Virgin Group is a shared umbrella for a network of around 60 different businesses, offering a bewildering variety of services. The best known are probably the Virgin Atlantic airline and UK cable provider Virgin Media. Other companies are involved in areas such as telecoms (Virgin Mobile), financial services (Virgin Money), rail travel (Virgin Trains) and fitness (Virgin Active). None of them is wholly owned, and in several, despite the brand name, the Virgin Group doesn't have management control or even a shareholding, merely a licensing agreement. Yet even in virtual retirement figurehead Sir Richard Branson remains without question the UK's best-known business figure. He has 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 grows older, though, he has become less promiscuous with his investments, reducing his portfolio to a smaller collection of more viable businesses, and he more or less retired from active involvement in the group in 2012.
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Virgin Group website
|Virgin Atlantic||Virgin Media|
|Virgin Money||Virgin Active|
|Virgin Trains||Virgin Wines|
|Virgin Mobile||Virgin Publishing|
Recent stories from Adbrands Weekly Update:
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.
Adbrands Weekly Update 6th Nov 2014: Virgin Group faces a daunting challenge to its much-hyped but long-delayed bid to launch commercial space travel for paying customers, following the mid-air break-up of its latest test flight. That accident claimed the life of one test pilot and seriously injured another. Though the company is so far vowing to press ahead with the project, the disaster has heightened scrutiny of Virgin Galactic's approach to safety procedures, raising fears that these might share some of the general informality of the wider Virgin Group's corporate culture. Newspaper coverage over the weekend suggested that the group had previously received but disregarded warnings from the main space safety industry regulator over its volatile fuel system, though those claims were denied by Virgin. An initial survey into the crash by the National Transportation Safety Board appeared to suggest that pilot error may have caused or contributed to the break-up of the aircraft. However, that possibility will do little to ease the growing concerns of celebrity passengers who had been expecting to take their debut space flight in just a few months time. The group confirmed it has received a "handful" of cancellations. The tragedy is likely to push back Virgin Galactic's maiden commercial flight by at least another several years, if not indefinitely. That will raise serious funding issues since the business is already thought to have exhausted the initial capital investment provided by equity partner Aabar of Abu Dhabi, and is now being funded entirely from within Virgin Group. As a result, Virgin is to press ahead with the previously postponed IPO of Virgin Money this month, and also announced an IPO of its US regional airline Virgin America before the end of the year. Another concern is the damage that any further bad news from Virgin Galactic would inflict on all the multiple other businesses not directly controlled by Richard Branson who currently pay him royalties to license the Virgin name.
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