Recent annual financial statements from William Grant & Sons, a notable independent Scotch whisky manufacturer, reveal a pre-tax profit of £554 million for the 2023 calendar year, marking a rise from £397.6 million the prior year.

The family-run enterprise also announced dividend payments of £25 million for the 2023 fiscal year, an increase from £19.7 million.

Total revenue nearly reached £2 billion, up from £1.7 billion previously. The value of stock, which incorporates aging whisky, was recorded at £1.2 billion, a rise from £983 million.

Founded in 1887 by William Grant, a shoemaker and bookkeeper, the company began with the establishment of the Glenfiddich Distillery in Speyside, followed by the Balvenie distillery five years later.

Both brands remain integral to the company’s offerings, which also include Grant’s and Monkey Shoulder whiskies. The extensive beverage lineup features Drambuie liqueur, Tullamore Dew Irish whiskey, and Sailor Jerry rum. The workforce exceeds 2,800 individuals worldwide, with distribution in almost 200 countries. Glenn Gordon, who is 68 years old, serves as chairman and is the great-great-grandson of the founder.

The company attributed its 2023 results to effective measures taken despite challenging global market conditions, which included inflation costs, significant supply chain disruptions, and geopolitical factors.

Price adjustments were implemented by William Grant & Sons to mitigate the effects of increased manufacturing, distribution, energy, and labor expenses.

The financial reports indicate investments were made in brand development, property acquisitions, and the implementation of an enterprise resource planning software system.

In September 2023, the company acquired the English gin brand Silent Pool for £7.9 million, as noted in its accounts. Additionally, William Grant increased its stake in Canadian distributor Peter Mielzynski Agencies from 51% to 90% in a deal valued at over £10 million.

Soren Hagh, formerly leading Heineken’s European operations, took on the role of chief executive at William Grant at the beginning of last year.

“Although 2023 posed numerous challenges regarding supply chains and economic changes, we are proud of our progress across our well-respected brand portfolio and are eager to further strengthen our company to benefit our customers and consumers,” commented Hagh.

In September, William Grant also acquired Famous Grouse and Naked Malt whiskies from Edrington Group, with the financial details remaining undisclosed.

Around £25 and a few coins for parking is a must for me. I feel uneasy without cash, even if it’s just to pay the window cleaner, who is about the only one who still accepts it. I wish to use cash more often, but it seems no one else does either.

What credit cards do you use?

I charge everything to my credit card and pay it off monthly. I enjoy using a credit card because it earns points and allows me to collect John Lewis vouchers for Waitrose, making it feel like I’m getting money for free.

Are you a saver or a spender?

I lean towards being a “moderation in all things” type. I appreciate shopping, but my tastes are fairly modest. For example, I can’t fathom spending £1,000 on a handbag—it would make me uncomfortable. I can’t differentiate much between a £10 and a £20 bottle of wine, often opting for a £6 bottle of Lidl merlot. I’d splurge £20 on a special occasion. My most significant purchase was an additional £800 for premium economy seats on a round-the-world flight due to my bad back; the total for the trip was £5,000. First class is not for me; it seems unnecessary to pay extra when you’re just sleeping.

Do you own a property?

Yes, we own a 1930s semi-detached home in Bromley, which Peter and I purchased for £130,000 in 1993 after our wedding. He had owned a terraced house in Norwood prior to our marriage. I’m unsure what our house is worth now—perhaps around £800,000? We’ve extended it from three to four bedrooms. I’m fond of Bromley and feel at home in the suburbs.

Are you better off than your parents?

Yes, I am one of three siblings and spent my childhood in Croydon. My father, Colin, who passed away at 83, was an English teacher and an oddly frugal individual. Our home was relatively spacious, bought in partnership with my grandmother, who lived with us, not entirely harmoniously. It was freezing, prompting Dad to wear a Second World War flying suit—a thick sheepskin kind of onesie—indoors to stay warm. He also tried to make substitute coffee by drying carrots in the oven, but it only resulted in a burnt carrot flavor. My mother, Margaret, was resourceful and often purchased second-hand clothes; she passed away a couple of years ago at 91.

How much did you earn last year?

I made more than a train driver but less than a member of parliament.

What was your first job?

