(qlmbusinessnews.com via bbc.co.uk – – Wed, 15 Aug 2018) London, Uk – –
Fewer than half of Royal Bank of Scotland's customers would recommend its customer service to friends and family, according to rankings published for the first time.
The Competition and Markets Authority has published the figures in a bid to increase competition in the sector.
RBS is joint bottom of the personal banking league table, along with Clydesdale.
It is also at the bottom for business banking.
A review of retail banking in August 2016 by the competition watchdog ordered lenders to publish customer ratings figures twice a year.
There are 16 banks in the rankings for personal accounts and 14 for business banking.
Adam Land, senior director at the Competition and Markets Authority, said: “For the first time, people will now be able to compare banks on the the quality of the service they provide, and so judge if they're getting the most for their money or could do better elsewhere.”
Customers were asked how likely they would be to recommend their bank on a number of measures, such as overall customer service, online and mobile banking, overdrafts and services in branches.
In terms of overall quality of services, 49% of RBS personal customers would be likely to recommend the bank to friends and family, with Clydesdale also at 49%.
First Direct, which is owned by HSBC, came top with 85% of its customers satisfied.
For business customers, just 47% of those with RBS would recommend the bank in terms of overall service quality. Handelsbanken came top with 84%.
A spokesperson for RBS said: “We are aware we have more work to do in order to improve our service standards and deliver a better experience for our customers.”
The bank is “investing in improving the products and services we offer our personal and business customers” through the UK's first paperless mortgage and a digital lending platform for small businesses.
The results, from a survey of personal and small business customers, must be displayed in banks' branches, websites and mobile apps from today.
Christopher Woolard of the Financial Conduct Authority said: “Getting a good deal isn't just about pricing. It's also important for customers – including individuals and small businesses – to be able to judge the quality of service around their current account and to see whether other providers could offer something that suits them better.”
After the CMA review of banking in 2016, an advertising campaign was launched by the industry in a bid to get customers to change banks through a seven-day switching service. The competition body found that just 3% of current account customers had changed banks in the past year.
The CMA had said consumers could save up to £92 a year if they moved their account.
Image copyrightGETTY IMAGES
The rankings were published as RBS said it would pay a dividend to shareholders for the first time since the final crisis after agreeing a $4.9bn (£3.8bn) settlement with the US Department of Justice. It centred on the way than bank sold mortgage-backed securities, or loans packaged up into bonds and sold to investors, between 2005 and 2008.
That settlement was announced on Tuesday by DoJ, which published documents detailing the settlement. These include emails from the bank's employees. In one, a banker discusses “total f***ing garbage” loans with “fraud [that] was so rampant . . . [and] all random”.
RBS chief executive Ross McEwan said: “”There is no place for the sort of unacceptable behaviour alleged by the DoJ at the bank we are building today.”
The DoJ said it was the biggest settlement for “financial crisis-era misconduct” for a single institution: “These are allegations only, which RBS disputes and does not admit, and there has been no trial or adjudication or judicial finding of any issue of fact or law.”
RBS was bailed out by the government at the height of the financial crisis and taxpayers still own about 62% of its shares.
(qlmbusinessnews.com via theguardian.com – – Wed, 15 Aug 2018) London, Uk – –
Commuter and campaign groups call for freeze on train fare hikes following year of mass cancellations and strikes
Rail fares will go up by another 3.2% in January, the government has confirmed, with the cost of some season tickets to rise by hundreds of pounds.
The figure is below the 3.6% hike in January this year, which was the steepest rise in five years, but continues the trend of fare increases far outstripping any rise in wages.
Rail industry leaders said the fares were “underpinning once-in-a-generation investment” in the railways.
Commuters and campaigners intensified calls for a freeze in fares, in a year in which promised improvements to the railway did not materialise, strikes disrupted services, and the May timetable change cancelled tens of thousands of trains, particularly across Northern and Govia Thameslink Railway.
Confirmation of the planned 2019 rise came with the publication of July’s inflation figures by the Office of National Statistics. Rises to regulated fares, which include season tickets and off-peak returns, are capped at the level of RPI inflation – a measure that is not habitually used and is higher than CPI.
The transport secretary, Chris Grayling, infuriated unions by suggesting rail fare increases could be pegged to the lower measure of inflation if unions accept the same measure for staff pay. In a letter to the RMT, Aslef, Unite and TSSA unions, Grayling said: “As you will be aware, one of the industry’s largest costs is pay … it is important that pay agreements also use CPI and not RPI in future when it comes to basing pay deals on inflation.”
Unions blame privatisation for escalating rail costs. Mick Cash, general secretary of the RMT, said: “If Chris Grayling seriously thinks that rail staff are going to pay the price for his rank incompetence and the greed of the private train operating companies then he needs to think again.”
Grayling defended his proposal in BBC interviews on Wednesday morning as “entirely fair”, said he was “very disappointed” at the reaction from the unions. He said: “My challenge to the unions is let’s get the routine increases down to the lower level of inflation.”
Labour’s shadow transport secretary, Andy McDonald, said Grayling’s “attack on staff pay is, at best, a distraction technique and at wo a recipe for years of industrial action”.
The RMT staged small protests at stations across the country on Wednesday morning against fare rises, claiming passengers were paying “more for less” as job cuts meant fewer staff working on trains, stations and ticket offices.
Commuters at Kings Cross station in London were dismayed at the news of further fare rises. Lydia Bolton, 35, of Royston, Hertfordshire, who works part-time in the charity sector and pays £32 a day to travel to work, said: “It’s awful. We don’t know if we’re going to get a pay rise, we’ve got a young child and we have nursery costs. Of course they should freeze fares – it’s insane.”
Philip Doyle, 46, pays almost £300 a month to commute in from Potters Bar, Herts, to work in recruitment. “Fares are ridiculous, and the service is a shambles. Last Sunday we went away as a family and when we came back to London there was only one train running in three hours, instead of every 20 minutes on the timetable.”
Rosie Jones, 29, a marketing manager, pays £5,284 for an annual season ticket from Huntingdon, Cambridgeshire, said the service had recovered since the chaos of May but evening cancellations still often left her waiting at stations or standing on crowded trains: “It doesn’t seem like there’s any added value for the extra money, and it seems out of step with other costs.”
