Asda Supermarket Suffers Sharp Fall in Sales and Profits in 2016

 

grassrootsgroundswell/Flickr

(qlmbusinessnews.com via bbc.co.uk – – Wed, 2 Aug 2017) London, Uk – –

Sales fall and lower profits at supermarket Asda in 2016 have been revealed in detail in newly-filed accounts.

The figures for the Walmart-owned supermarket, filed at Companies House, confirm a torrid spell for Asda as it faced stiff competition in the grocery sector.

Like-for-like sales were down 5.7% compared with the previous year.

Pre-tax profits dropped almost 19% to £791.7m at the Leeds-based company.

“The grocery market has continued to experience low growth throughout the year and competition in the sector has remained intense. Our sales performance, relative to the market, was behind our expectations,” the company said.

Changes

Asda, Tesco, Sainsbury’s and Morrisons – the so-called big four UK supermarkets – also face competition from German discounters Aldi and Lidl.

Asda suffered more than most and, unlike others, has struggled to fight back. In May, it reported decreasing sales in the first quarter of 2017 – the 11th consecutive quarter of falls – as it continued to lose ground to its rivals.

However, Asda added that despite the disappointing results, there had been an improvement following “strategic changes” under new boss Sean Clarke.

Mr Clarke, who replaced previous chief executive Andy Clarke a year ago, has slashed the prices of everyday items as he attempts to arrest falling sales.

The chain reported a 2.8% fall in like-for-like sales in its first quarter of this year, a moderate improvement on the previous period, which saw sales fall 2.9%.

‘Focus on price’

Analysts have said that a major turnaround is required at Asda.

“Sainsbury’s and Tesco have always had more opportunity for differentiation from the discounters, but Asda has chosen to focus on price rather than range and in-store experience, which has clearly been the wrong strategy,” said Tom Berry, retail analyst at GlobalData.

“Asda has been flailing without direction for too long, and a comprehensive plan is needed if it is to survive in the highly competitive UK grocery market.”

Phil Dorrell, of consultancy Retail Remedy, is a previous marketing chief at Asda. He said that it was a difficult market for Asda and it “had a lot of catching up to do”.

“It is not changing significantly or fast enough to pull around the results. It did not get its proposition right,” he said.

 

Car Makers Hold ‘Diesel Summit’ in Germany

 

 

German carmakers are meeting the government on Wednesday seeking solutions for the diesel sector damaged by scandals over emissions test cheating.

The aim is to find ways to cut emissions and head off moves by some large cities to ban diesel vehicles.

The government has been accused of not doing enough to crack down on pollution, and of being too close to the car industry.

Rolls-Royce interim results delivered a forecast-beating performance

Warren East Rolls-Royce chief executive

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 1 August 2017) London, Uk – –

Rolls-Royce chief executive Warren East has delivered a forecast-beating performance with the company’s interim results as he continues to deliver a turnaround of the blue-chip engineering group.

Half-year results for the six months to the end of June showed reported revenue of £7.57bn, up from £6.46bn a year ago. Pre-tax profit soared to £1.94bn, reversing last year’s loss of £2.15bn.

However, the company conceded that the improvement in profit was heavily influenced by currency movements. Rolls has a huge “hedge book” of foreign exchange deals aimed at protecting it from currency fluctuations and the strengthening of the pound since the start of the year meant these assets got a £1.4bn boost, compared with a £2.2bn charge last time round. Rolls noted that this was the “principal reason” for the strong results at a headline level.

On an underlying basis, Rolls’s preferred measure and which strips out currency movements, revenue was £6.87bn, up 6pc. Pre-tax profit was £287m, a gain of 148pc. The weaker pound has inflated Rolls’s figures, as the bulk of the aviation industry’s deals are done in US dollars.

The news was welcomed by traders, with shares in the company up more than 6pc in early dealing, rising 54p to 947.5p.

City forecasts were much more downbeat. Analysts had been expecting the FTSE 100 business would report underlying revenue of £6.58bn and underlying pre-tax profit of £193m.

Free cash flow – the measure of how much money the company generates after expenses and a key figure for Mr East – was negative £339m, meaning the company is spending more than it is making. However, this was still an improvement on the figure a year ago, which was negative £414m.

Mr East has repeatedly said that he wants Rolls to be generating £1bn of positive free cash flow by 2020.

Rolls has tried to rein back expectations, describing the £1bn figure as an “ambition ” rather than a clear target.

“Rolls-Royce delivered encouraging year-on-year operational progress in the first six months,” said Mr East, who was appointed two years ago to turn around the business after it issued a series of profit warnings that saw its share price halve.