After university, I spent a year in New Zealand and then returned in 1990 to work as a secretary for the publishers Andre Deutsch. My starting salary was £7,000, which was quite low for publishing at that time, but it was an enjoyable workplace. I typed out author contracts, including the one for my first novel, Uncertain Terms, published in 1992, for which I received a £1,000 advance. I considered adding a couple of zeros to my contract figure! I was made redundant after five years.

When did you first feel wealthy?

That feeling struck when the royalties from Small Pleasures started coming in after 2020. I received a £10,000 advance, and for the first time, I lost track of how much I had in my account. To celebrate, my husband bought an expensive bottle of champagne, but when he opened it, it exploded and splattered the kitchen wall, leaving us only enough for a sip.

Have you ever worried about making ends meet?

Not truly, though when our children were younger, our budget was tight after paying bills and the mortgage—we often lived paycheck to paycheck.

What has been your most lucrative work?

Clearly, it has been Small Pleasures, which took three years to write. For a long time, I earned only £12,000 annually from a part-time administrative job at a local school, alongside my writing income, which hardly made me a significant taxpayer. The success of Small Pleasures eventually allowed me to earn a six-figure income for a couple of years post-release. After a decade-long hiatus from publishing, its unexpected success was a delightful surprise.

Do you invest in shares?

No, I don’t possess a great deal of confidence in investing.

What’s better for retirement — property or pension?

I’m unsure, but I dislike the idea of older individuals owning multiple properties while many young people struggle to afford even a one-bedroom flat. I believe I will qualify for a small work pension upon retirement from my part-time job, but I doubt it will even cover my utility bills.

What has been your most beneficial business decision?

Marrying my husband over thirty years ago, as he has held a steady job that has supported my writing career all these years. Though it was not my initial plan, that day turned out to be the best business decision of my life.

And your best investment?

Attending typing classes on a manual typewriter when I was a teenager—I can type quickly now, which has saved me countless hours throughout my life. I often see someone typing slowly and think they could have benefited from those evening classes.

What about your worst investment?

A £732 gas barbecue. Our weather does not lend itself to outdoor cooking, and cleaning it is such a hassle that we use it only once a year, generally resulting in soggy and disappointing burgers. It occupies space on the patio, and the last time we uncovered it, we found foxes nesting underneath. By my calculations, I’ve spent around £180 per use.

What’s your money weakness?

I tend to buy small souvenirs while traveling, but they are too nice to actually use. I have a drawer full of pristine notebooks, trinkets, and pins.

What’s your most extravagant purchase?

My husband and I splurged half of a £15,000 advance from one of my books to live luxuriously for a week in a villa in France overlooking the Mediterranean. It was a spectacular experience, albeit brief.

What’s your financial priority for the coming years?

Assisting my children in saving for their own flats. Our daughters live with us while saving, but if they cannot find a place soon, they may consider moving abroad. This situation shouldn’t exist—it’s entirely a result of ongoing government policies. The new government should prioritize a robust housing construction program.

What if you won the lottery?

I genuinely would prefer not to win because it seems it would bring more stress than joy. If I did win, I would certainly help my children financially and donate significantly to charities, particularly to alleviate the dire situation in Myanmar, where many face starvation and economic hardship. Nevertheless, I believe that winning the lottery would likely create far more anxiety than happiness.

What is the most important lesson you’ve learned about money?

I hold an irrational belief that the more you cling to your finances, the more likely you are to lose them. I know that if I pass by a Big Issue seller without purchasing a copy, it’s likely I’ll get a parking ticket shortly afterward.

Shy Creatures by Clare Chambers (Orion £20).

The company’s adjusted earnings for the three months ending September fell by only 3 percent compared to last year, totaling $6 billion, which is significantly higher than the $5.4 billion forecasted by financial analysts.

Although its refining sector faced challenges, increased liquefied natural gas sales helped counterbalance this weakness, along with lower costs mitigating the effects of declining crude prices on its upstream operations.

This latest share repurchase program marks the twelfth consecutive quarter in which Shell has committed to buying back at least $3 billion in shares, while also maintaining its quarterly dividend at $0.34 per share. Following this news, Shell’s stock increased by 88 pence, closing at £25.78, a 3.5 percent rise.