The TUC renewed calls for public ownership of rail with research showing fares have increased at more than double the rate of wages over the last decade. Fares in Britain have risen by 42% since 2008, while average weekly pay has gone up by only 18%, it said, while private firms running the trains paid out at least £165m in dividends to their shareholders last year, when overall taxpayer subsidy to the rail industry reached £3.5bn.
The RPI figure is used to set the maximum increase in regulated fares, which account for around half of all tickets sold – including commuter season tickets, some off-peak long-distance returns, and “anytime” tickets in major cities. The increased revenue is factored in to rail franchise contracts – although the government says it is up to operators whether they choose to raise fares or not.
Paul Plummer, chief executive of the Rail Delivery Group, which represents the railway, said: “Fares are underpinning a once-in-a-generation investment plan to improve the railway and politicians effectively determine that season ticket prices should change in line with other day-to-day costs to help fund this.”
(qlmbusinessnews.com via telegraph.co.uk – – Tue, 14 Aug, 2018) London, Uk – –
Royal Mail has been fined £50m for breaking competition law after it “abused its dominant position” in the letter delivery market in an attempt to force its rival Whistl to pay higher prices.
The penalty, the largest ever imposed by communications regulator Ofcom, relates to a change in the contracts Royal Mail offered wholesale customers more than four years ago.
At the time Whistl, then known as TNT, was expanding its letters arm by delivering “bulk mail” such as bank statements and utility bills in competition with Royal Mail, but was still reliant on the former state monopoly to deliver some letters on less profitable routes.
Ofcom’s investigation found that Royal Mail’s decision to hike the cost charged to competitors such as Whistl by 0.25p per letter was part of a “deliberate strategy to limit competition”.
The changes “would have had a material impact on a delivery competitor's profits, making it significantly harder for new companies to enter the bulk mail delivery market”, the watchdog said.
Royal Mail, which floated five years ago, plans to appeal the decision, which it said was “without merit and fundamentally flawed”.
It said the proposed price hike, which was cancelled after Whistl raised concerns, was designed to prevent so-called “cherry picking”, whereby competitors without Royal Mail’s obligation to deliver to all UK addresses for the same price pick and choose the most profitable routes.
“Royal Mail welcomes competition, provided it takes place on a level playing field,” it said.
A spokesman for Whistl, which exited the bulk mail market in 2015, said it would seek damages in relation to Royal Mail's actions, which he said had a “hugely negative impact on investment in and the competitive health of the UK postal sector”.
Ofcom’s Jonathan Oxley said: “All companies must play by the rules. Royal Mail's behaviour was unacceptable, and it denied postal users the potential benefits that come from effective competition.”
(qlmbusinessnews.com via news.sky.com– Tue, 14 aug 2018) London, Uk – –
The firm says its board has agreed to recommend Bain's formal 280p-a-share offer to investors, who must vote to approve the deal.
Esure, the insurance firm that owns the Shielas' Wheels brand, has agreed to a £1.2bn takeover by private equity firm Bain Capital.
In a statement, esure said its board had agreed to recommend Bain's formal 280p-a-share offer to investors, which represents a 37% premium to last week's share price.
The firm's largest backers, Sir Peter Wood and Toscafund, which hold around 31% and 17% of esure respectively, have given their backing to the deal.
A total of 75% of shareholders must vote to approve the acquisition, which would see esure taken private and delisted from the London Stock Exchange.
Sir Peter, the group's chairman, who stands to pocket around £370m from the sale, said: “It is a great outcome for shareholders, for the company, and for customers.
“Since its IPO in 2013, esure has grown to nearly 2.5 million in-force policies, delivered more than £800m of annual gross written premiums, and returned just under £300m to shareholders in dividends as well as the considerable value delivered to shareholders through the demerger of GoCompare.
“As a private company and with Bain Capital's backing, esure will be able to invest behind the innovation required to fully realise the opportunities in this market.”
He will continue as chairman following the takeover.
Esure also announced its results for the first half of the year, which showed pre-tax profit fell by 20% from £45.1m to £36.1m in the six months to 30 June.
The company said its profits were dented by a £14m charge from adverse weather-related claims in its home and motor accounts.
It blamed the drop on a hit from the so-called “Beast from the East” which brought snow and icy temperatures in February and March and flash flooding in May.
Esure provides insurance products to more than two million drivers, homeowners, pet owners and holidaymakers across the UK.
(qlmbusinessnews.com via theguardian.com – – Mon, 13th Aug 2018) London, Uk – –
Analysis by New Economics Foundation says lost jobs are a £1.5bn cost to GDP
The DIY chain Homebase is expected to reveal the closure of up to 80 stores this week as job losses from Britain’s high streets total more than 30,000.
Homebase is battling for survival amid a slowdown in the housing market as well as rising costs and increasing pressure from online rivals and discounters such as B&M.
It wants to exit loss-making stores and agree to rent cuts ahead of a rent bill due in late September.
The closures will add to the mountain of job losses on Britain’s high streets. About 25,000 jobs have gone in the first seven months of 2018, according to analysis by the New Economics Foundation (NEF), with a further 8,300 jobs under threat at suppliers.
The figures, which include those at risk of imminent redundancy as well as workers who have already lost their jobs, adds up to £1.5bn in lost GDP, said NEF’s report.
At the weekend, seven Marks & Spencer clothing stores closed their doors for the last time as the high-street chain pushes ahead with a transformation plan.
M&S said in May it plans to close 100 stores by 2022.
Toys R Us, Poundworld and Maplin have collapsed, while New Look, Mothercare, Marks & Spencer and Carpetright have disclosed plans to close hundreds of stores as weak consumer confidence is compounded by the online shopping boom.
Alfie Stirling, head of economics at the NEF, said: “The shape of our economy is beginning to flex and buckle in response to powerful structural forces such as weakening household spending power and a shift in consumer behaviour towards online purchasing.”
