Starbucks profits surge with expansion into new markets

Noirescent/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 30 June 2017) London, Uk – –

Profits rose by nearly 75pc in Starbucks’s European, Middle Eastern and African division last year as the coffee giant continued its expansion into new markets.

The unit opened branches in South Africa and Slovenia in the last financial year as it boosted its Emea store count to more than 2,600.

The surge came despite a 60pc fall in profits in the UK, the arm’s largest market, where it said earlier this year that Brexit and weaker consumer confidence had weighed on sales.

On a statutory level, the division posted pre-tax profits of $219m (£169m) in the year to October 2, down from $682m in the previous year. However, the sharp drop follows an internal reallocation of company funds in 2015 following the relocation of its European headquarters to the UK.

Operating profit rose to $56.5m from $24m, though, with Emea president Martin Brok saying growth has been driven by “expansion into new markets and focus on decreasing costs”.

Starbucks enjoyed particular success in Turkey, and opened its first stores in South Africa and Slovenia last year, while it also has plans to launch in Italy.

The company, which faced criticism in 2012 over the amount of tax it was paying in the UK, added that it shelled out nearly $22m in corporation tax last year from the Emea unit, an increase of 44pc.

“These results demonstrate the work we have undertaken to bring our company structure in line with the way we run our business today and enhance transparency,” Mr Brok said.

“The growth we experienced during the period has been driven by expansion into new markets and focus on decreasing costs as we continue to invest in growing our presence across the region.”

By Grace Palmer Sam Dean

Lloyds Bank to stop trading Qatari Riyals

Elliott Brown/Flickr.com

(qlmbusinessnews.com via uk.reuters.com — Fri, 30 June 2017) London, UK —

Britain’s Lloyds Banking Group (LLOY.L) said on Friday that it has stopped trading Qatari Riyals and that the currency is no longer available for sale or buy-back at its high-street banks.

A spokeswoman for the bank said a “third-party supplier” that fulfils its foreign exchange service had ceased trading in the currency from June 21.

“This currency is no longer available for sale or buy-back across our high street banks including Lloyds Bank, Bank of Scotland and Halifax,” the spokeswoman said.

By Andrew MacAskill

Uk Mortgage approval rate hits highest level since March 2016

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(qlmbusinessnews.com via ibtimes.co.uk – – Thu, 29 June 2017) London, Uk – –

Bank of England data shows mortgage approval rate hits highest level since March 2016 last month.

Britain’s mortgage lending and consumer borrowing accelerated past expectations last month, allaying fears consumers could be reining in spending as a result of the pay squeeze.

According to the Bank of England (BoE), the number of loans approved by banks and building societies edged slightly higher from April’s 65,051 to 65,202 last month, ahead of forecasts for a reading in the 64,000 region.

Net mortgage lending, meanwhile, recorded its largest increase since March 2016, rising by £3.53bn ($4.58bn) last month.

The figures come just a day after Nationwide reported the first increase in house prices in three months.

Meanwhile, consumer credit rose by £1.7bn, ahead of expectations for a slowdown to £1.4bn and higher than the £1.52bn figure recorded in April.

Growth in unsecured consumer borrowing rose 10.2% year-on-year in the three months to May, higher than from April’s 9.7% and the joint-highest reading since November.

While the unexpectedly positive data will prompt speculation the economic slowdown experienced in the first quarter might be a thing of the past, it also means households feeling the squeeze are dipping into their saving to continue spending.

“May’s UK money and credit figures provide another reason to think that the consumer slowdown shouldn’t be too severe,” said Ruth Gregory, UK economist at Capital Economics.

“This suggests that households remain confident enough to increase borrowing to help smooth consumption, in the face of the squeeze on their real incomes.

“Of course, this will do nothing to allay policymakers concerns about the recent rapid increases in unsecured lending and strengthens the case for the Financial Policy Committee to act to address this issue at its next meeting in September.”

Earlier this week, BoE Governor Mark Carney warned that consumer borrowing was rising at a much quicker rate than incomes, adding banks had loosened credit standards due to “intense competition”.