As Europe’s largest oil and gas firm, Shell is led by CEO Wael Sawan, who took on the role at the beginning of last year. The company, like many of its peers, has prioritized returning cash to shareholders in recent years.

In contrast, shares of competitor BP fell by 5 percent amid concerns regarding potential reductions in its buyback plans for the upcoming year.

RBC Capital Markets analysts have noted Shell’s distribution strategy appears more robust than that of its rivals, citing its strong financial position.

CEO Sawan emphasized Shell’s commitment to creating stability in shareholder distributions while enhancing its financial resilience within a challenging global economic landscape. The company successfully reduced its net debt to $35.2 billion, down from $38.3 billion in the previous quarter and $40.5 billion a year ago.

Sawan described this financial standing as the strongest since 2015.

The integrated gas division saw profits rise to nearly $2.9 billion from $2.5 billion year-on-year, while earnings from its oil and gas production segment improved to $2.4 billion from $2.2 billion. However, the chemicals and refining division reported a sharp decline in profits, down 68 percent to $463 million.

During the quarter, Shell faced challenges due to lower crude prices, with the Brent benchmark averaging $80.34 per barrel, down from $86.75 the previous year. Sawan acknowledged the unpredictable nature of oil pricing, attributing increased market volatility to ongoing conflicts in the Middle East.

Sawan stated, “Our focus remains on controllable factors to position ourselves effectively for the uncertain market.”

Shell’s financial results were released shortly after the UK government announced an increase in the windfall tax on North Sea oil and gas companies from 35 percent to 38 percent. Shell’s finance chief, Sinead Gorman, commented on the numerous fiscal policy changes in recent years, expressing a desire for greater certainty in policy.

Similar to other major companies listed in London, Shell’s market valuation has not kept pace with its competitors on Wall Street, leading to speculation about a potential shift in its stock listing to New York. Sawan remarked in May that while they continually review options regarding listing, there are no active discussions about relocating to the US at present.

He reiterated that the topic of a listing shift is not currently being actively debated within Shell and refrained from speculating on future triggers for change.

According to Sarah Friar, OpenAI’s chief financial officer, the San Francisco-based company will be “thoughtful about when and where we implement them” as discussions about an advertising strategy take place.

Since the launch of ChatGPT in 2022, OpenAI has become a pivotal player in the AI landscape, with the chatbot providing human-like responses for tasks such as composing poetry or preparing business presentations. Currently, it serves over 250 million users weekly.

In a separate statement, Friar mentioned, “Our current business is experiencing rapid growth, and we see significant opportunities within our existing business model. While we’re open to exploring other revenue streams in the future, we have no active plans to pursue advertising.”

The 51-year-old executive from Northern Ireland has held senior positions at Salesforce and Nextdoor, bringing valuable experience to her role.

In her interview with the Financial Times, Friar emphasized the extensive experience she and Kevin Weil, OpenAI’s chief product officer, possess, particularly as Weil has a background in developing ad-supported products for major tech firms like Instagram and X.

“The good news with Kevin Weil at the wheel with product is that he came from Instagram. He knows how this [introducing ads] works,” Friar stated.

OpenAI’s latest funding round valued the company at $157 billion, raising $6.6 billion from investors in one of the largest private funding efforts recorded.

This fundraising was notably led by Thrive Capital, alongside participation from significant investors such as Microsoft, Nvidia, SoftBank Vision Fund 2, Khosla Ventures, and Fidelity Management & Research Company.

OpenAI is actively seeking methods to enhance its revenue following its announcement to shift from its original non-profit foundation established in 2015 by prominent figures including Elon Musk to a for-profit approach.

One substantial source of revenue for OpenAI comes from its application programming interface (API), which enables businesses and developers to utilize its technology. However, the costs associated with building advanced AI models have resulted in heavy expenditures, leading the company to project a loss of $5 billion for this year.

Separately, Elon Musk has initiated legal action in federal court aiming to prevent the company from switching to a fully profit-driven operation.

An OpenAI spokesperson responded, stating, “Elon’s fourth attempt, which again recycles the same baseless complaints, continues to be utterly without merit.”

Boeing, which has a long history spanning 108 years in manufacturing aircraft, rockets, and missiles, has seen its market value plummet by over 50% in the last five years. Many critics argue that the issues haunting Boeing stem from decades of prioritizing financial strategies over core aerospace innovation.

