Virgin Group was, at its peak, a shared umbrella for a network of around 60 different businesses, offering a bewildering variety of different services. The best known still in operation in 2020 are probably the Virgin Atlantic airline and UK cable provider Virgin Media. Other companies are or were involved in areas such as telecoms (Virgin Mobile), financial services (Virgin Money), fitness (Virgin Active) and, until the end of 2019, rail travel (Virgin Trains). However, none of these is wholly owned or managed by Virgin Group, and in most cases, Virgin doesn't even have a shareholding, merely a licensing agreement whereby it receives a sizeable royalty for use of the brand name. Yet even in retirement, figurehead Sir Richard Branson - who turns 70 in 2020 - remains without question the UK's best-known business figure. He built his empire on a series of extraordinarily risky gambles which few would be wise to emulate. At the same time, the scale of each new gamble became bigger and bigger. In 2006, Branson secured a controlling minority shareholding in the UK's only significant cable TV network and attempted to use that as the platform to take over the commercial broadcaster ITV. That strategy failed. However the following year, he made a similar attempt to reverse his financial services unit Virgin Money into the struggling mortgage bank Northern Rock some ten times its size. That bid also appeared to have failed, but only at first. Branson eventually achieved his goal in 2011, when Northern Rock was again put up for sale by the government. As he grew older, though, he became less promiscuous with his investments, reducing his portfolio to a much smaller collection of more viable businesses, and he more or less retired from active involvement in the group in 2012. Of the bigger remaining businesses still under his whole or partial control, Virgin Active was sold to South African investor Christo Wiese in 2015, Virgin Money UK was sold to CYBG in 2018 and Virgin Trains lost its operating license in 2019. There are still small Virgin Money operations in Australia and South Africa, and various travel and hospitality operations, all quite small. The group is also a venture capital investor in non-Virgin businesses. Virgin Group has for years zealously hidden all its financial details in a maze of different holding companies. It currently claims, without any substantiation, annual revenues of £16.6bn, but this is, if anything, merely the gross total of all companies that carry the Virgin name. The group's actual revenues from licensing and its few remaining directly controlled operations are unknown, but are very much smaller, perhaps now in the tens of millions annually. The business is run by CEO Josh Bayliss and chairman Peter Norris.
Capsule checked 15th March 2020
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Adbrands Daily Update 10th Apr 2019: Virgin Trains will lose its remaining UK rail franchise as a result of a row over pensions between the government and Virgin's operations partner Stagecoach. Virgin Trains' franchise for the west coast rail line is set to expire in a year's time, but Stagecoach has been barred from taking part in this or any other franchise bid because of its refusal to contribute to a substantial deficit in the national railways pension scheme. The disqualification was disclosed to the media by Sir Richard Branson in an attempt to put pressure on the government to overturn its decision. [Updated: ...Without success. Virgin Trains shut down on 8th Dec 2019.]
Adbrands Weekly Update 21st Jun 2018: Richard Branson has added to his pension pot yet again with a deal to sell control of Virgin Money to challenger rival CYBG in an all-share deal worth around £1.7bn. The merger of Virgin Money with CYBG's Yorkshire and Clydesdale banking brands will create the UK's 6th biggest banking group, though still far behind the big five. The 180-year-old Clydesdale brand will be phased out in favour of an expanded Virgin Money branch network. CYBG boss David Duffy will continue to lead the merged entity; Virgin Money chief executive Jayne-Anne Ghadia will step down, though she will retain a short-term consultancy contract. Controversially, the merger is expected to cause the loss of 1,500 jobs, at the same time that the royalty paid to Branson's Virgin Enterprises holding company for use of the name will rise from £8m per annum currently to £12m a year until 2023 and then £15m. As The Guardian newspaper commented, "It is depressing that, even in an age of supposed technological revolution, CYBG feels the need to write a fat cheque every year to the bearded one in order to get noticed."
Adbrands Weekly Update 10th May 2018: Mid-sized UK financial service group CYBG, owner of Clydesdale Bank and Yorkshire Bank, made a preliminary all-stock approach for rival Virgin Money at a valuation of around £1.6bn. A combination of the two would, said CYBG, create the UK's leading challenger bank, with around 6m customers and 240 branches. That would place it 6th in size between the main high street lenders of Lloyds, RBS, Barclays, HSBC and Santander. If a deal were to proceed, Virgin Group would retain a large minority holding in the merged entity.
Adbrands Weekly Update 23rd Apr 2015: Virgin Group and its private equity partner CVC agreed to sell control of the Virgin Active health clubs business to South African investor Christo Wiese. His Brait SE investment umbrella will acquire almost 80% of Virgin Active for £682m. CVC is cashing out altogether, while Virgin will be reduced to 20%. Management retain a small stake. Virgin Active claims to be the biggest gym chain by far in South Africa, as well as the local leader by revenues in the UK and Italy. It has 1.3m members worldwide, through 267 clubs in nine countries.
Adbrands Weekly Update 20th Nov 2014: Richard Branson raised a significant amount of capital through the IPO of the Virgin America low-cost airline and UK lender Virgin Money. It's thought that a sizeable amount of the new cash will be earmarked for investment into Virgin Galactic, which is continuing to burn cash in the wake of its recent test flight crash. Virgin Group reduced its stake in Virgin Money to around 34%, raising around £70m in cash. It's not clear how much of the group's stake in Virgin America was sold, but its $360m IPO was the second-largest by any US airline, and shares soared by over 50% in initial trading. Virgin Money was rather less stellar, with its shares trading slightly below their offer price.
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