On Wednesday (28 June), Carney added over the coming months the Bank will begin discussing when to start raising interest rates, which have been at a historic low of 0.25% since August last year.

The BoE chief economist Andy Haldane hinted he might back a rate hike later this year, while deputy governor Sir Jon Cunliffe warned the bank would make mistake if it raised rates now.

“We do have to look at what’s happening to domestic inflation pressure, and I think that, on the data we have at the moment, gives us a bit of time to see how this evolves,” he said.

By Dan Cancian

Smartphones supersede branches as almost 20m Britons log onto banking apps

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 29 June 2017) London, Uk – –

Almost 20m Britons banked on smartphone apps last year as mobile transactions surged by 57pc, according to fresh data that underscores the technology revolution that has driven the decline in the traditional bank branch.

Some 38pc of the adult UK population used a banking app in 2016 as the number of people turning to their smartphones to manage their personal finances climbed by 11pc on the year to more than 19.6m, a report by the British Bankers’ Association (BBA) and accountancy giant EY has found.

The number of app transactions leapt by 57pc to 932m, equating to 30 each second, the BBA and EY said. Apps were mainly used to check account balances, but were also increasingly used to check statement entries, transfer money between accounts and pay bills

The report has been released on the eve of the disappearance of the 98-year-old BBA, which is becoming part of a new, bigger financial lobbying group called UK Finance.

The BBA — which was hit by the Libor rigging scandal because it was responsible for administering the benchmark rate — is coming together with the Council of Mortgage Lenders, UK Cards Association, Financial Fraud Action UK, Asset Based Finance Association, and Payments UK to form the new association.

The growing popularity of smartphone apps and online banking generally has transformed the personal finance landscape in the UK, forcing lenders to shake-up their business models.

Britain’s biggest banks have closed thousands of branches across the country in recent years to cope with falling footfall as more of their customers choose to bank over the internet.

“Customers’ appetite for using technology to manage their money on the move is showing no signs of abating, with banking apps now the principal means by which we access our current accounts,” said Eric Leenders, the BBA’s retail and commercial banking managing director.

“And this doesn’t appear to be a fad with more and more people moving beyond payments, increasingly using apps to access a broader range of banking services, such as savings, credit cards, mortgage and investment accounts.”

By Ben Martin

Tesco head office to cut 1,200 jobs

(qlmbusinessnews.com via theguardian.com – – Wed,28 June, 2017) London, Uk – –

Supermarket’s move comes just a week after it said it would axe 1,100 roles at a call centre in Cardiff

Tesco is to cut 1,200 jobs at its head office, just a week after saying that 1,100 jobs would be axed as it shut a call centre, as chief executive Dave Lewis presses on with a major cost-cutting drive.

The UK’s largest supermarket chain told staff of the cuts on Wednesday morning, with 25% of staff at offices in Welwyn Garden City and Hatfield facing the axe, according to the Press Association.

A Tesco spokesperson confirmed the job losses but did not reveal how many positions were under threat.

The supermarket is expected to issue a full statement shortly confirming its plans.

It comes just a week after Tesco said it would close a call centre in Cardiff, putting 1,100 jobs at risk.

The supermarket chain said that in February it planned to close one of its two call centres which handle customer emails, social media inquiries and phone calls.

About 250 jobs will be created in the group’s other call centre, in Dundee, which will handle all customer queries. Workers from Cardiff will be offered work there but few are expected to move.

By Rob Davies

Co-operative Bank poised to unveil £700m rescue deal

 

Howard Lake/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Wed, 28 June 2017) London, Uk – –

Co-operative Bank is poised to unveil a £700m rescue deal with its US hedge fund owners that will avert a collapse of the loss-making lender.

It is understood that the bank could announce as early as tomorrow that it has secured financing through a debt-for-equity swap and an injection of new equity by the hedge funds.

It would draw a line under months of speculation about Co-op Bank’s future that had sparked concerns the Bank of England might be forced to step in and wind-up the troubled business.

The lender, which has about 4m customers, lost £477m in 2016 in what was its fifth consecutive year in the red and warned in February that its deteriorating capital position had forced it to put itself up for sale.