This short-term profit mentality has reportedly led to insufficient focus on quality improvements and innovation, according to industry experts.

For instance, the latest equity raise has halted the decline in the number of Boeing shares, which had been reduced significantly due to substantial buyback programs executed between 2013 and 2019. During this period, Boeing repurchased more than $40 billion in shares, averaging around $172 each, which drastically increased its long-term debt from $10.7 billion in 2018 to $53.2 billion by the end of the most recent quarter. The current share issuance is priced at $143.

While shareholders benefited from substantial cash returns during those years, Boeing has faced various scandals, fatal incidents, and operational setbacks. Notable issues include a door panel detachment on a 737 Max in mid-flight in January, the mishap with its Starliner space capsule leaving astronauts stranded in June, and a halt in production by its largest union in September, compounding the financial challenges facing the company as debt levels approach junk rating.

Understanding Boeing’s Revenue Model

Currently, Boeing is not generating profits, having reported losses since 2018.

Boeing and Airbus, which are the dominant players in the commercial aircraft market, had Boeing earn $33.9 billion last year from commercial aircraft sales, alongside $24.9 billion from its defense, space, and security sector, and $19.1 billion from its services segment. However, both the commercial and defense segments are operating at a loss, highlighted by ongoing production difficulties.

A primary issue lies in Boeing’s inability to manufacture enough aircraft to cover its increasing fixed costs. Regulatory demands following quality issues have necessitated a slower production rate, further inhibiting the company’s cash flow.

In a significant labor dispute, 33,000 Boeing employees in Washington state went on strike in September after the rejection of a new contract by the union, effectively halting the production of key aircraft models like the 767 and 777, which has exacerbated sales challenges.

Boeing’s Financial Challenges

Boeing is experiencing substantial cash outflows and is facing difficulties meeting its debt obligations. In the last quarter, the company recorded a free cash outflow of $1.3 billion, leaving them with a gross cash reserve of $10.5 billion, just above the critical threshold of $10 billion needed for daily operations.

The major credit rating agencies, including S&P, Moody’s, and Fitch, categorize Boeing’s credit rating as one tier above junk status, indicating a heightened risk of default. Potential downgrades could trigger increased interest costs, estimated to rise by approximately $200 million, totaling around $2.9 billion annually.

Outlook for Boeing

Boeing claims to have a backlog exceeding 5,400 commercial aircraft orders, valued at over $500 billion. However, deliveries have been delayed due to several previous issues including the grounding of the 737 Max, the impact of the pandemic, and supplier delays.

This backlog provides some visibility toward revenue prospects equivalent to about six years of sales. Analysts project a potential recovery in earnings by 2027, forecasting earnings per share around $6.98, which would reflect levels similar to 2016. However, Boeing’s past struggles with meeting delivery timelines cast doubt on these optimistic forecasts.

The company may explore divestitures; reports suggest Boeing could be considering selling parts of its space division, with estimates of earning between $1.2 billion and $1.3 billion from potential sales connected to NASA ventures. This figure does not account for Boeing’s military space programs or its substantial joint ventures.

Analysts predict Boeing could face a staggering pre-tax loss of $9.2 billion by the end of the fiscal year. With ongoing complications surrounding the 737 Max and 787 aircraft, the likelihood of announcing new projects before 2025 appears slim.

Despite these challenges, the investment community maintains cautious optimism, with 53% of analysts rating Boeing shares as a buy, suggesting that the new equity offerings could enhance cash flow and improve supply chain dynamics in the future.

As Boeing progresses through an anticipated four to five-year order cycle, demand for its narrowbody planes remains solid. However, the risks associated with production timelines and competition with Airbus, coupled with the imperative of balancing its books, imply that refraining from investment in Boeing may be prudent at this juncture.

Advice: Avoid Investing. Reasons include a long and precarious recovery path ahead.

lauren.almeida@thetimes.co.uk

The London-listed company revealed that Deloitte is investigating the transactions in light of discussions with its auditor KPMG, a well-known Big Four accounting firm.

In its interim financial results released in August, the Aberdeen-based Wood recorded a $140 million write-down associated with its exit from large-scale engineering, procurement, and construction projects as part of a significant restructuring initiative.