Meanwhile, House of Fraser employees and pensioners are nervously awaiting more details about their future. The £90m rescue deal by Sports Direct, the sportswear chain controlled by Mike Ashley, will protect 16,000 jobs for the time being.
At age 20, professional gamer Michael Schmale had it all: a steady salary, a team mansion overlooking Hollywood and a chef, personal trainer, coach and team manager who were all there to help him play at his best. But the job came with plenty of uncertainties too. This is a series about careers of the future hosted by Bloomberg Technology's Aki Ito.
Video by David Nicholson and Victoria Blackburne-Daniell
(qlmbusinessnews.com via theguardian.com – – Sun, 12th Aug 2018) London, Uk – –
The bargain chain is due to close the last of its 335 stores this week. What happened to the chain’s unstoppable rise?
Last week at the doomed branch of Poundworld in Lewisham, south-east London, toothbrushes for dogs – reduced to 70p – were lying opposite reading glasses for 50p. One-litre bottles of antifreeze were still £1, but the 2017 Justin Bieber annuals, piled up like discarded pizza boxes, were down to 50p after an initial drop to 75p failed to shift them. Telescopic fishing nets were also selling slowly. Elsewhere, shelves were bare. These were for sale, too: notices taped to the shop windows advertised the fixtures and fittings. Wire “dump bins”, in which products were once piled high, were going for £10.
This was one of the last Poundworld branches still clinging to life. Last month, Deloitte, which has run the chain since it went into administration in June, announced that all 335 shops would be gone by the end of this week, along with the last of more than 5,000 jobs. At lunchtime last Tuesday, the man behind the till in Lewisham didn’t know exactly when the end would come. “They’re saying next week, but it could be tomorrow,” he said as I paid 80p for a phone charger cable and a pack of 50 plant ties.
In 2012, when this branch replaced a Peacocks clothes shop on a prime stretch of Lewisham’s bustling high street, the chain was riding high. Four years after the global financial crisis, the retail sector was quaking under an onslaught of discounters. As real incomes were squeezed, the fixed-price chains with their “everything for £1” model were primed to take advantage, offering an Aladdin’s cave of homeware, groceries and trinkets. Just two years ago, Poundworld was opening a new store every week after a £150m takeover by TPG, a US-based private equity group.
Pound chains held a certain fascination beyond their pricing and multiplicity of wares. This week, Saving Poundstretcher, a new series on Channel 4, began following the mixed-price discount chain, as its owner, Aziz Tayub, tried to revive it. In a case of awkward broadcast timing, the man we see Tayub bringing in to oversee the turnaround is Chris Edwards, the former market trader who launched and ran Poundworld until 2015, but failed to rescue it last month. He left Poundstretcher in April this year.
In 2015, a BBC documentary, Pound Shop Wars, followed the rivalry between Poundworld and the bigger Poundland chain. What happened to Poundworld, which until so recently seemed unstoppable? And what can its rise and fall tell us about the forces that have shaped the high street in the past three decades? Deloitte declined to discuss Poundworld, but the story of its creation can be gleaned from In for a Pound, Edwards’ 2015 autobiography. It charts the lives of a family of travelling showmen who began to drift away from the fairground when Edwards bagged the prime stall on Wakefield market in 1968, when he was 18. In 1974, he opened his first homeware shop in the West Yorkshire town and called it Bargain Centre. Other stores followed, while Edwards also moved into the nightclub business.
In 1994, Edwards saw an opportunity in the fixed-price pound shop idea. He was inspired by the early success of Poundland, which had been co-founded in 1990 by former West Midlands market trader Steven Smith (who was in turn inspired by the creation of the pound coin in the 80s). Edwards, who worked with his brother Laurie (his son, Chris Edwards Jr, also later became a senior executive), renamed his six Bargain Centre stores “Everything’s £1” and watched takings rise.
It was not exactly a new concept. In 1884, a Polish-Jewish migrant called Michael Marks opened Penny Bazaar in Leeds. His slogan was: “Don’t ask the price, it’s a penny”. Marks joined Tom Spencer, a bookkeeper, and, by 1900, Marks & Spencer had 36 Penny Bazaars. Eventually, the pair began moving away from fixed pricing and began trading under their own names. Woolworths started in a similar vein – when the chain arrived in Britain from the US in 1909, almost all its products were priced at threepence or sixpence.
Yet fixed-price discounting then fell out of favour for several decades. Leigh Sparks, a professor of retail studies at the University of Stirling, partly blames retail price maintenance, a practice adopted in the 20s under which retailers agreed not to discount manufacturer prices. It was only abandoned in 1964. Other factors were the rising postwar affluence, followed by 70s inflation. “The consumer boom in the 1980s was also anathema to the model,” Sparks says, pointing to a lingering snobbery towards discounted goods in a decade of excess.
But by the 90s, Poundland and Everything’s £1 (which Edwards renamed Poundworld in 2003) could tap into a renewed appetite for simple, low prices. “We opened with 648 products and on the first day we took over £13,000,” Smith tells me in an email, recalling the first day of trading at the original Poundland in Burton upon Trent. (Smith sold the company for £50m to a US private equity firm in 2002. It has more than 700 stores and is now owned by Steinhoff International, a South African retail giant, after a separate £610m sale in 2016.)
“There was this feeling in British retail that we had gone through the building of cathedrals of consumption in the 1980s and the sector was moving up in quality and price,” Sparks adds, recalling the spread of shopping centres and supermarkets. “There was room underneath.” Notably, Aldi and Lidl arrived in Britain in the same years that Poundland and Everything’s £1 launched (in 1990 and 1994 respectively). Snobbery and old loyalties made growth gradual at first, Sparks says, but then China entered the equation. Edwards writes in his book of a trip to China in 1997: “I would see stuff I had bought from wholesalers in Britain for 55p and it would be for sale [in China] to us for 25p. It was exciting!” With the help of local agents, Edwards adopted the Poundland model of dealing directly with manufacturers, cutting out wholesalers.
Shoppers were excited, too. “There is this sense of freedom about walking into a pound shop,” says Alison Hulme, a lecturer in international development at the University of Northampton, who specialises in the sociology and history of consumerism, and wrote her PhD on pound shops. “You don’t feel you need to keep track of what you’re spending, because you just count the items in your basket.” There are no shocks at the till in a pound shop, nor any fumbling for coppers.
