Toys R Us UK goes into administration with potential loss of 3000 jobs

 


(qlmbusinessnews.com via bbc.co.uk – – Wed, 28 Feb 2018) London, Uk – –

Toys R Us has gone into administration, putting 3,000 UK jobs at risk.

Administrators have been appointed to begin “an orderly wind-down” of the UK's biggest toy retailer following the failure to find a buyer.

They said that all 105 Toys R Us stores will remain open until further notice.

Joint administrator Simon Thomas said: “Whilst this process is likely to affect many Toys R Us staff, whether some or all of the stores will close remains to be decided.”

Toys R Us has been facing a £15m tax bill. However, poor sales have made it unlikely that it can make the payment.

Mr Thomas said: “We will make every effort to secure a buyer for all or part of the business.

“The newer, smaller, more interactive stores in the portfolio have been outperforming the older warehouse-style stores that were opened in the 1980s and 1990s.”

The UK arm of Toys R Us – its US owner filed for bankruptcy protection last September – managed to stave off administration in December after it struck an agreement with the Pension Protection Fund (PPF) to inject £9.8m into its retirement scheme over three years.

The tally of job losses may worsen if Maplin, the electronics retailer, also files for administration.

Maplin employs 2,500 workers and has been attempting to find a buyer for the struggling business, but it is understood that talks with a potential suitor have now broken down.

Julie Palmer, regional managing partner at professional services firm Begbies Traynor, said Toys R Us had “fallen foul of a perfect storm hitting bricks-and-mortar retailers across the board”.

She said: “Rising costs from the National Living Wage, apprenticeship levy and inflation, combined with ongoing pressure on consumer spending and the continued rise of the internet are hitting retailers with a big High Street presence hard.”

Analysis: Emma Simpson, business correspondent

Retail is tough right now, even for the strong players.

Toys R Us has made a loss seven out of the last eight financial years. It is a subsidiary of a US business which has been drowning in billions of dollars of debt.

Financially weak, Toys R Us has been unable to adapt to changing shopping habits.

These days, many shoppers don't want or need to drive 20 minutes to a big out-of-town warehouse to buy toys.

Costs have been rising for all retailers and consumer demand has been softening. It's a combination which is putting pressure on many retailers and the weaker ones are particularly exposed.

Toys R Us was once the disrupter, a so-called category killer. Now many are wondering if it can survive in the UK and in what form.

What does this mean for shoppers?

A large sale of remaining products at Toys R Us is expected. The administrators said this would happen in stores only, as the online service and click-and-collect will be closed immediately.

Shoppers who have ordered an item already on click-and-collect can still pick it up, but only if that item is still available in stock.

Anyone with Toys R Us gift cards and vouchers should spend them in stores as soon as possible before the shops are closed down. No more gift cards will be sold.

The retailer had a “take time to pay” service, which allowed customers to reserve a product and then pay for it gradually for 12 weeks, before picking it up. The administrators said these reservations would be honoured, provided that the outstanding balance was paid and the goods collected by 11 March.

Alternatively, customers can use their deposits towards the cost of any other item bought in a store by 11 March.

 

 

Amazon  to buy video doorbell maker Ring in $1bn deal

(qlmbusinessnews.com via independent.co.uk – – Wed, 28 Feb 2018) London, Uk – –

Ring is set to be one of Amazon’s most expensive takeovers

Amazon has agreed to buy video doorbell maker Ring, the companies said on Tuesday, in what analysts see as a growing bet on delivering packages inside of shoppers’ homes and on home security.

The deal valued Ring at more than $1bn (£719m), a source familiar with the matter told Reuters. Amazon declined to discuss the terms.

Ring is set to be one of Amazon’s most expensive takeovers, after its $13.7bn deal last year for Whole Foods.

The world’s largest online retailer believes that selling internet-connected gadgets from Kindle e-readers to its new Cloud Cam will spark more shopping on Amazon. Ring offers the company a popular consumer electronics brand that it might not have replicated internally.

More importantly, Ring’s security devices could work well with Amazon Key, a smart lock and camera system that lets delivery personnel put packages inside a home to avoid theft or, in the case of fresh food, spoiling.

“As Amazon moves more aggressively into the grocery delivery space… we believe smart security devices will be an important factor in driving user adoption,” Baird Equity Research analyst Colin Sebastian said in a note.

Amazon’s Alexa Fund, which offers venture capital to companies working on voice technology, invested in the Santa Monica, California-based Ring.

Currently, Ring devices can integrate with Amazon’s voice-controlled assistant Alexa. Users of Amazon’s Echo Show device can say, “Alexa, show my front door” to receive a live feed of activity around their home via Ring cameras.