However, as well as looking for a buyer, it has also been working on an alternative rescue with its existing investors.

Earlier this week, it dropped the sale plans in favour of a pursuing a deal with the hedge funds, including Blue Mountain Capital Management and GoldenTree Asset Management, which already own bonds and shares in the business.

In 2013, the hedge funds stepped in to bailout the lender after it discovered a £1.5bn black hole in its finances. It is unclear which funds are taking part in the fresh rescue this week.

While a deal could be unveiled tomorrow, a source cautioned that an announcement could be delayed.

Co-op Bank directors were said to be meeting tonight to hammer out the final terms of the rescue, which is likely to see the Co-operative Group’s stake in the lender shrink from 20pc to a negligible level.

A key sticking point in rescue negotiations have been separating the bank from the wider Co-operative Group pension scheme, which has about 90,000 members.

The bank also moved to reassure customers earlier this week that a deal with the hedge funds would “safeguard” its values and ethics.

Co-op Bank stands apart from its high-street rivals because its lending is governed by a strict ethical policy which forbids it from providing financial services for activities that include animal testing of cosmetics.

The policy is seen as central to the bank’s appeal to many of its customers, who have stayed loyal to the business through years of financial difficulty and a 2013 sex and drugs scandal involving its former chairman.

A Co-op Bank spokesman declined to comment on the potential deal, which was first reported by Sky News.

By Ben Martin

Google fined a record €2.42bn EU for abusing internet search monopoly

 

EU competition chiefs have today fined internet giant Google a record 2.42 billion euros.

It is for allegedly abusing its dominant position to manipulate search engine results for its own benefit.

The European Commission claims the company used its search engine’s dominance to favour results from its own Google Shopping service, above other price comparators.

Google said in a statement it disagrees with the EU and is considering an appeal.

Bank of England to make lenders hold £11 Billion amid tightening credit rules

 

James Stringer/Flickr

(qlmbusinessnews.com via uk.reuters.com — Tue, 27 June 2017) London, UK —

The Bank of England tightened its controls on lending on Tuesday and said it was likely to make British banks hold an extra 11.4 billion pounds of capital as it decided the risk of a big hit to the economy from the Brexit vote had passed.

After the referendum decision to leave the European Union a year ago, the BoE cut to zero a requirement that banks create a capital buffer as it sought to offset an expected drying up of lending.

But Britain’s economy has performed more strongly than expected since the vote, despite some more recent signs of a slowdown. Some of the central banks’ interest rate setters think it is already time to raise its main interest rate.

On Tuesday the BoE’s separate Financial Policy Committee declared that overall risks to Britain’s economy from its financial system were at a “standard” level.

The FPC raised its counter-cyclical capital buffer (CCyB) – which rises and falls along with the ups and downs of the economy – to 0.5 percent from zero with a one-year implementation phase. It said that it expected to raise it further to 1.0 percent in November.

One percent is the level that reflects an economy that is running normally.

Bank shares fell after the BoE announcement but recovered soon after to their levels earlier on Tuesday.

The BoE also said it was concerned that lenders were placing undue weight on recent low losses which could only be achieved in the current benign conditions.

“As is often the case in a standard environment, there are pockets of risks that warrant vigilance,” the BoE said.

The BoE said it was continuing to oversee banks’ preparations for Brexit, including for the possibility of Britain leaving the EU in 2019 without securing any trade deal, cutting off banks from their European customers which could undermine financial stability.

“Such scenarios are where contingency planning and preparation will be most valuable,” the BoE said.

Each 0.5 percent increase adds 5.7 billion pounds to British banks’ capital requirements, though many banks already hold capital in excess of the minimum so may not need to raise fresh funds.

TIGHTER NEW RULES FOR LENDING

The BoE also said British regulators would publish tighter rules on consumer lending next month, and that it would bring forward planned checks on whether banks could cope with consumer loans losses to September from November.

Existing restrictions on high loan-to-income mortgage lending were likely to stay for the long term, the BoE said, and it also tweaked the rate against which lenders must test borrowers’ ability to repay their mortgages.