The chief executive said Rolls’s plans to increase the number of jet engines it makes for airliners and at a lower cost were working, with deliveries up 27pc and “good further progress” improving the economics of making the engines.

Mr East added that cost savings from his “simplification” restructuring “were ahead of plan” and a better than expected boost from accounting measures meant the company had delivered “a good set of results, with financial performance ahead of our expectations for the first half”.

However, Mr East cautioned analysts and investors not to get ahead of themselves, holding guidance at previous levels and warning that “execution and delivery of a number of important milestones across our businesses will be key to achieving our full-year expectations”.

Analysts have said that as Mr East has deliberately been downbeat about the company’s performance to mange expectations.

“Warren is being smart by under-promising and over delivering,” said one.

The order book at the end of the six months stood at £82.7bn, up from £79.5bn at the same point a year ago.

The dividend was held at 4.6p.

By Alan Tovey

New Four Seasons Hotel London at Ten Trinity Square

 

Originally built in 1922 as the former headquarters of the Port of London Authority, Four Seasons Hotel London at Ten Trinity Square is a luxurious landmark of sophistication reborn in the City’s historic heart. The Grade-II* listed building has been carefully restored to create a 100-room hotel along with 41 private residences and a private members club. Within steps of the Tower of London (home to the Crown Jewels), Tower Bridge and the River Thames, this is one of the capitals most remarkable central locations.

2018 ROLLS-ROYCE PHANTOM

 

The New Phantom will be the first of a new generation of Rolls-Royces to benefit from the creation of the Architecture of Luxury. This new architecture serves as the foundation on which this eighth generation of Phantom reaffirms its position as ‘The Best Car in the World’ by taking the best fundamentals and making them better.

Sir Richard Branson sells 31pc stake of Virgin Atlantic airline for £220m

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 28 July 2017) London, Uk – –

Sir Richard Branson’s Virgin Group is to receive a major windfall by selling down part of its stake in Virgin Atlantic in a major joint venture deal set to include Air France-KLM and existing investor Delta Air Lines.

Air France-KLM is to buy a 31pc stake in Virgin Atlantic for £220m.

Virgin will hold on to a 20pc stake in the trans-Atlantic airline, and hold onto the chairmanship, as a result of the deal which will see a closer union between the four airlines.

Delta, which bought a 49pc stake in Virgin Atlantic from Singapore Airlines in 2013, will at the same time buy a 10pc stake in Air-France KLM for €375m, gaining a seat on the board of its European counterpart.

Alitalia’s involvement is through its existing partnerships with Air France-KLM and Delta, but the deal will not see the Italian carrier gain any equity interest in the joint venture or have a seat atop the entity.

Shai Weiss, chief commercial officer for Virgin Atlantic, said the deal was not linked to the UK’s impending exit from the EU.

“I can say really definitively this has nothing to do with Brexit,” he said, adding the rationale was entirely commercial. Mr Weiss said the airline did not fly intra-Europe and so the joint venture was not a way to secure such flying rights post-Brexit.

He said the success of its existing joint venture with Delta, which had helped provide so-called feed traffic – passengers who take a short haul flight to a hub airport before travelling on a long haul flight – could now be replicated with passengers from Europe.

If the UK endures a hard Brexit, rules which says airlines have to be majority domestic owned could be enforced. This deal means Virgin Atlantic is only 20pc British owned but Mr Weiss said it would overcome such problems if they transpired. If the Brexit deal is more amicable, the airline’s majority European ownership will mean it complies with similar rules on the Continent.

Sir Richard sent a letter to the airline’s staff outlining the details of the deal, in which he said he would remain the largest individual investor.

The billionaire entrepreneur said the airline industry had consolidated since he launched Atlantic in 1984, going on to say “it’s now our turn to put ourselves at the heart of an important alliance”.

“With these three partners in place and with me – and one day, the wider Branson family – still very much involved, we have the foundations to make sure this is so,” Sir Richard added.

The deal, set to last for at least 15 years once it gains regulatory approval, will, subject to regulatory approval, see the carriers combine their transatlantic routes.

The joint venture will offer more than 300 daily non-stop transatlantic flights from 12 hubs including from Amsterdam, Atlanta, Heathrow, New York’s JFK and Los Angeles.

Sir Richard said “one of the best moves” his company made was tying up with Delta Air Lines five years ago, partly to compete with the British Airways and American Airlines alliance.

By Bradley Gerrard

Uk to ban sales of all diesel and petrol cars from 2040

 

(qlmbusinessnews.com via theguardian.com – – Wed, 26 July 2017) London, Uk – –

Plans follow French commitment to take polluting vehicles off the road owing to effect of poor air quality on people’s health

Britain is to ban all new petrol and diesel cars and vans from 2040 amid fears that rising levels of nitrogen oxide pose a major risk to public health.