The chains lured supermarket shoppers with everyday goods and groceries, including some from bigger brands. You could go in for a drying rack and come out with a month’s supply of Heinz baked beans. In Poundworld’s Lewisham store, Kath Burton, a shopper in her 80s, told me: “I usually come in for things like fly killer.” This time, she had grabbed a wodge of glittered gift tags from the chaotic array of Christmas goods. (On the next aisle, the chain had brought out a load of Easter products, presumably retrieved from the corner of a warehouse.)
Then came 2008 and the economic downturn. Suddenly, bargain-hunting was more necessity than sport. Growth soared and the number of pound shops doubled between 2010 and 2016, according to the retail analyst the Local Data Company, when Poundland and Poundworld peaked with more than 1,000 stores between them. Valuable sites were opening on the high street: more than 130 former Woolworths stores were taken over by fixed-price discounters after the chain failed in 2008. As Edwards’ brother Laurie writes in one chapter of In for a Pound: “Before the tough times, the powers that be didn’t want pound shops in town centres – I think they thought we lowered the tone.”
That all changed after the financial crisis and the stores began to welcome affluent shoppers. In 2009, Poundland recorded a 22% rise in customers from the highest wealth bracket, AB. That year, Poundland’s CEO, Jim McCarthy, told the BBC: “I remember going to dinner parties a few years ago where the topic of conversation was how much the value of their house had gone up. Those days have gone. Now it’s about how much money they’ve saved on their purchases.”
As it grew, Poundworld tried to pass down its family-run ethos to shop floors. “It’s really hard to explain it to the outside [world],” says one former Poundworld store manager, who prefers not to be named, days after handing over the store’s keys. “I started doing weekend shifts out of school and worked my way up. I absolutely loved working there, and that definitely came from the top. My team still has a WhatsApp group and even now everyone still says ‘Good morning’ and ‘Goodnight’ to each other.”
But the economic environment in which Poundworld had flourished was tightening. Competition became fierce with the growth of other big names in discounting, including B&M, Home Bargains and Savers, and supermarkets hit back with their own discount lines. Some of the challenges have been universal – online competition, rising rents, business rates and wage bills among them – but margins are particularly tight for pound shops. When the pound drops in value, as it did after the Brexit referendum, or the cost of goods rises with inflation, other stores can raise prices in an instant. Pound shops have to be smarter.
At one point, Poundland almost had to stop stocking reading glasses, one of its biggest sellers. “We had to work very hard with our supplier,” says Nick Agarwal, a consultant at the chain. “They took out metal parts from the spring hinge in the arms and changed production to produce the plastic in each pair in one go.” In 2013, Edwards Sr travelled to a factory in China to look at bras, an item typically out of Poundworld’s reach. By reducing the amount of elastic and switching to a cheaper material, Edwards was able to make the price work. He ordered half a million £1 bras on the spot, worked up a smart press release and sold them in days.
“Shrinkflation”, whereby bags of Maltesers lose a few grams or a set of pencils a few, well, pencils, is another tactic. The pound chains work directly with manufacturers to tweak packaging and weights. Customers don’t always like it, a response Poundland seized on in 2016 when Mondelez, which makes Toblerone, increased the gaps between the chocolate bar’s Matterhorn-like pieces. Months later, Poundland, which had sold 12m Toblerones a year, created Twin Peaks, a familiar bar with no gaps and two peaks in each piece. (It was inspired by the Wrekin and Ercall hills in Shropshire, not far from Poundland’s headquarters, the chain said.) Now that a legal dispute with Mondelez as bee setteled , Agarwal says, Twin Peaks will replace Toblerone later this year.
Thanks to its greater size, Poundland, which has so far managed to ride out the retail storm, had more power than Poundworld to negotiate and manage these changes – and fast. But both chains were also struck by volatility in currency exchange rates, especially when they buy in bulk, often in US dollars. Moreover, one can only fit so much into a pound shop basket, making it difficult to profit from each customer. One way past these obstacles has been to inch away from the fixed-price model, as Marks & Spencer did a century ago. Last year, Poundland introduced 50p, £2 and £5 ranges (although Agarwal says 90% of stock is still £1) and began offering Pep&Co clothing ranges without fixed prices. (Pep&Co launched in 2015 and shares the same parent company.) The key, Agarwal says, is to preserve the clarity of pricing.
The unnamed former Poundworld store manager says the first sign of trouble came when the chain changed its own prices in 2016. “Each week we would be rolling out new shelving bays as ‘manager’s specials’, where prices were written by hand,” the former manager says. “Customers would say: ‘I thought this was supposed to be a pound shop.’” Yet Poundworld was already fixated on growth, desperate to bolster its footfall and purchasing power. It opened a vast new distribution centre in 2016. “Expansion is definitely on our minds,” Edwards Jr wrote in his contribution to his father’s book. “We have research showing there’s definitely room for hundreds more stores. Then we’ve got Europe and the question becomes: ‘Where do you stop?’” This summer, the answer came back.
There were several attempts to save Poundworld. The Edwards family tried, even after Edwards Sr had left the company in 2016. Even Smith, the Poundland founder, considered rescuing his old rival. Both men have accused Deloitte of not doing enough, but the administrator said it received no “credible and acceptable bid” for the chain. “It is very difficult to do a deal with a business that is in administration,” Smith says. Meanwhile, there are hundreds more empty stores on high streets.
As I browsed the chaotic aisles in Lewisham, a man armed with a clipboard was surveying the store for the landlord. “It’s absolutely massive for this location,” he said, also preferring not to be named. Finding a new tenant may not be easy.
The former Poundworld manager, who starts a new job this week, wondered about the state of the business earlier this year when the inventory on the store’s online ordering software began to shrink: “Groceries were going from 24 pages down to 12 and you were worried about filling the shelves.” As rescue attempts failed last month, staff knew it was over. The closing-down sale and clear-out were “heartbreaking … I really struggled to get through it,” the manager says. “It has been like a bereavement. We were tired and we had given this store everything.”