The BoE said some global risks it had previously identified had not crystallised. But it warned of dangers from China, where private-sector borrowing is now more than two and a half times annual economic output.

“High debt makes China vulnerable to shocks. This could affect the global economy and UK banks.”

It also warned that British corporate bonds and commercial real estate may be overvalued. Both had their valuations boosted by low interest rates, but did not appear to take into account that these low interest rates reflected a weak economic outlook.

“Current London West End office prices are well above the range of estimated sustainable valuation levels,” it said.

The FPC raised the minimum leverage ratio for British banks to 3.25 percent from 3.0 percent, to reflect last year’s exclusion of central bank reserves from the calculation of capital. This exclusion was designed to ensure that monetary policy measures like quantitative easing did not crimp lending.

By David Milliken and Huw Jones

Holland & Barratt sold to Russian billionaire for nearly £2 billion

(qlmbusinessnews.com via bbc.co.uk – – Mon, 26 June, 2017) London, Uk – –

Holland & Barrett, the UK’s biggest health food retailer, is being bought by a Russian billionaire for £1.8bn.

L1 Retail, a fund controlled by Mikhail Fridman, is buying the chain from US private equity firm Carlyle.

Carlyle acquired Nuneaton-based Holland & Barrett as part of its $3.8bn (£3bn) purchase in 2010 of US firm Nature’s Bounty, now NBTY.

The chain, which has more than 1,300 stores worldwide, is expected to change hands in September.

Holland & Barrett was founded by William Holland and Alfred Barrett in Bishop’s Stortford, Hertfordshire, in 1870.

They initially sold groceries and clothing, but later split the two into separate businesses. The grocery business was sold to Alfred Button & Sons in the 1920s, but the original name was retained.

The company eventually started focusing on health foods and changed hands several times. It now employs more than 4,000 people.

“Holland & Barrett is a clear market leader in the UK health and wellness retail market, with attractive growth positions in other European and international markets,” said L1 Retail managing partner Stephan DuCharme.

“We believe that the company is well positioned to benefit from structural growth in the growing £10bn health and wellness market and has multiple levers for long-term growth and value creation.”

The purchase is the first by L1 Retail, which was set up in late 2016.
It aims to invest $3bn in a small number of retail businesses that it believes can be market leaders by “moving with and leading long-term trends”.

The fund’s advisory board includes John Walden, the former chief executive of Home Retail Group.

Other members are Karl-Heinz Holland, who was chief executive of Lidl Group, the German supermarket chain, and Clive Humby, one of the founders of dunnhumby, which came up with the idea for Tesco’s Clubcard.

L1 also has funds focused on energy, technology and health.

Peter Aldis, Holland & Barrett chief executive, is to stay on. He said: “We are delighted to now be in partnership with the L1 Retail team and its advisory board of internationally-renowned retailers.”

Mr Fridman is best known for his role as chief executive of BP’s Russian joint venture TNK between 2003 and 2012, when it was sold to Rosneft for $56bn.

He used the proceeds from the sale of his stake to set up L1, which also has investments in the telecoms, technology and energy sectors.

His oil and gas interests stretch from Algeria and Libya to Poland and Norway.

Mervyn Davies, the former Standard Chartered chief executive who is now Lord Davies of Abersoch, is chairman of L1 Holdings.

RBS restructuring to cut hundreds of UK jobs in move to India

morebyless/flickr.com
(qlmbusinessnews.com via theguardian.com – – Mon 26 June, 2017) London, Uk – –

Royal Bank of Scotland is to cut 443 jobs in Britain as the bank moves its team that arranges loans for small businesses to India.

The taxpayer-controlled bank said that the roles would transfer to Mumbai, to be included in the group’s growing team there, as part of a restructuring designed to cut costs, first reported in the Mail on Sunday.

An RBS spokesperson said: “As we become a simpler, smaller, bank, we are making some changes to the way we serve our customers. Unfortunately, these changes will result in the net reduction of 443 roles in the UK. We realise this will be difficult news for staff and we will do everything we can to support those affected, including redeployment into new roles where possible. All roles which require customer contact will remain in the UK.”