The commitment, which follows a similar pledge in France, is part of the government’s much-anticipated clean air plan, which has been at the heart of a protracted high court legal battle.

The government warned that the move, which will also take in hybrid vehicles, was needed because of the unnecessary and avoidable impact that poor air quality was having on people’s health. Ministers believe it poses the largest environmental risk to public health in the UK, costing up to £2.7bn in lost productivity in one recent year.

Ministers have been urged to introduce charges for vehicles to enter a series of “clean air zones” (CAZ). However, the government only wants taxes to be considered as a last resort, fearing a backlash against any move that punishes motorists.

“Poor air quality is the biggest environmental risk to public health in the UK and this government is determined to take strong action in the shortest time possible,” a government spokesman said.

“That is why we are providing councils with new funding to accelerate development of local plans, as part of an ambitious £3bn programme to clean up dirty air around our roads.”

The final plan, which was due by the end of July, comes after a draft report that environmental lawyers described as “much weaker than hoped for”.

The environment secretary, Michael Gove, will be hoping for a better reception when he publishes the final document on Wednesday following months of legal wrangling.

A briefing on parts of the plan, seen by the Guardian, repeats the heavy focus on the steps that can be taken to help councils improve air quality in specific areas where emissions have breached EU thresholds.

Measures to be urgently brought in by local authorities that have repeatedly breached EU rules include retrofitting buses and other public transport, changing road layouts and altering features such as roundabouts and speed humps.

Reprogramming traffic lights will also be included in local plans, with councils being given £255m to accelerate their efforts. Local emissions hotspots will be required to layout their plans by March 2018 and finalise them by the end of the year. A targeted scrappage scheme is also expected to be included.

Some want the countrywide initiative to follow in the footsteps of London, which is introducing a £10 toxic “T-charge” that will be levied on up to 10,000 of the oldest, most polluting vehicles every weekday.

Sources insisted that while the idea of charges were on the table, there was no plan to force councils to introduce them, and that other measures would be exhausted first.

They hope the centrepiece of Wednesday’s strategywill be the plan to ban diesel and petrol sales completely by 2040, in line with Emmanuel Macron’s efforts across the Channel.

The French president took the steps to help his country meet its targets under the Paris climate accord, in an announcement that came a day after Volvo said it would only make fully electric or hybrid cars from 2019 onwards.

That decision was hailed as the beginning of the end for the internal combustion engine’s dominance of motor transport after more than a century.

Prof David Bailey, an automotive industry expert at Aston University, said: “The timescale involved here is sufficiently long-term to be taken seriously. If enacted it would send a very clear signal to manufacturers and consumers of the direction of travel and may accelerate a transition to electric cars.”

Britain’s air quality package also includes £1bn in ultra-low emissions vehicles including investing nearly £100m in the UK’s charging infrastructure and funding the ”plug-in car” and “plug-in grant” schemes.

There will also be £290m for the national productivity investment fund, which will go towards the retrofitting, and money towards low-emission taxis.

The report will also include an air quality grant for councils, a green bus fund for low carbon vehicles, £1.2bn for cycling and walking and £100m to help air quality on the roads.

The strategy comes amid warnings that the UK’s high level of air pollution could be be responsible for 40,000 premature deaths a year.

A judge had said the government’s original plans on tackling the issue, which included five clean air zones, were so poor as to be unlawful. The government was asked to present a new draft policy to tackle air pollution from diesel traffic before the election.

It was then called to court to explain why it had made a last-minute application to delay publication of its draft policy until after the election.

James Eadie QC, representing the government, said the policy was ready to be published but it would be controversial and should therefore be withheld until after the election.

“If you publish a draft plan, it drops all the issues of controversy into the election … like dropping a controversial bomb,” he said, adding that it could risk breaching rules about civil service neutrality and lead to the policy being labelled a Tory plan.

However, judges said the government did have to publish a draft plan with the final version needed by the end of July.

May’s draft contained few concrete proposals and did not specify the cities and towns where polluting vehicles might face charges, the level of any charges or the scope or value of any scrappage scheme.

Instead, the plan put the onus for action on local authorities: “Local authorities are already responsible for improving air quality in their area, but will now be expected to develop new and creative solutions to reduce emissions as quickly as possible, while avoiding undue impact on the motorist.”

Analysis in the documents showed increasing the number of CAZs from the current six planned to 27 would make by far the greatest impact in cutting pollution and provide cost benefits of over £1bn. The CAZ policy would cut more than 1,000 times more NO2 than a scrappage scheme, even if that scheme required old diesels to be replaced by electric cars.