(qlmbusinessnews.com via bbc.co.uk – – Sat, 11 Aug 2018) London, Uk – –
Reggie Nelson was fed up with the world around him after his dad died. An inspirational chat led to Reggie deciding to take a risk knocking on the doors of the wealthy to find out how they amassed their wealth. One day a door opened.
(qlmbusinessnews.com via theguardian.com – – Fri, 10 Aug 2018) London, Uk – –
Chief executive Robert Thomson highlights growth at UK mastheads Times and Sunday Times, and Australian digital subscriptions rise 12%
Rupert Murdoch’s News Corp has shrugged off its latest annual loss with an upbeat assessment of its digital news and real estate assets.
The worldwide publishing group reported a net loss of US$1.4bn for 2017/18, which was worse than the previous year’s US$643m.
But the result was skewed by accounting writedowns, including US$998m for the consolidation of Foxtel and Fox Sports in Australia.
Robert Thomson, the chief executive, said the group had gone through a year of “operational and transformational success” and pointed to revenue growth in its online real estate businesses such as realestate.com and its book publishing division led by Harper Collins.
“We also saw meaningful operational improvements at the news and information services segment led by higher digital paid subscribers and disciplined cost initiatives, notably in Australia,” he said in a statement on Friday.
He highlighted the growth of digital paid subscribers at UK mastheads such as the Times and the Sunday Times, and hailed strong growth at the Wall Street Journal. He did not mention the group’s titles in Australia, such as the Australian and the Herald Sun had performed, but the earnings report to the stock market said that digital subscriptions in Australia had increased to 415,600 compared from 363,600 in the year prior.
Revenue from the group totalled US$9.01bn, up 11%, while earnings before interest tax and depreciation hit US$1.07bn, up 21%.
“Digital real estate services continues to flourish,” Thomson said, pointing to a 19% rise in revenue for the last quarter helped by a strong showing in the Australian business, REA Group.
“HarperCollins’ success underscores the importance of intelligent editors and great writers in creating premium content. Algorithms are, as yet, unable to write empathetic, compelling books.”
Five years ago News Corp underwent a restructure that saw its entertainment assets spun off into a separate company from its publishing businesses, including Harper Collins.
“We are marking five years since our separation and are confident News Corp has a lustrous future, built on a strong digital and global foundation,” said Thomson.
(qlmbusinessnews.com via telegraph.co.uk – – Thur, 9th Aug 2018) London, Uk – –
Ryanair has been plunged into a fresh crisis after German pilots joined colleagues across Europe in a wave of coordinated strike action timed to cause maximum disruption to summer getaways.
One sixth of Ryanair’s flights, nearly 400 in total, are due to be grounded on Friday, disappointing tens of thousands of customers at the height of the holidays.
German pilots announced a 24-hour walkout on Wednesday. They joined industrial action previously planned by Ryanair pilots in Ireland, Sweden and Belgium. VNV, the Dutch pilot union, is also considering a walkout.
Vereinigung Cockpit, the German pilots’ union, said it hoped the strikes would force Ryanair “to compromise with us and enter serious negotiations” over pay and conditions.
Ryanair pilots claim that their salaries are made up of an unusually high variable component based on how much they fly.
They argue their pay can drop dramatically as a result of issues that are outside of their control, for instance through prolonged bouts of illness. Pilots are also frustrated with being moved across Ryanair’s network of 223 airports in 37 countries at short notice.
Vereinigung Cockpit negotiator Ingolf Schumacher said: “Pilots are not nomads who put up tents wherever Ryanair wants to operate.”
Ryanair chief operating officer Peter Bellew rejected the German pilots’ main demands but left the door open to negotiation.
He said: “We are not going to change the Ryanair business model… but we still can change many things that we do.”
Ryanair said German pilots received a 20pc pay rise at the turn of the year and can take home up to £171,000.
City analysts said the outcome of dispute and its impact on tight staff cost control will be crucial for Ryanair as it battles to maintain profits that are the highest of any budget carrier in Europe. The airline is also battling cabin crew and has been forced to cancel thousands of flights this summer due to French air traffic control strikes.
Liberum analyst Gerald Khoo said: “Ultimately Ryanair have to win this battle.
“They can’t get into a situation allowing any individual union to shift working practices back to the position of legacy carriers. If you give in to one then the others will have a go.
“Ultimately maintaining its focus on low-cost efficient, productive working practices is quite core to how Ryanair makes a profitable airline.”
Robin Byde, an analyst with Cantor Fitzgerald, said Friday’s concerted action will mark an escalation tensions between Ryanair and its staff.
“There is rising militancy across the group. And at the moment that is not going to change,” he said.
“You’ve seen this with Air France… what prolonged periods of strike action do is that they undermine consumer confidence within booking with that airline. It has a knock-on effect over the next three to six months.
“Once that thinking gets ingrained, then you are in trouble.”
Martyn James of consumer group Resolver said: “There’s no doubt that strike action on this scale at the peak of the holiday season can hit an airline hard but Ryanair isn’t likely to give in easily, though it may pay a high price both financially and with consumer loyalty.”
Ryanair chief marketing officer Kenny Jacobs said the airline “regretted” the German action and it had invited Vereinigung Cockpit to negotiations on Tuesday, “but they did not respond to this invitation”.
Mr Jacobs added: “We again call on the VC to remove the threat of an unjustified and unnecessary strike, to commit to providing reasonable (7 days) notice of strike action and to accept our invitations to meet for meaningful negotiations on a collective labour agreement for our German pilots and minimise disruption to German customers.”
(qlmbusinessnews.com via uk.reuters.com — Thur, 9 Aug, 2018) London, UK —
LONDON (Reuters) – British house prices edged up last month as widespread falls in London weighed on gains further north, while smaller landlords quit the rental sector due to less favourable tax treatment, a survey showed on Thursday.
The Royal Institution of Chartered Surveyors’ (RICS) monthly house price balance rose to +4 in July from an upwardly revised +3, in line with economists’ forecasts in a Reuters poll.