The latest wave of job cuts by RBS in the UK comes after at least 400 roles were moved to India last year, including 300 or so investment banking jobs.

In March this year the state-owned bank also said it was axing 158 branches, most of which were NatWest outlets, with the loss of up to 362 jobs.

Last year the bank shed more than 500 jobs as part of a plan to replace the staff giving investment tips with “robo-advisers”.

The bank has been trying to cut costs since a £45bn government bailout nearly 10 years ago at the height of the financial crisis.

Rob MacGregor, national officer for finance at Unite, said: “There has been a drip, drip, drip, cumulative effect so that we estimate that 12,500 people now work for RBS in India. That’s interesting for an organisation that owes its existence to the British taxpayer. We feel RBS has a moral responsibility to try wherever possible to keep work here in the UK. There is no customer business in India; it is just where they can get the jobs they want doing done cheaper.”

Moving jobs which relate to small business loans is likely to prove particularly controversial following a scandal at the bank’s global restructuring group, known as GRG.

MacGregor said: “It does pose the question, when it comes to regulation and risk, is this the right move for RBS?”

Small businesses were pushed to the brink of collapse to enable RBS to make a profit and, after years of pressure from campaigners, the bank set aside £400m to refund fees for customers of the now disbanded division.

RBS has also racked up a £1bn bill to end a legal battle sparked by the government bailout. The battle, involving 9,000 investors, has cost the bank an estimated £900m in settlements to shareholders and £100m in legal fees.

By Sarah Butler

Online gambling companies investigated by government watchdog, into unfair practices

 

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 23 June, 2017) London, Uk – –

Online gambling companies will have to change their “unfair” sign-up deals or face a legal challenge after the Competition and Markets Authority (CMA) announced that it was launching enforcement action against operators that it believes to be breaking consumer law.

The CMA has been conducting an investigation with the Gambling Commission since last October into how the online gambling sector draws customers in with sign-up promotions and then does not allow them to withdraw money and quit while they are ahead.

It said that some customers “might have to play hundreds of times before they are allowed to withdraw any money”. It is also concerned that minimum withdrawal amounts are far larger than the original deposit, meaning customers have to bet more to take out their winnings.

Nisha Arora, the CMA’s senior director for consumer enforcement, said that customers were finding that “the dice are loaded against them” and were encountering “a whole host of hurdles in their way” when trying to withdraw their winnings.

Sarah Harrison, the Gambling Commission’s chief executive, said that gambling companies “should be under no illusion” that it will “take decisive action” if it believes their sign-up practices do not comply with consumer law.

“Gambling operators must treat customers fairly but some have been relying on terms that are unclear with too many strings attached,” she added.

The online gambling sector is worth £4.5bn and attracts more than 6.5m regular users in the UK.

The CMA will first demand changes to current practices at online gambling operators it deems to be abusing consumer law. The companies will then have time to offer their solution to the problems raised and, if the changes are unsatisfactory, the CMA can take the company to court.

The CMA has also started a line of investigation over concerns that operators may be applying social responsibility and anti-money laundering requirements in a restrictive way, stopping legitimate customers withdrawing funds from accounts.

“Those checks cannot be used as an excuse to unduly restrict legitimate customers from withdrawing their funds,” said Ms Harrison.

Following today’s announcement, shares in online-focused bookies 888 and GVC fell 0.85pc and 1.1pc respectively.

Neil Wilson, senior market analyst at ETX capital, said: “The move [by the CMA] highlights the willingness of the regulator to act and forms part of what appears to be a much broader clampdown on the industry after a period of liberalisation. The regulatory trend is working against the industry at present.”

The gambling industry is facing increased scrutiny of fixed odds betting terminals (FOBT), which have been labelled the “crack cocaine” of the industry.

Both Labour and the Liberal Democrats pledged in their general election manifestos to cut the maximum bet allowed on these gambling machines from £100 to just £2.

Analysts at Barclays estimated that Ladbrokes Coral could lose £439m in revenue next year if FOBT stakes are cut to that level. It also predicted falls in revenue of £288m and £58m for William Hill and Paddy Power Betfair respectively. Those figures fall to £329m, £216m and £43m respectively if some of the lost FOBT revenue is still spent at the bookmakers in other ways.