But it required local authorities to exhaust all other options before introducing CAZ charging for diesel vehicles, such as removing speed bumps and retrofitting buses.

The coalition government had already set out a vision for almost every car and van to be ultra-low emission by 2050 – a move which the government acknowledged would require “almost all new cars and vans sold to be near-zero emission at the tailpipe by 2040”. So it is unclear to what extent the new pledge will further boost Britain’s ability to achieve air quality requirements.

ClientEarth, the campaign group that has successfully pursued the government through the courts over the UK’s air pollution crisis, gave a cautious welcome to the announcement but said ministers must take immediate action to tackle the UK’s air pollution crisis.

“The government has trumpeted some promising measures with its air quality plans, but we need to see the detail,” said CEO James Thornton. “A clear policy to move people towards cleaner vehicles by banning the sale of petrol and diesel cars and vans after 2040 is welcome, as is more funding for local authorities.

“However, the law says ministers must bring down illegal levels of air pollution as soon as possible, so any measures announced in this plan must be focused on doing that.”

The mayor of London, Sadiq Khan, has been calling for tougher measures to tackle air pollution, which kills 9,000 people a year in the capital.

A City Hall source was sceptical about the government’s announcement. “We need to look at the full details but what Londoners suffering from the terrible health impacts of air pollution desperately need is a fully-funded diesel scrappage fund – and they need it right now.”

Areeba Hamid, clean air campaigner at Greenpeace, said: “The high court was clear that the government must bring down toxic air pollution in the UK in the shortest possible time. This plan is still miles away from that.

“The government cannot shy away any longer from the issue of diesel cars clogging up and polluting our cities, and must now provide real solutions, not just gimmicks. That means proper clean air zones and funding to support local authorities to tackle illegal and unsafe pollution.”

By Anushka Asthana and Matthew Taylor

QLM Business News and Market Analyses Now Available Digitally

 

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Volvo signal the end of internal combustion engines with electric motors cars from 2019

(qlmbusinessnews.com via bbc.co.uk – – Wed, 5 July 2017) London, Uk – –

Carmaker Volvo has said all new models will have an electric motor from 2019.

The Chinese-owned firm, best known for its emphasis on driver safety, has become the first traditional carmaker to signal the end of the internal combustion engine.

It plans to launch five fully electric models between 2019 and 2021 and a range of hybrid models.

But it will still be manufacturing earlier models that have pure combustion engines.

Geely, Volvo’s Chinese owner, has been quietly pushing ahead with electric car development for more than a decade.

It now aims to sell one million electric cars by 2025.
‘PR coup’

“This announcement marks the end of the solely combustion engine-powered car,” said Hakan Samuelsson, chief executive of Volvo’s carmaking division.

“People increasingly demand electrified cars, and we want to respond to our customers’ current and future needs,” he said.

Tim Urquhart, principal analyst at IHS Automotive, said the move was a “clever sort of PR coup – it is a headline grabber”.

“It is not something that moves the goalposts hugely,” he said.

“Cars launched before that date [of 2019] will still have traditional combustion engines.

“The announcement is significant, and quite impressive, but only in a small way. The hybrids they are promising to make might be mild hybrids, anything as basic as a stop-start system.”

A stop-start system is one where electricity from batteries restart a car’s petrol engine, after it has shut down when the car has come to rest at a junction, or in stationary traffic.

“However, Volvo are probably looking at something more sophisticated than that, but we don’t know what as yet.”

Tesla targets
It comes after US-based electric car firm Tesla announced on Sunday that it will start deliveries of its first mass-market car, the Model 3, at the end of the month.

Elon Musk, Tesla’s founder, said the company was on track to make 20,000 Model 3 cars a month by December.
His company’s rise has upset the traditional power balance of the US car industry.

Tesla, which makes no profits, now has a stock market value of $58bn, nearly one-quarter higher than that of Ford, one of the Detroit giants that has dominated the automotive scene for more than a century.

Take an exclusive look at Life onboard a private jet

 

Take an exclusive look at Life onboard a private jet

Flying aboard your own jet means one thing – luxury. From fine china to restaurant quality food, anything is possible. So just what can you expect if you fly on a PJ soon? CNBC’s Phil Han steps onboard a Global 6000 to find out.

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.”

 

 

UK and Netherlands motorists join forces in ‘super claim’ over VW dieselgate

Ton Schulten/Flickr

(qlmbusinessnews.com via telegraph.co.uk – – Wed, 14 June, 2017) London, Uk – –

Volkswagen is facing its biggest legal challenge in Europe over the “dieselgate” scandal with a UK class action against the car maker teaming up with a similar claim in the Netherlands.