Prices in Scotland, Northern Ireland and most of central and northern England rose, while prices in London fell broadly — though not as widely as earlier in the year — and prices in other parts of southern England and in Wales were flat.
Property priced at over 1 million pounds ($1.29 million) — which is common only in London and nearby areas — was the most likely to see discounts of 10 percent or more on its asking price. Houses advertised for under 500,000 pounds typically sold at or slightly above their asking price.
The price trends are similar to those reported by others such as mortgage lender Nationwide, which said prices nationally rose by 2.5 percent in the year to the end of July.
Somewhat faster price rises are expected by surveyors over the next 12 months, but sales volumes are seen falling at the fastest rate since October. Estate agents have few properties to sell, and there has been no pick-up in prospective sellers.
By contrast, RICS members reported a sharp fall in new rental instructions from smaller landlords, who are losing the ability to deduct mortgage interest and many other expenses from their tax bills, and also face higher purchase taxes.
“The impact of recent and ongoing tax changes is clearly having a material impact on the buy-to-let sector as intended. The risk … is that a reduced pipeline of supply will gradually feed through into higher rents,” RICS chief economist Simon Rubinsohn said.
RICS predicted a 2 percent increase in rents over the next 12 months and a 15 percent rise over a five-year period. Average rents rose 0.4 percent over the past year, official data shows.
Former finance minister George Osborne set out initial changes to the taxation of smaller landlords in 2015 to boost falling home-ownership rates. Commercial landlords who own several properties via an investment company are less affected.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 8th Aug 2018) London, Uk – –
British Gas is to increase prices for 3.5 million customers, its parent company Centrica has announced.
The 3.8% increase in its standard variable tariff (SVT) from 1 October means the average bill will rise by £44, taking it to £1,205 a year.
This is the second increase this year, but Centrica said wholesale energy prices had risen since the last time.
The SVT was withdrawn for new customers in March and 2.4 million customers on fixed rates are unaffected.
The company, the biggest energy supplier in the UK, said its average bill was still “just below” the average of other large energy suppliers.
“We understand that any price increase adds extra pressure on customers' household bills. However, this reflects the sharp rise in wholesale energy costs,” said Mark Hodges, chief executive of Centrica's consumer arm.
Wholesale prices higher
E.On, SSE, Npower, EDF, ScottishPower and Bulb have all hiked energy prices, blaming wholesale energy costs for the increases.
Ofgem has also announced it is raising its pre-payment meter cap – which protects vulnerable customers – from October.
Centrica said that until now, it had protected customers from price rises in the wholesale energy market, because it buys its supplies in advance.
It quoted figures showing that since April, gas prices had increased by 21% and electricity prices by 18% in the wholesale market.
Mr Hodges said British Gas was trying to focus on putting customers on fixed-price deals rather than the SVT.
While the company has 3.5 million customers on the SVT, this is down from 4.3 million at the start of the year. It expects to have reduced the number to three million by the end of this year.
Customers who do not pick a new tariff when they come off fixed-rate deals are now put on its new temporary tariff, which will also increase by 3.8% from 1 October. British Gas said a typical dual-fuel customer would pay £1,180 on this tariff. It has 250,000 customers on this tariff.
In July, the company said it had lost 340,000 customer accounts in the first half of the year, which was partly blamed on its low ranking in best-buy tables.
Consumers on the SVT were urged to switch providers. “Millions will be rightly furious with British Gas when they hear of yet another price hike. But customers need to turn that anger into action,” said Guy Anker, deputy editor of MoneySavingExpert.com.
When British Gas announced its earlier 5.5% increase in prices in April, energy minister Claire Perry said the move was “unjustified”.
Musk tweets plan as it emerges Saudi Arabia has built up $2.9bn stake in tech giant
Elon Musk has launched a campaign to take Tesla private on a day that included several provocative tweets, a suspension (and resumption) of trading in the company’s shares, reports of a significant Saudi investment, a surge in stock price, and an evocative, Musk-tinged appeal to the Tesla faithful: “The future is very bright and we’ll keep fighting to achieve our mission.”
The ride started with Tesla’s stock rising more than 7% after Musk tweeted he was “considering taking Tesla private” and had funding in place to do so at a price of $420 (£325) per share. Shortly afterwards, Tesla published a blogpost written by Musk entitled ‘Taking Tesla private’ that had been sent to all employees.
The tweet appeared to be triggered by a report in the Financial Times that Saudi Arabia has built up a stake in Tesla worth up to $2.9bn.
At $420 a share, Tesla would have an enterprise value of about $82bn including debt, well above its stock market value, which reached $63.8bn on Tuesday. Shares closed up 11% at $378. To take Tesla private, Musk would have to pull off the largest leveraged buyout in history, surpassing Texas electric utility TXU’s in 2007. Analysts say Tesla doesn’t fit the typical profile of a company that can raise tens of billions of dollars of debt to fund such a deal.
In a follow up tweet, Musk wrote: “I don’t have a controlling vote now and wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either scenario.”
In the letter sent out to Tesla employees, Musk did not say that Tesla had secured funding. He wrote instead that “a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best”.
Musk described the “wild swings” in Tesla’s stock price as a “major distraction” and said the quarterly earnings cycle puts “enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term”.
But Musk rejected the interpretation that he was simply seeking greater wealth or control of the company than the 20% he already owns. He wrote: “Basically, I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible.”
Saudi Arabia’s public investment fund (PIF), which invests its vast oil wealth, has quietly built up a stake of between 3% and 5% in the company, according to the FT. The investment would not have emerged until now because stakes of less than 5% do not need to be disclosed to the stock market.
PIF, which manages more than $250bn in assets, reportedly made an overture to Musk earlier this year, offering to invest money in the company in return for new shares.
Tesla ignored the approach, prompting PIF to begin acquiring shares in the company through stock markets, with the assistance of JP Morgan.
Analyst Gene Munster, a managing partner at venture capital firm Loup Ventures, told Bloomberg: “Elon Musk does not want to run public companies. His missions are big and make it difficult to accommodate investors’ quarterly expectations. Our guess is there is a one-in-three chance he can actually pull this off.”