The deal creates potential for much more, analysts said.

“Amazon more than Ring can revolutionise home security,” Wedbush Securities analyst Michael Pachter said.

US security and alarm company ADT could be the biggest loser, he added. Ring’s “camera technology is far superior to physical security … With Amazon having roughly 100 million Prime members, that’s a big addressable market for them to start selling this into.”

Shares of ADT fell more than 2 per cent after the news to close at $11.60. Amazon stock closed down 0.7 per cent.

Amazon was working on a competing smart lock with camera prior to the deal, according to a separate person familiar with the matter. Its decision to buy Ring underscores the task startups have trying to win in the home security space.

“For consumer businesses, it’s going to be challenging to compete with folks like Google and Amazon,” said Luke Schoenfelder, chief executive of Latch, which sells smart lock systems to apartment building owners.

Amazon acquired the maker of Blink home security cameras for about $90m late last year, Reuters reported.

 

 

 

 

Rupert Murdoch outbid by Comcast with £22bn offer for Sky

(qlmbusinessnews.com via telegraph.co.uk – – Tue, 27 Feb 2018) London, Uk – – 

The US cable goliath Comcast has gatecrashed the Murdoch family’s bid for full control of Sky with its own more generous offer to create a vast transatlantic media empire.

Comcast unveiled a £12.50 per share cash offer, gazumping 21st Century Fox’s £10.75 bid by 16pc. Sky shares immediately shot up to more than £13 in anticipation of a bidding war.

Comcast’s move threatens to derail not only the Fox bid but also to throw a spanner in the works of Rupert Murdoch’s plan to sell Sky on to Disney as part of a $60bn asset sale. It is due to mark the media mogul’s retrenchment and Disney chief executive Bob Iger has labelled Sky the “crown jewel” of the deal.

Comcast’s bid values Sky at £22.1bn. The cable operator, which has a stock market valuation of more than £130bn, said it had long admired Britain’s biggest pay-TV operator.

Chief executive Brian Roberts, who is part of Comcast’s founding dynasty and controls 33pc of its voting rights, said he had made his move after being impressed by Sky’s technology on a visit to Britain in November. Comcast was also swayed by the outcome of the recent Premier League rights auction, which eased Sky’s cost burden and sparked calls from non-Murdoch shareholders for a more generous bid.

Mr Roberts said: “The UK is and will remain a great place to do business. We already have a strong presence in London and Comcast intends to use Sky as a platform for our growth in Europe. We intend to maintain and enhance Sky’s business.”

Comcast said that in a show of its “seriousness” in bidding for Sky that it would be happy to acquire control through ownership of only just over half the shares. The proposed structure of the bid makes it possible that Fox could remain a major shareholder and sell its 39pc stake onto Disney, Mr Roberts said.

The bid is a test for Sky’s independent directors, led by deputy chairman Martin Gilbert and pitches the company into the heart of manoeuvres by three Hollywood titans as they navigate new threats from Netflix, Amazon and Apple. US cable operators have been suffering as consumers turn away from their traditional bundle of channels in favour of cheaper subscription streaming options.

As well as being the biggest broadband and pay-TV operator in the US, Comcast owns one of the main broadcast networks, NBC, and the film studio Universal. Comcast, Disney and Fox are also partners in Hulu, the subscription streaming service which Disney is due to take control of following its deal for a string of Murdoch assets.

Comcast has been considering how to expand its empire internationally since it was forced by monopoly concerns to abandon a bid for rival operator Time Warner Cable in 2015. The addition of Sky would increase the share of its revenues from international businesses from less than a tenth to a quarter.

Sky has also not been as damaged as US pay-TV operators by the rise of streaming.

Mr Roberts said: “We’ve got to keep growing. By having more scale both companies will be able to innovate and amortise the cost of that over a bigger base.”

Fox already owns 39pc of Sky and is in the late stages of seeking regulatory approval. It has  offered to “firewall” Sky News with an independent board and 10-year funding guarantee in an attempt to soothe concerns over Murdoch influence.

Mr Roberts said there would be no such regulatory wrangling with a Comcast takeover. He pledged to maintain Sky News and its broadcasting standards, as well as to invest in Sky’s technology divisions and production business.

Analysts said Fox is likely to respond with an improved bid.

Neil Campling of Mirabaud said: “Fox will have to sharpen their pencils now.

“There is no way we can see that Fox will walk away given how advanced the regulatory clearance process is. This bid marks a floor not an end to this particular saga. Let the battle commence.”

One City source suggested it was more likely that any response to Comcast's bid could come direct from Disney.