In April, John White, the chief executive of Bacta, the trade association for the UK’s amusement and gaming machine industry, said that gambling operators with FOBTs “should learn to live without” the “dangerously high £100 stake limit”. Mr White called concerns from betting companies that setting the limit too low would be damaging on the industry as “scaremongering”.

By Tom Rees

Ireland AIB Sale raises 3 billion euros

(qlmbusinessnews.com via uk.finance.yahoo.com — Fri, 23 May 2017) London, Uk —

DUBLIN (Reuters) – Ireland raised 3 billion euros (2.7 billion pounds) by selling a quarter of Allied Irish Banks (AIB) on Friday in a remarkable turnaround for a company at the forefront of reckless lending during the “Celtic Tiger” boom.

The sale took the overall return for the state from AIB to nearly half the 21 billion euros spent to bail the bank out after a massive property crash in 2009, the biggest bill for any Irish lender still trading.

The state ended up with 99.9 percent of AIB and has been nursing it back to health, with the aim of eventually recouping all the taxpayer money it ploughed into the lender, one of three it managed to save in the euro zone’s most costly state rescue.

The initial public offering (IPO) of 25 percent of AIB’s shares at 4.40 euros each was the third largest European bank listing since the financial crisis and the biggest IPO of any kind in London by market capitalisation in almost six years.

“The successful completion today of AIB’s IPO represents a significant milestone,” Finance Minister Paschal Donohoe said of the long-awaited share sale his predecessor Michael Noonan launched in May.

“This successful IPO has created a strong platform for the state to recover all the money it has invested in AIB and to further dispose of our banking investments for the benefit of the Irish people,” Donohoe said.

In the biggest test yet of investor appetite for the Irish banking sector since the crisis, the AIB shares on offer were four times oversubscribed and sold at the midpoint of an initial 3.90 euro to 4.90 euro range set last week.

The sale price valued the bank at 11.9 billion euros, meaning investors only received a 3 percent discount to the bank’s book value of 12.3 billion euros at the end of 2016 – or 0.97 times tangible book value.

That put AIB shares at a premium to its main Irish rival Bank of Ireland, which trades at 0.87 times book value, and towards the level of European rivals such as Lloyds and ABN Amro.

“LANDMARK DAY”

Shares in the bank climbed 7 percent to 4.71 euros in unofficial trading ahead of next Tuesday’s formal debut on the Dublin and London stock exchanges.

“Although the valuation only leaves around 7 percent upside versus our target price, we believe the potential for special dividends, excess capital and strong top down dynamics in Ireland are likely to be supportive of the stock price,” Keefe, Bruyette & Woods analyst Daragh Quinn wrote in a note.

Like Ireland’s economy, which is growing faster than any other in Europe, AIB has staged a strong recovery, posting a profit for each of the last three years and becoming the first domestically owned lender to restart dividends since the crash.

The return for the state from the IPO, together with the amount AIB has repaid in capital, fees, dividends and coupons since its bailout, now comes to almost 10 billion euros.

“This is a landmark day for the bank,” AIB chief executive Bernard Byrne said in a statement. “The level of investor interest and support is a great vote of confidence in the strength of the turnaround in the bank and the wider economy.”

Ireland pumped 64 billion euros into its banks and expects to turn a profit on the half given to the three that survived. Noonan said last month it would probably take eight to 10 years to return AIB fully to private ownership.

The government will use Friday’s proceeds to cut some 1.5 percent from a national debt that at 200 billion euros is still among the highest in the euro zone by most measures.

As the deal also includes a greenshoe, or over-allotment option, the size of the IPO could rise to 28.75 percent if demand proves higher than expected following AIB’s debut – and add another 400 million euros to state coffers.

By Padraic Halpin

(Additional reporting by Dasha Afanasieva in London)

 

Train operators in bidding war for two of the UK’s most lucrative rail contracts

Joshua Brown/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Thur, 22 June, 2017) London, Uk – –

Railway operators around the globe are squaring off in the final stages of a bidding war for two of the UK’s most lucrative rail contracts.