No Wall Street bank contacted by CNBC said it was aware of any transaction or had any knowledge of commitment to funding a leveraged buyout of Tesla.
The Securities and Exchange Commission (SEC) also declined to comment on the matter.
The confusion increased speculation that Musk was engaged in a stunt – which could backfire if Musk is found to have violated fiduciary directives governing how senior executives at publicly-held companies are permitted to release information that could affect a firm’s stock price.
In 2013, the SEC ruled that companies are allowed to use social media outlets like Facebook and Twitter to announce news. But many thought Musk could be making a pun by twice tweeting “420” – an abbreviation of 4/20, code for the consumption of cannabis.
Musk’s fondness for making statements via Twitter has backfired in the past. He attracted furious criticism after baselessly calling a British diver who helped rescue the boys trapped in a flooded cave in Thailand a “pedo”. Tesla’s share price dropped and Musk was forced to apologise.
(qlmbusinessnews.com via news.sky.com– Tue, 7th Aug 2018) London, Uk – –
Billionaire Stan Kroenke's deal to take full control of Arsenal has been slammed by the club's supporters' trust, who say it represents a “dreadful” day for the Premier League side.
Mr Kroenke, who owns the Los Angeles Rams American football team and the Denver Nuggets basketball team, has offered to buy out rival billionaire Alisher Usmanov's 30% stake to take full control.
The deal values the north London club at £1.8bn.
In order to fund the deal, Mr Kroenke will pay £45m in cash and take a £557m loan from Deutsche Bank.
After details of the agreement emerged, the Arsenal Supporters' Trust said it was “wholly against this takeover”.
A statement from the group said: “Stan Kroenke taking the club private will see the end of supporters owning shares in Arsenal and their role upholding custodianship values.
“The most dreadful part of this announcement is the news that Kroenke plans to forcibly purchase the shares held by Arsenal fans.
“Many of these fans are AST members and hold their share not for value but as custodians who care about the future of the club.
“Kroenke's actions will neuter their voice and involvement.
“The AST is wholly against this takeover. Arsenal remains too important to be owned by any one person.”
Mr Kroenke, who owns 67.09% of Arsenal through KSE UK, has received “an irrevocable undertaking” from Mr Usmanov to sell his stake in the club.
Mr Usmanov will receive £550m for his holding, based on the share price of £29,419.64.
Despite being the club's second-largest individual shareholder, Mr Usmanov had grown frustrated at not been given a seat on the board and has made several attempts at buying out Mr Kroenke's majority stake.
Mr Usmanov has been critical of Mr Kroenke's running of the club on and off the field. He blamed the US billionaire for the club's poor performance and lack of investment in players.
Arsenal finished sixth in the league and missed out on a place in the Champions League last season.
In May last year, Mr Usmanov made a $1.3bn (£1bn) offer to buy out his rival shareholder, but that was rejected.
In October, Kroenke Sports Enterprise UK (KSE) offered around £525m to buy the 18,695 shares held by Mr Usmanov's Red and White Securities Limited. That offer was declined.
Regarding his offer to take full ownership, Mr Kroenke said: “We at KSE are moving forward with this offer leading to 100% ownership of the club.
“We appreciate Mr Usmanov's dedication to the Arsenal Football Club and the storied ethos and history the club represents.
“KSE believes moving to private ownership will bring the benefits of a single owner better able to move quickly in furtherance of the club's strategy and ambitions.
“KSE is a committed, long-term owner of the club.”
The deal comes at a crucial time for the club, which embarks on life without long-time manager Arsene Wenger, who stepped down in April after 22 years in charge.
Unai Emery has been charged with returning the Gunners to the summit of the league but he faces stiff competition from Pep Guardiola's Manchester City, Jurgen Klopp's Liverpool and Jose Mourinho's Manchester United.
(qlmbusinessnews.com via telegraph.co.uk – – Tue, 7th Aug 2018) London, Uk – –
The founders of Fever-Tree are toasting a £103.5m payday, after confirming the sell-off of another tranche of shares in the mixer maker.
Charles Rolls, non-executive deputy chairman, sold two million shares, while Tim Warrillow, chief executive, sold one million shares, leaving them will stakes of 7.1pc and 4.7pc respectively.
The shares were sold at a price of £34.50, landing Mr Rolls £69m and Mr Warrillow £34.5m.
The two men decided to exercise options over 275,820 shares each at a price of 134p per share, in order to source some of the shares being sold in the placing, meaning they will pay out around £370,000 each.
Mr Rolls and Mr Warrillow remain the fourth and eighth largest shareholders in Fever-Tree.
Shares in the company fell 4.2pc to £35.35 in early trade on Tuesday.
Initially, Mr Rolls and Mr Warrillow said they planned to sell off a total of two million shares.
During previous placings, the number of shares sold has been vastly different to the number originally intended, having almost doubled twice, due to significant demand for the stock.
This has meant the pair's holdings in Fever-Tree have notably shrunk. Since the end of 2015 to Monday night, prior to the most recent placing, Mr Rolls has sold just under 10 million shares and Mr Warrillow 2.5 million.
Mr Warrillow told The Daily Telegraph last year that he had sold down his stake as “you have to look at these things depending on the situation”.
The new share sales come as Fever-Tree's growth shows no sign of letting up. The company two weeks ago revealed its revenues had soared 45pc to £104m in the first half of 2018, driving profit 36pc higher.
Fever-Tree said it was continuing to benefit from the “well-established ‘premiumisation’ trend across the wider beverage sector as well as the movement to long mixed drinks”.
The positive results are just the latest in a string of upbeat updates from Fever-Tree, lifting shares 61pc in the year-to-date.
They have increased in price pretty much consistently since Fever-Tree floated in 2014, and shares now trade more than 2,600pc higher than Fever Tree's 134p initial public offering price.
Fever-Tree was the top mixer brand in shops last year, the bulk of its sales coming from tonic water.
However, it has recently branched out to offer mixers which could go with “dark spirits” such as dark rum and whiskey and, earlier this year, signed a deal with North America's largest wine and spirits distribution company, Southern Glazer's Wine and Spirits.