By 

 

 

 

Provident Financial shares up 87 per cent: How how the City reacted


(qlmbusinessnews.com via cityam.com – – Tue, 27 Feb 2018) London, Uk – –

Shares in Provident Financial jumped almost 90 per cent this morning, after the company unveiled its results for the year and confirmed a rights issue.

The company's shares were knocked down to a 22-year low yesterday on reports bankers were eyeing a £500m rights issue, however, today the doorstep lender said it would seek to raise £331m.

Side show

The results themselves were slightly better than expected at an adjusted pre-tax level, said Shore Capital's Gary Greenwood. However, he added: “These are a side show relative to the announcement of a settlement with the FCA in respect of its investigation into ROP (repayment option plan), for which a £172m provision has been made, along with an additional £20m to cover anticipated costs associated with the FCA’s investigation into Moneybarn. These are less than we had feared.

“To cover these and other costs, and restore the capital base, the group has also announced a £331m rights issue which is smaller than the £500m that had been trailed in the media. Finally, the group has announced that dividend payments will be resumed in 2018. As such, we expect the shares to react very positively to this news along with the removal of a key uncertainty.”

David Buik at Core Spreads also noted “the fact that PF only needed financial help to the tune of £300 million rather than an expected £500m, pleased the market”.

Uncertainty removed

Stuart Duncan at Peel Hunt said that while it will take some time to work through the detail of the announcements this morning, overall they are positive.

“The major uncertainty has been removed (ROP) and restoring balance sheet strength (while also adjusting debt covenants) moves the discussion towards the group’s future potential,” he said.

Better than expected

And Neil Wilson at ETX Capital said: “Usually it’s best to get all the bad news out at once – and Provident Financial is now a specialist in this kind of fare. But actually today’s update is not entirely all bad – the total FCA misconduct provisions of around £200m are well below the £300m that some touted and the £300m cash call is a lot less than then £500m that was being talked about in the press.

“Despite all the concerns management is confident that this cash call, combined with drawing a line under the FCA’s investigations, puts it in a strong enough position to resume a progressive dividend policy in 2019.”

By  Caitlin Morrison

 

 

 

Energy price cap plans to be introduced by Parliament to stop “rip-off” gas and electric bills

(qlmbusinessnews.com via news.sky.com– Mon, 26 Feb 2018) London, Uk – –

The PM says 11 million households will benefit from caps on “rip-off” tariffs despite suppliers warning they are anti-competitive.

Plans for price caps on controversial default energy tariffs are reaching Parliament for the first time, amid deep divisions on the wisdom of the intervention.

The Government's Domestic Gas and Electricity (Tariff Cap) Bill would allow the regulator, Ofgem, to limit standard variable tariffs (SVTs) until 2020, with the option to extend the cap annually until 2023.

SVTs – often the most expensive type of default charge – are paid by 11 million UK households, largely because they have failed to switch tariff or supplier.

A report by a regulator in 2016 found SVTs contributed £1.4bn in excess profits to energy companies.

There has already been support for five million properties perceived as vulnerable through pre-payment meter caps and other discounts.

But Prime Minister Theresa May signalled that her patience on default charges had run out after efforts to force the issue through the regulatory system failed.

She said on Monday: “It's often older people or those on low incomes who are stuck on rip-off energy tariffs, so today we are introducing legislation to force energy companies to change their ways.

“Our energy price cap will cut bills for millions of families. This is another step we are taking to help people make ends meet as we build a country that works for everyone.”

Members of the the so-called “big six” energy firms have hit out at the proposed caps – insisting they are anti-competitive.

Centrica, the owner of the country's largest supplier British Gas, told Sky News last weekthe measure was one reason why it had taken the decision to shed 4,000 jobs by 2020.

It had already pledged to scrap SVTs in favour of customers who fail to switch on to new fixed rate tariffs and argued that caps risked reducing competition among the UK's supply base – currently running at more than 60 firms.

Lawrence Slade, chief executive of industry lobby group Energy UK, said: “It's vital the cap doesn't halt the growth of competition which is helping customers to find a better deal and save on their energy bills.

“It's also important that the cap accurately reflects suppliers' costs, most of which are out of their direct control.”

Rebecca Long Bailey, the shadow business secretary, said: “Today's action, whilst welcome, will do little to comfort customers facing price hikes now after the Government delayed this bill by over a year.

“The Government promised action on energy bills a year ago yet energy costs are still spiralling and four million households live in fuel poverty.

“A price cap is simply a temporary sticking plaster and the Government must realise that they need to do much more to fix our broken energy market.”