The Department for Transport has announced the shortlist of travel giants in the running to operate the West Coast and Southeastern rail franchises.

The stakes are particularly high in the contest for the West Coast Partnership (WCP) contract as the winner will also be expected to work with HS2 to launch the first services on the multi-billion pound high-speed rail project, which will run from London to Birmingham from 2026.

The franchise is currently operated by Stagecoach and Virgin, who have enlisted the support of French company SNCF in a bid to retain the contract.

Also looking to land the franchise is Hong Kong-based MTR, which recently won the South West Trains contract alongside travel operator FirstGroup.

MTR is pairing up with China’s Guangshen Railway Company in its bid for the WCP contract.

FirstGroup is also shortlisted, in a bid with Italian company Trenitalia.

“The West Coast Partnership will support growth and better services on the West Coast Main Line while helping to ensure that HS2 becomes the backbone of Britain’s railways,” said transport secretary Chris Grayling.

“This will create more seats for passengers, improve connections between our great cities, free up space on existing rail lines and generate jobs and economic growth throughout the country. I look forward to seeing the bidders’ innovative ideas to put passengers at the heart of the railway.”

Stagecoach has also been shortlisted for the Southeastern franchise, which operates trains from Kent into London.

Also in the running are Trenitalia and South Eastern Holdings, a joint venture company owned by the East Japan Railway Company, Dutch firm Abellio and Japanese giant Mitsui.

Also in the running is London and South East Passenger Rail Services Limited, a wholly subsidiary of UK transport company Govia, which is the current operator of the franchise.

“Southeastern is one of the busiest franchises in the UK, running almost two thousand services every weekday,” Mr Grayling said.

“We want passengers to be at the heart of everything that the new operator does, enjoying modern, spacious trains on a more punctual and reliable service. We will listen to what passengers say in the current public consultation, and we will seek to make changes and improvements only with their support.”

By Sam Dean

Tesco Cardiff call centre to close with potential job loss of 1,100

(qlmbusinessnews.com via theguardian.com – – Thur, 22 June, 2017) London, Uk – –

Tesco is to close a call centre in Cardiff, putting 1,100 jobs at risk.

The supermarket chain said that in February it planned to close one of its two call centres which handle customer emails, social media inquiries and phone calls. About 250 jobs will be created in the group’s other call centre, in Dundee, which will handle all customer queries. Workers from Cardiff will be offered work there but few are expected to move.

Nick Ireland, the divisional officer of Usdaw, the shopworkers’ trade union, said workers in Cardiff were “understandably shocked” by the announcement.

“This is clearly devastating news for our members and will have a wider impact on south Wales, as so many jobs are potentially lost to our local economy.

“We will now enter into consultation talks with the company over the coming weeks to look at the business case for the proposed closure. Our priorities are to keep as many members as possible in employment, whether that is with Tesco or other local employers, and to get the best possible deal for our members.”

Andrew RT Davies, leader of the Conservatives in the Welsh Assembly, said: “This could be the biggest single loss of jobs in Wales since 2009, and will be a huge blow for the employees and their families and the South Wales economy.”

Matt Davies, the UK chief executive of Tesco, said: “The retail sector is facing unprecedented challenges and we must ensure we run our business in a sustainable and cost-effective way, while meeting the changing needs of our customers.

“To help us achieve this, we’ve taken the difficult decision to close our customer service operations in Cardiff.

“We realise this will have a significant effect on colleagues in the Cardiff area, and our priority now is to continue to do all we can to support them at this time.”

Retailers are having to rethink their businesses in the face of aggressive online competitors as well as higher costs after a hike in the national living wage from £7.20 to £7.50, recent business rate changes and the introduction of the apprenticeship levy.

Lewis said last year that retailers faced a “potentially lethal cocktail” as profits slump and costs rise.

Rising competition from the discounters Aldi and Lidl has also forced traditional supermarkets to hold down prices at a time of rising costs resulting from the fall in the value of the pound against the euro and the dollar.

