” encryption method to lock files, rendering systems and data inaccessible until a ransom is settled, typically demanded in cryptocurrency in exchange for a decryption key.

It’s currently uncertain if Marks & Spencer is being held for ransom, but insiders indicated that any potential demand could be around £10 million. This is reportedly a common ransom target for well-known brands like Marks & Spencer.

Experts highlight that paying a ransom can present both immediate and ongoing complications for businesses. While it may facilitate a swift return to normal operations and safeguard customer information, there are substantial risks of encouraging criminal behavior and creating a pattern of targeting for the organization; plus, payment does not guarantee a successful decryption.

Law enforcement generally advises against meeting ransom demands, arguing that it supports the expanding ransomware market and erodes collective cybersecurity initiatives.

Marks & Spencer has reportedly instructed around 200 agency employees at its primary distribution hub to remain at home while pausing online orders, according to Sky News. These agency workers constitute approximately 20% of the workforce at the Castle Donington logistics center.

As of last Friday, Marks & Spencer suspended online orders, with customers using click-and-collect services advised to wait for notifications before heading to stores.

The retailer, which employs around 65,000 people, has temporarily restricted remote access to certain internal IT systems for staff.

While employees can still work remotely, access to critical internal systems has been limited as part of the incident response, sources reported.

Marks & Spencer is taking precautionary steps to protect its network and has reported the incident to relevant data protection authorities and the National Cyber Security Centre.

This cyber event poses a setback for Marks & Spencer, which has recently shown positive results from its turnaround strategy under CEO Stuart Machin, achieving growth in sales and pre-tax profits.

Marks & Spencer has chosen not to comment on the matter.

Insights into Scattered Spider

The group known as Scattered Spider, linked to the Marks & Spencer cyber incident, is a collective of hackers operating in the US and UK.

Active since at least May 2022, Scattered Spider, also referred to by names such as “Scatter Swine” and “Muddled Libra,” has been involved in various high-profile attacks against major corporations.

In September 2023, members of this group infiltrated the networks of casino giants Caesars Entertainment and MGM Resorts International, demanding substantial ransom payments. Caesars reportedly paid approximately $15 million to regain control of its systems.

Following this incident, Moody’s highlighted potential credit rating repercussions for MGM Resorts.

CEO Bill Hornbuckle disclosed that for nearly a week post-attack, MGM Resorts was largely uninformed about critical aspects of its operations.

Scattered Spider has employed multiple social engineering tactics to breach company systems, including “SIM swapping,” in which they convince mobile carriers to transfer a target’s number to a SIM card they control, thereby bypassing multi-factor authentication.

Members of this hacking syndicate have also been noted impersonating IT staff of a targeted organization to manipulate employees into granting access.

Upon gaining entry, the group typically deploys ransomware and threatens to leak internal data unless a significant ransom, normally paid in cryptocurrency, is remitted.

Toby Lewis, head of threat analysis at Darktrace, describes Scattered Spider as a collection of associates in the US and UK, akin to an online community.

Lewis contrasts their approach with other hacker groups, emphasizing Scattered Spider’s tendency to specifically target known brands, allowing for more meticulous planning of their attacks.

Last November, the US government brought criminal charges against five individuals purportedly linked to the group, who targeted at least 12 companies across sectors like gaming, telecommunications, and cryptocurrency, according to American authorities.

Four of those charged were from the US, while one was based in Scotland.

A: As an employer, it is your responsibility to ensure the well-being of your employees while they are at work. This includes considerations for various welfare aspects such as ventilation, temperature, lighting, cleanliness, flooring, safety routes, as well as sanitary and drinking facilities.

Legally, employers must provide adequate restrooms, washing areas, and other welfare facilities to create a healthy and safe work environment for all staff members. This entails having an appropriate number of toilets, sinks, drinking water, and areas where employees can rest and consume their meals.

A burst water pipe is typically beyond your control, and such situations can unfortunately arise. However, under health and safety regulations, employers are tasked with preparing for unforeseen circumstances, including adverse weather conditions. It’s not specified what led to the pipe bursting, but if it was due to weather factors, reflecting on potential preventative measures you could have taken might be beneficial.

When water service is disrupted at the workplace, the first course of action should be to identify nearby facilities where employees can access restrooms and washup stations safely. If such places are not available, consider renting temporary restroom facilities until the issue is resolved.

According to the Equality Act 2010, organizations must ensure that all employees have access to appropriate services, including restroom facilities, so it is crucial to provide accessible toilets.

Legally, you must supply employees with uncontaminated drinking water. As a temporary solution, providing bottled water dispensers is a valid option to ensure that employees have access to clean drinking water.

If neither alternative is viable, explore the possibility of relocating employees temporarily to another workspace. For instance, moving operations to another office branch could be effective.

Depending on your sector, allowing employees to work from home may also be suitable until normal conditions are reinstated. This option, however, may not be feasible for every business. It’s critical to communicate that this arrangement is temporary and that regular working operations will resume once water service is restored.

When employees work from a location other than the primary workplace, it’s essential to conduct a thorough assessment of the new working environment to identify potential hazards. This is applicable for home working scenarios as well. If employees will be working from home for an extended duration, periodic checks should ensure their work conditions meet legal standards.

Evaluate the employees’ workstation setups, including their chairs, desks, and keyboards, to confirm proper ergonomics. Encourage employees to fill out a display screen equipment self-assessment questionnaire to verify their workspaces are safe and suitable.

If home working isn’t feasible, negotiate a suitable approach with your staff, which may involve them taking annual leave or using previously accrued time off.

Should your employment agreements contain a clause permitting layoffs, you may need to implement this option. If no other solutions are available, employees are entitled to their full wages during the period you’re unable to provide work.

Peter Done, co-founder and managing director of a consultancy specializing in employment law, HR, and health and safety advice.