This review aims to assess governance matters related to these decisions and determine whether any previously reported financial outcomes need to be amended. It will also investigate the status of contracts within the projects division, along with accounting practices and controls.

Ken Gilmartin, the chief executive officer of the group, stated that an update on the review process would be shared once it is completed, although no specific timeline was provided.

Earlier this year, Wood attracted acquisition interest from Sidara, a Dubai-based engineering consultancy, which valued the company at $1.6 billion but eventually retracted after conducting due diligence.

This marked the second consecutive year that Wood garnered interest, following Apollo, a private equity firm from the United States, which also withdrew from bidding despite previously valuing the company at $2.2 billion.

The substantial drop in share price saw the value plummet by 74p, resulting in a closing price of 49p and leaving the company with a market capitalization of £343 million.

This announcement coincided with the release of third-quarter results highlighting a decline in the company’s order book value from $6.1 billion in June to $5.4 billion by the end of September. This decrease was attributed to the timing of certain projects as well as challenges within the projects division, particularly in the minerals, chemicals, and life sciences sectors.

Gilmartin expressed optimism for an improved order book in the fourth quarter, noting, “We continue to secure outstanding, highly complex engineering and delivery work across our sectors.” 

The company’s revenue for the third quarter showed a slight increase of 1% year-on-year, approaching $1.49 billion. For the first three quarters of 2024, Wood reported a 3% decline in revenue, totaling $4.3 billion, reflecting weaker results from the projects sector.

Adjusted earnings before interest, tax, depreciation, and amortization rose by 4% year-on-year for the period from January to September.

Gilmartin indicated that the company’s outlook for the year remains stable, projecting high single-digit growth in underlying profit while net debt levels are expected to remain flat following disposals.

Analysts at Morgan Stanley and Jefferies noted that while the company had previously anticipated generating substantial free cash flow in 2025, that forecast has been moderated according to its trading update.

Gilmartin acknowledged awareness of the challenges in the projects division but expressed confidence in the group’s improving cash trajectory. Further insights regarding cash generation are expected during Wood’s annual results announcement.

Wood employs over 36,000 individuals globally, engaging in engineering and operational activities across various sectors, including energy, minerals, net zero initiatives, and chemicals.

Despite his criticisms, Lansdown acknowledged that the offer is “fair” and anticipates that taking the company private will allow it to concentrate on growth away from market scrutiny.

Lansdown’s remarks come during a time of speculative discussion regarding potential competitive offers for the firm. The proposed deal is set to be voted on by shareholders this autumn, with some analysts arguing the valuation may be too low.

On August 9, the Hargreaves Lansdown board endorsed the private equity consortium’s offer, which includes CVC, Nordic Capital, and the Abu Dhabi Investment Authority, after initially dismissing their earlier proposals.

As a result of his acceptance of the deal regarding his remaining 5.7% stake in the company, Lansdown stands to gain £309 million.

Lansdown stated to The Times, “I think the board did the right thing in rejecting it initially. They got the price up. Whether that price is the right price is questionable but it’s a fair price compared to what it was.”

The final bid represents a 54% increase over Hargreaves Lansdown’s share price before the consortium’s first approach in April, aiming to provide shareholders with “an immediate and certain” value for their assets, according to the company.

“For me, personally, it’s a good time to step back considering my other commitments,” said Lansdown, who is also involved in running Bristol City Football Club, indicating intentions to sell his stake there as well.

He remarked, “While this isn’t the best deal out there, it allows the company to enter a new chapter of growth and development.”

Lansdown further noted, “The acquisition is expected to bring stability, allowing the company freedom from the pressures of being publicly traded, giving it the ability to make strategic decisions without constant public accountability.”

Although several major shareholders, including Lansdown, have committed to accepting the offer, these agreements could change if a competing bid arises that the board finds compelling.

The agreement will proceed through a court-approved scheme of arrangement, with initial documentation expected by September 9. Following that, it will require a shareholder vote, approval from the Financial Conduct Authority, and court validation.

Lansdown summarized his feelings about the deal: “Overall, I’m satisfied. Am I exceptionally happy? Probably not. But it’s beneficial for the company.”