The cuts at Tesco are the latest in a string of cutbacks implemented as part of a turnaround plan led by Dave Lewis, the group chief executive, who joined in autumn 2014.

 

In his first year in charge, Lewis axed nearly 5,000 head office and UK store management jobs as well as more than 4,000 roles overseas and at the group’s banking division. More than 2,500 jobs were lost with the closure of 48 underperforming Tesco stores, while in April 3,000 jobs were put at risk when the chain cut night shifts for shelf stackers in some of its biggest supermarkets.

Tesco is not alone. Sainsbury’s, Morrisons and Waitrose have also closed stores while Asda has cut jobs as all the big grocers try to keep costs down.

But the latest changes are part of a cost-cutting drive designed to improve the efficiency of Tesco before its £3.7bn takeover of Booker, the cash and carry company behind the Londis and Budgens convenience store chains.

The announcement of the job cuts comes during a difficult week for the UK’s biggest supermarket. On Tuesday, call centres were inundated with customer complaints following an IT glitch that hit up to 10% of online grocery orders.

On Wednesday, Tesco Bank customers were unable to access online banking for several hours after another IT issue. Customer queries for the bank are handled by a separate operation from those in Cardiff and Dundee.

Tesco Bank apologised to those affected and said: “Service is now restored and customers can access their account as normal.”

By Sarah Butler

 

Centrica sells UK gas plants to EPH for 318 million pounds

 

Ton Zijp/Flickr

(qlmbusinessnews.com via uk.reuters.com — Wed, 21 June 2017) London, UK —

British Gas parent company Centrica has agreed to sell its two biggest gas-fired power plants to Czech peer EPH for 318 million pounds, pushing forward with its plan to become a nimbler energy supplier in a fiercely competitive market.

Centrica’s Langage and South Humber power plants, which jointly employ around 130 people, have an installed capacity of 2.3 gigawatts (GW) and hold contracts to provide back-up power for the coming four years.

“The transaction is consistent with Centrica’s strategy to shift investment towards its customer-facing businesses,” Centrica said in a statement.

The news comes a day after Centrica announced the permanent closure of its Rough gas storage site, Britain’s largest.

Two weeks ago it sold its Canadian oil and gas assets, highlighting its move away from traditional energy.

Instead, Centrica said it wants to focus on flexible power generation assets. It has already invested in fast-response gas peaking plants and a power storage facility.

For EPH, the purchase builds on its existing power plant portfolio in Britain, which consists of the Eggborough and Lynemouth power stations.

The company has been snapping up coal, gas and nuclear power assets in recent years, betting they will remain needed and investments will pay off once electricity prices rise.

By Karolin Schaps

Travis Kalanick Uber boss resigns as CEO

TechCrunch/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Wed, 21 Nov, 2017) London, Uk – –

Uber CEO Travis Kalanick has resigned, capping a series of controversies that have rocked the world’s largest privately backed start-up.

The company confirmed Mr Kalanick’s departure from the top executive’s role Tuesday, after the New York Times reported major backers including Benchmark Capital demanded he resign. Mr Kalanick will remain on the board of directors, the newspaper said.

While Uber has become the world’s most valuable start-up, it has been dogged by drama including allegations of sexual harassment and the use of software to bypass regulators.

The resignation of the man who founded Uber in 2009 comes after a series of controversies shone a light on problems with the famously aggressive start-up’s culture and governance.

As Uber’s public face, Mr Kalanick has embodied its success. Earlier this month, he told staff of plans for a leave of absence, handing the running of the company over to a management committee. It followed the sudden death of his mother in a boating accident.

In a statement reported by the New York Times, Kalanick said: “I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors’ request to step aside so that Uber can go back to building rather than be distracted with another fight.”

Despite recent turmoil, Uber’s business is growing. Revenue increased to $3.4bn (£2.7bn) in the first quarter, while losses narrowed – though they remain substantial at $708m.

The company’s board said: “Travis has always put Uber first. This is a bold decision and a sign of his devotion and love for Uber.

“By stepping away, he’s taking the time to heal from his personal tragedy while giving the company room to fully embrace this new chapter in Uber’s history. We look forward to continuing to serve with him on the board.”