News in Brief: EU exit, sugar tax, Prudential fund manager, Dyson sales, factory output falls

News in Brief

Founder of FTSE 100 broker backs EU exit

The "unknown" of leaving the EU could help stimulate Britain, according to Hargreaves Lansdown co-founder Peter Hargreaves, who backs the UK's withdrawal from the union.

He told the Today programme a fresh start could help Britain innovate, reported the BBC.

Demand for UK fashion and cars, as well as the attractiveness of the UK as a market for the EU, would ensure good trade deals, he said.

The Stronger In campaign said the EU supported jobs, growth and low prices.

Hargreaves founded stockbroker Hargreaves Lansdown in 1981 with business partner Stephen Lansdown.

He stepped down from the board of the company in 2015, but still owns a stake of more than 30%, worth just under £2bn.

Drinks makers consider legal action against sugar tax

Soft drink makers are considering taking legal action against the government over its controversial sugar tax as George Osborne’s budget shows further signs of unwinding.

Suing the government is one option that companies are considering as they await more details on the tax, which will come into force in 2018 and cost £1bn to implement, almost double the amount that it is expected to raise.

The cost of the sugar tax has been revealed in documents published by the Office for Budget Responsibility alongside the budget, reported the Guardian. The extra cost will come from a predicted rise in accrued interest that the government will have to pay on debt that is linked to the rate of inflation.

The new tax will add 24p a litre to soft drinks with the highest sugar content, a cost that could be passed on to shoppers through higher prices, meaning inflation would rise.

The chancellor has predicted the tax will raise £520m in its first year, far less than the cost of introducing the levy.

Top-paid mutual fund manager set for major fall in remuneration

One of Britain’s best-paid fund managers is facing a drastic pay cut after investors pulled billions out of his flagging funds last year.

Richard Woolnough, fund manager at Prudential’s M&G, saw a 37% fall in the size of his flagship 'Optimal Income' bond fund in 2015 – a slump will hit his pay when the figure is revealed at the end of March 2016.

Woolnough’s pay has been closely watched since it emerged he earned more than Prudential’s then-chief executive Tidjane Thiam in 2013, picking up £17.5m. In 2015 his payout was £15.4m, making him Prudential’s top earner and one of the City’s best-paid figures, reported the Independent.

Fund managers earn money from management fees based on the size of pot they look after, plus performance fees if they hit certain targets. Woolnough’s Optimal Income fund shed £9bn last year to £15bn from £24bn, meaning that management fees are likely to see a similar fall.

Performance related-fees, which impact Woolnough’s pay to a larger degree, are also likely to lag after the fund lost 1.1% over the past 12 months, according to Trustnet. Prudential declined to  comment.

The FTSE 100 giant is forced to disclose the figures in line with stock-market rules in Hong Kong, where it has a  secondary listing. The rules force companies to inform investors of the five highest-paid employees.

Dyson is taking wind out of rivals’ sales

Dyson has continued to take market share from rivals across the globe after recording a 19% rise in profits in 2015 to £448m.

The technology company, which is known for its bagless vacuum cleaner, said that its turnover has leapt by 26% to £1.7bn, led by global demand for its technology.

Much of its pick-up in performance last year came in Asia where its purifiers and humidifiers sold particularly well, reported The Times. Dyson said that revenue from its business in China had soared by 222% in 2015 and that after only three years on the mainland, it “already leads in floorcare and humidifiers”.

Revenue in Japan, Korea and Taiwan rose by 48%, 185% and 33% respectively, revealing how Asia is fast becoming the growth engine for the British company.

CBI: UK factory output falls at fastest rate since 2009

Manufacturing output fell sharply over the past three months, but demand remains solid, according to survey data.

Of the 471 manufacturers surveyed by the Confederation of British Industry (CBI), 18% said output had gone up over the last three months compared with 33% that reported a fall. The difference, or balance, of minus 15%, is the lowest since September 2009, reported City A.M.

However, demand is robust with the headline total order book balance rising to minus 14% in March 2016 from minus 17% in the previous month.

Manufacturers are more optimistic about production over the next three months. The expected volume of output balance rose to a score of 23% from February’s 11%.

Rain Newton-Smith, CBI director of economics, said: “March has been a mixed month for the UK’s manufacturers. Whilst total order and export books remained steady, a drop in output reflected some volatility in the food and drink sector. Reassuringly, manufacturers expect a swift turnaround in activity.”

He added: “While the Budget included several policies that should drive growth, the absence of further measures to support innovation, and research and development, was a missed opportunity to boost investment. The Government’s upcoming National Innovation Plan needs to address this vital issue.”