As the largest DIY investment platform in the UK, Hargreaves Lansdown boasts 1.88 million active customers, far outpacing competitors like A J Bell and Abrdn’s Interactive Investor. The company reported a slight decline in pre-tax profits, totaling £396.3 million for the fiscal year ending in June.

Reflecting on his departure from the business in 2012, Lansdown expressed disappointment with the company’s recent trajectory. “It’s undeniable that in the last five or ten years, the company has struggled, growing only at a minimal rate,” he stated.

Lansdown continued, “The board made some subpar decisions, and there has been a change in leadership which we believe is positive, especially with the departure of former chair Deanna Oppenheimer and CEO Chris Hill.”

After an extensive tenure, he admitted to feeling emotional about relinquishing his final stake in the company, saying, “It’s been a part of my life for a long time. I’ve dedicated significant effort, and there are many friends within the company. Naturally, it’s tough to let go.”

On the stock market, Hargreaves Lansdown shares closed unchanged on Tuesday at £11.02, just below the proposed bid price, indicating market skepticism regarding potential rival offers. Analysts from Jefferies, Investec, and Shore Capital have suggested that the current bid fails to accurately reflect the company’s true value.

When asked if he still intends to sell Bristol City, Lansdown replied, “Yes, we are. It’s similar to Hargreaves Lansdown—help is needed to ensure the business thrives. I recognize that I’m not getting any younger, and further investment is necessary.”

Hargreaves Lansdown has opted not to comment further at this time.

Laura Shoaf, formerly the transport director for the West Midlands, was brought in last autumn to chair the Shadow Great British Railways, which will serve as a precursor to the organization aimed at leading the newly renationalised railway sector.

Her role involves uniting three prominent figures in the rail industry to facilitate the creation of Great British Railways.

During a session with the House of Commons transport select committee, Shoaf acknowledged that her weekly discussions with Sir Andrew Haines, Robin Gisby, and Alex Hynes aimed at improving collaboration between track infrastructure and train operators had been both “challenging” and “robust.”

Haines, 60, is the chief executive of Network Rail, while Gisby, 68, leads the re-nationalised train operators, including LNER. Hynes, 47, who previously served as managing director of Scotland’s Railway, is now the director-general of rail services at the Department for Transport. Shoaf, 53, hails from the United States and is currently the chief executive of the West Midlands Combined Authority, overseeing the Greater Birmingham area.

Labour MP Laurence Turner raised questions during the hearing about the accountability of the Shadow Great British Railways, specifically whether meeting records were being maintained to assess the organization’s initial objectives as compared to its performance over time.

Shoaf responded, stating, “At the moment we do not keep detailed records of our meetings. As you might imagine, the meetings are challenging, and I want to maintain an environment that fosters open discussion.”

She elaborated that these gatherings are essential for transforming the mindsets, cultures, and behaviors in a currently fragmented railway system, which has resulted in substantial debates.

Turner remarked, “Given the significance of this policy, I am somewhat taken aback to learn that records are not being maintained.”

After the hearing, Turner expressed his support for the formation of Great British Railways but emphasized the necessity for adequate resources and the importance of maintaining clear records, even in the early phases of the shadow organization. “This represents the most significant overhaul of the railways in over thirty years, and we must ensure it is executed properly,” he stated.

He noted, “While some discussions may always remain sensitive, the need for privacy must be balanced with robust parliamentary scrutiny and the establishment of a clear historical record.”

A representative from the Department for Transport commented, “Records of meetings involving Laura Shoaf, Andrew Haines, Alex Hynes, and Robin Gisby at Shadow GBR are summarized through high-level notes, in accordance with standard practices. Once Great British Railways is operational, transparency arrangements akin to those of other public bodies are to be expected.”

It is understood that “high-level notes” refers to brief summaries of the discussions.

Fortunately, the country did not experience any major electricity outages, but this situation has ignited fresh discussions about energy supply and sustainability.

In January, the National System Energy Operator (NESO) issued a “capacity market notice”, indicating a possibility of insufficient electricity generation to meet anticipated demand. In response, the market adapted by bringing additional generation online, albeit at prices that could reach up to 50 times the normal wholesale rates, primarily relying on imported gas. This reliance on gas emphasizes the urgent need to shift towards cleaner energy sources to combat climate change.