British law firm Harcus Sinclair has joined forces to unite its 41,000 claimants with as many as 180,000 affected VW drivers in Europe to create a international “super claim”.

By combining the claims the law firms hope to have greater heft against the German car maker as they attempt to to win compensation from VW.

Damon Parker, who heads the claim for Harcus Sinclair, said: “Our partnership underscores the co-operative approach that we are adopting with law firms and entities in different jurisdictions.

“Our clients’ goal is to do all that they can to support other law firms and organisations across Europe to ensure VW is held to account.”

In 2015, it emerged in the US that VW had installed “defeat devices” on some of its diesel cars which realised when a car was being tested for emissions.

They then turned on full pollution controls to meet the required standards but were not in use in normal driving conditions.

This meant that VW cars pumped out up to 40 times the permitted level of pollution in real world driving conditions – news which sent the company’s share price plunging.

VW has admitted that while about half a million cars in the US were affected, as many as 11m worldwide contained defeat devices.

The car maker has since agreed to pay tens of billions of dollars to motorists in the US to compensate them and account for the fall in value of their vehicles. It also agreed to pay billions in fines and penalties in the US. So far no similar deals have been agreed with drivers or authorities in other nations.

Mr Parker added: “It has been over 18 months since the scandal was exposed and UK consumers have waited in vain for Volkswagen to acknowledge and respond to their complaints fairly.”

He said the claim was not just about winning payouts but also “preventing corporations from thinking that they can deceive customers and harm people’s health and the environment with impunity”.

The combined claim also targets German engineering group Bosch, which supplied the software used by VW to control its engines, along with some local Dutch companies.

Harcus Sinclair is working with European law firms AKD Benelux Lawyers, Labaton Sucharow and Breiteneder Attorneys – collectively known as “the Foundation” – on the claim.

“Since its establishment in 2015, the Foundation has tried to reach a reasonable settlement with VW on behalf of aggrieved car owners, so far without any success,” said Guido van Woerkom, director of the Foundation. “We now see no other solution than to mobilise all affected car owners to force Volkswagen, Bosch and car traders to accept their responsibility and offer a reasonable compensation.”

MPs on the UK’s Transport Select Committee have tried to hold VW to account, repeatedly calling the company’s UK boss to give evidence at hearings.

The frequently stormy sessions saw VW accused of misleading MPs, with it seeming to promise to release the full findings of a huge investigation into who knew what and when about the scandal, something the car maker has since backtracked on.

In a statement, VW said: “We intend to defend these claims robustly. There is no evidence of any adverse impact on the residual value of the affected vehicles as a result of this issue nor with their performance following the implementation of the technical measures.

“It is our view that the instigation of legal proceedings in England is premature, not least because the implementation of the technical measures in the affected vehicles is still on-going.”

Bosch added: “Bosch takes the allegations of manipulation of the diesel software very seriously. These allegations remain the subject of investigations and civil litigation and Bosch is cooperating with the continuing investigations in various jurisdictions, and is defending its interests in the litigation.”

By Alan Tovey,

British Airways may outsource more call centre jobs after Bank Holiday IT Fiasco

Michael Coghlan/Flickr

(qlmbusinessnews.com via independent – – Tue, 13 June, 2017) London, Uk – –

Its Bank Holiday meltdown, which saw hundreds of flights cancelled, was blamed by some on outsourcing. But British Airways has doubled down on its cost-cutting measures, with news today that the 9.5m annual calls to British Airways call centres in Newcastle and Manchester are in line to be outsourced to the services company Capita, affecting more than 1,000 jobs.

In a trading update before its AGM this morning, Capita said: “We have entered a period of exclusive engagement with British Airways to explore forming a potential partnership to support its global customer contact operations.”

While no contract has yet been signed, the move is aligned with the outsourcing strategy adopted by IAG, BA’s holding company. Since it was set up by BA and Iberia in 2011, the firm has been shedding non-core activities.

Over the May Bank Holiday weekend, a collapse of the airline’s IT system led to hundreds of cancelled flights which affected tens of thousands of passengers. BA rejected union accusations that outsourcing played a part in the fiasco.

The largest centre is at Newcastle Business Park, where British Airways has around 750 staff. The Manchester call centre employs around 350 people. In addition, BA has a Delhi-based call centre, which is not under discussion at present.

British Airways told The Independent: “To ensure we can offer the highest standards of service to customers, taking advantage of the latest developments in technology, we are conducting a review of our global call centre operations.

“As part of this review we are talking with Capita about the services they provide.”

By Simon Calder