(qlmbusinessnews.com via uk.reuters.com — Mon, 6th Aug 2018) London, UK —
HONG KONG/LONDON (Reuters) – HSBC Holdings Plc (HSBA.L) posted a small increase in first-half pretax profit, as rising expenses from investments in a new growth strategy and a $765 million settlement for alleged mis-selling of U.S. mortgage securities ate into higher revenues.
Shares in Europe’s biggest bank dipped in London as investors and analysts await clearer signs of progress in the new HSBC management’s strategy of shifting into growth mode after years of shrinking its global empire.
HSBC reported on Monday a pretax profit of $10.7 billion in the six months through June, up 4.6 percent from the year-ago period.
As the bank spent on hiring more frontline staff and expanding digital capabilities, its costs climbed 6 percent to $17.5 billion.
“HSBC is struggling to convince that its current restructuring to pivot the group toward Asia is delivering the hoped for pick-up in growth,” said Steve Clayton, manager of the Hargreaves Lansdown UK Income Shares fund.
HSBC Chief Executive John Flint, who started in the job in February, set out a three-year plan in June to invest $15-17 billion in areas such as technology and in China.
“We are taking firm steps to deliver the strategy we outlined in June. We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns,” Flint said in a statement.
Flint is part of a new management duo at the top of HSBC after Mark Tucker joined as chairman last October.
The main points of the bank’s refreshed strategy came as little surprise to HSBC investors, with the focus squarely on further expansion in China and its prosperous southern Pearl River Delta region in particular.
The bank is also seeking to expand further in the British mortgage market as one of eight new strategic targets.
Pretax profits for the first half from Asia jumped 23 percent to $9.4 billion, representing 88 per cent of the group total.
The bank has not seen any impact yet either on its own performance or that of its customers from rising U.S.-China trade tensions, Flint said, but is concerned about how tit-for-tat tariffs could affect investor confidence.
“I’d be concerned the general rhetoric has a bad impact on investor sentiment and investors go risk-off,” Flint told Reuters.
HSBC’s retail banking and wealth management, and commercial banking divisions performed most strongly in the first half, Flint said, adding both continued to gain from a positive interest rate environment.
The bank’s strong performance in its core Asian markets was marred by tumbling profits elsewhere.
HSBC said it has set aside $765 million to resolve a civil claim by the U.S. Justice Department over allegations the bank missold toxic mortgage-backed securities in the run-up to the 2007-8 financial crisis.
The settlement wiped out almost all of the bank’s profits for the first half of the year in North America, where it is trying to turn around a U.S. business that has for years underperformed.
Part of that plan includes a push into the U.S. credit card and personal loans market, where it faces a battle against heavily entrenched domestic competition.
Flint told Reuters it is too soon to see any results from that new strategy.
HSBC’s shares are unlikely to climb significantly until the bank can show its revenues rising above increased costs, analysts and trader said, describing a trend known as ‘positive jaws’ in city parlance.
“Our business plans do see us get to positive jaws at the end of the year,” Flint told analysts on a conference call, citing the benefits of rising interest rates on the bank’s profits as one contributor to that outlook.
(qlmbusinessnews.com via bbc.co.uk – – Mon, 6th Aug 2018) London, Uk – –
House of Fraser has settled a legal row with a group of landlords removing one hurdle to a potential rescue deal.
The deal means the department store chain can go ahead with its plan to close 31 of its 59 shops in January.
The landlords had argued slashing rents on remaining stores was unfair to them, putting the rescue plan in jeopardy.
However, the deal will not be enough to safeguard House of Fraser's future, with it now urgently seeking fresh investment in order to survive.
House of Fraser said it was now “focused on concluding discussions with interested investors” and the out-of-court settlement with the landlords had removed “any risk to those discussions”.
Potential suitors for the chain include Philip Day, owner of Edinburgh Woollen Mills, and whose retail empire includes Peacocks, Jane Norman, Austin Reed and Jaeger.
Sports Direct boss Mike Ashley, who already owns an 11% stake in House of Fraser, also approached the chain in July over a potential investment deal.
Mr Ashley is understood to have not communicated with House of Fraser's financial advisers' Rothschilds since then, and The Sunday Times has suggested he is unlikely to proceed with a rescue deal due to concerns over the chain's pension funds.
However, industry insiders say House of Fraser's two defined-benefit pension funds are fully funded.
Other names in the frame as possible saviours include investment funds Alteri, an offshoot of US hedge fund Apollo, and Hilco, both of which specialise in buying up troubled firms and turning their performance around.
The chain's future has been thrown into doubt after Hong Kong-listed C.banner, owner of Hamleys, pulled out of plans to take control and invest £70m in the retailer.
‘Matter of weeks'
Richard Lim, boss of independent research consultancy Retail Economics, says it is still “hard to know with any certainty just what will happen next at House of Fraser.”
“But it is in desperate need of a rescue package. Without any external funding it is inevitable it will fall into administration.
“Funding will have to be in place within a matter of weeks, rather than any longer period, if House of Fraser is to have a fighting chance to ensure its future.”
The retailer employs 17,500 people – 6,000 direct and 11,500 concession staff.
House of Fraser is using company voluntary arrangements (CVAs), a form of insolvency proceedings, to overhaul its business.
CVAs are being increasingly used by struggling retailers as a way to close stores, but landlords argue that they are being abused as a quick way to cut rents.
Mark Fry of Begbies Traynor and Charlotte Coates of JLL, who advised the group of House of Fraser landlords throughout the CVA process and subsequent legal challenge, said they were pleased with the settlement.
“The retail CVA process in the UK has become increasingly misused and prejudiced against landlords and needs correcting.
“CVAs were designed as a means to rescue a business, not simply a tool to shed undesirable leases for the benefit of equity shareholders,” they added in a statement.
House of Fraser is one of a number of retailers struggling amid falling consumer confidence, rising overheads, the weaker pound and the growth of online shopping.
Electronics chain Maplin and toy chain Toys R Us both collapsed into administration earlier this year.
Other High Street chains such as Mothercare and Carpetright have been forced to close stores in order to survive.