This winter marked the third notice from NESO, driven by unusually cold weather coupled with “dunkelflaute”—a condition characterized by very low wind and minimal sunlight, leading to increased demand amid low supply.

Despite these challenges, the UK’s renewable energy sector is thriving, and I am proud to contribute to it as the founder of Solarventus, which operates over 100 wind turbines, and Xlinks, the company spearheading a project to deliver solar energy from Morocco to the UK via an undersea cable.

Last year was unprecedented for green energy production, with renewables accounting for 58% of the UK’s total energy consumption. Wind energy emerged as the leading contributor, representing 30% of the energy mix, surpassing gas at 26.3%.

This positive trend is expected to persist, bolstered by a significant decline in the costs associated with renewable technologies over the past decade. Had we intensified our investments in renewable energy development and infrastructure in recent years, we could have reduced not just energy expenses but also the cost of everyday living.

The pressing challenge ahead is to establish a reliable supply of energy. Government initiatives are underway, guided by the prime minister’s commitment to cut carbon emissions by 81% by 2035, with Energy Secretary Ed Miliband leading the charge. However, accelerated efforts will be essential.

Having phased out coal and dramatically decreased carbon intensity, the UK’s renewable sector is flourishing, providing approximately 280,000 jobs and attracting significant investment. Companies like Octopus Energy, an investor in Xlinks, and projects such as the Dogger Bank wind farm—the largest offshore wind facility in the world, being constructed 80 miles off East Yorkshire’s coast—illustrate this growth.

The National Grid’s efforts on the North Sea Link, recognized as the world’s longest subsea interconnector between the UK and Norway, have been vital for optimizing energy storage. This project allows surplus electricity from the UK to be stored during windy periods and redistributed during calmer times.

Interconnectors enhance energy flexibility by enabling power transfer between neighboring countries, ensuring that excess electricity can flow where it is needed most. Currently, seven interconnectors serve the UK.

This growing network is paving the way for a global energy grid, enhancing economic opportunities in one country while diversifying energy sources in another.

Xlinks’ ambitious project for Morocco to the UK is set to utilize long-distance connectors, aiming for operational status by the early 2030s. It promises to power seven million homes, contribute an additional 10% reduction in carbon emissions, and help stabilize energy wholesale prices in the UK.

Furthermore, it will create substantial economic prospects for Morocco, generating tens of thousands of jobs and driving industrial growth through localized sourcing efforts. Critically, it will provide consistent electricity supply during peak demand hours, akin to nuclear power, but at significantly lower costs.

This initiative will be predominantly financed by private investors, requiring minimal government support aside from pricing assurances. The project encompasses solar, wind, and battery capabilities in Morocco, building upon a trading relationship that spans two centuries between the two nations, linked by approximately 2,500 miles of high-voltage direct current (HVDC) cables.

Launching such a project comes with significant hurdles. Initially, our venture faced challenges in securing proper funding; we found ourselves too large for venture capital yet too nascent for lower-risk infrastructure funds, confronting what is often termed the “valley of death,” a common pitfall for emerging startups.

Ultimately, we shifted our focus to strategic investors, including energy companies like Octopus, Total, and Taqa, the Abu Dhabi National Energy Company, as well as equipment suppliers such as GE Vernova, who possess the vision and capacity to invest at our early development stage.

However, we discovered that being based in the UK posed challenges in attracting funding compared to analogous companies in the US, where risk tolerance is considerably higher during the early stages of development.

Reflecting back, I ponder how we could have expedited our emergence from that challenging phase. What’s important is that we persevered and now, with momentum on our side and significant project development underway, we are on track to secure the approximately £20 billion needed for construction. In fact, investment banks are approaching us with unsolicited offers to underwrite the full amount, highlighting the importance of understanding your target investors at every growth stage.

Concurrently, our operational partner, XLCC, is constructing the world’s largest HVDC factory in Scotland, aimed at producing the cables we require and addressing global shortages. This infrastructure will allow the UK to gain greater control over the renewable supply chain while also capitalizing on the associated economic benefits. It is heartening to witness the UK, a nation with a longstanding tradition of industrial innovation, continuing to rise to energy demands.

Simon Morrish is the founder and chief executive of Xlinks as well as the chief executive and majority owner of Ground Control, located in Billericay, Essex.