Richard Neudegg, head of regulation at the price comparison site uSwitch said: “The Government's introduction of this price cap might be well meaning but is fraught with potential unintended consequences that will need to be carefully managed.

“A price cap is not a magic bullet – the biggest danger is that it risks giving consumers a false sense of security that their bills will be

By James Sillars, Business Reporter

 

 

Primark sales took a hit last autumn but expect profit to pick up this year

DennisM2/Flickr

(qlmbusinessnews.com via bbc.co.uk – – Mon, 26 Feb 2018) London, Uk – –

Sales at Primark took a hit in autumn following a spell of warmer than usual weather, but the fashion chain expects profit growth to pick up this year.

Like-for-like sales – which ignore new stores – at the chain are set to fall 1% in the 24 weeks to 3 March.

Primark's owner, Associated British Foods (ABF), said sales were hit by “unseasonably warm weather” in October.

However, it says profit growth is set to accelerate in the second half of the year, partly due to the weaker dollar.

As well as the UK, Primark operates across Europe and has been expanding in the US.

Despite sales falling across Primark as a whole, like-for-like sales in the UK were up 4% where the chain performed “very well”, ABF said.

The company also said underlying sales at Primark rose 1% in the 16 weeks to 3 March, and the chain saw record sales in the week before Christmas.

ABF also expects profit margins at the fashion chain to increase in the months ahead.

“This will be driven by better buying and some benefit of the recent weakness of the US dollar on purchases which will more than offset an expected return to a more normal level of markdowns, compared to the very low level achieved last year.”

As well as Primark, ABF also has sugar, grocery and agriculture businesses, with the grocery unit owning brands such as Twinings, Ovaltine, Silver Spoon, and Jordans cereals.

ABF said it expected half-year operating profits for the group to be similar to levels seen last year.

While most of its businesses had seen revenues rise, its sugar unit's revenue and profit is expected fall, mainly as a result of “significantly lower” EU prices which, ABF said, had affected its UK and Spanish businesses.

 

 

Range Rover Sentinel Combining Luxury and Security

 

Introducing the Range Rover Sentinel, a vehicle which combines luxury and security. Built by Land Rover’s Special Vehicle Operations division, the vehicle has class-leading ballistic, fragmentation and blast resistance. This armoured version of the Range Rover Autobiography is designed for security but maintains the luxury and capability of Range Rover.

 

 

 

 

The History of Caviar and Why it’s relished by the Super Rich

 

Caviar is one of the most expensive foods in the world. Selling for up to $35,000 per kilo, it's revered and relished by aristocrats across the globe. But it's an acquired taste. Turns out, caviar wasn't always so valuable. In the 19th century, sturgeon species in the US were so common that there are accounts of caviar being offered in saloons for free, like bar nuts. In Europe, fishermen were feeding the eggs to their pigs, or leaving it on the beach to spoil. What changed?

Similar to true champagne, caviar doesn't come from just anywhere. This, for example, is not caviar. To get the real thing, it has to be eggs from a sturgeon. There are 27 species around the world in North America, Europe, and Asia.

 

Jack Ma the richest man in Asia

 

Jack Ma wasn't born rich but now he is the richest man in Asia. This profile tells the story of how Ma started as a poor kid in China's countryside, learned English, got rejected from a job at KFC but then went on to found Alibaba, the massive e-commerce site.

 

 

London’s first capsule hostel opens in Borough

When was the last time you stayed in a youth hostel? It probably didn’t look like this one – London’s first ‘capsule hostel’. It’s a dormitory with just enough room for a bed and everything you need inside a self-contained pod. They've been popular in Japan for years – reporter Thomas Magill goes to Borough to see if they'll take off here.

 

Royal Bank of Scotland reports first profit in Ten years


morebyless/flickr.com

(qlmbusinessnews.com via bbc.co.uk – – Fri, 23 Feb 2018) London, Uk – –

Royal Bank of Scotland has returned to profit for the first time in a decade as it continues its recovery.

Chief executive Ross McEwan told the BBC it was “a really symbolic moment.”

The bank, which is majority-owned by the taxpayer, made an annual profit of £752m compared with a £6.95bn loss the year before.

RBS still faces a potentially massive fine from the US Department of Justice over the sale of financial products linked to risky mortgages.

The bank had expected to settle the case in 2017, but is now hoping it will reach an agreement this year.

RBS set aside an extra £492m for US litigation, taking the total set aside for US court action around the sale of those products to £3.2bn.

The issue complicates government plans to start selling down its stake in RBS.

“We have been constantly hit with the sins of the past with conduct and litigation issues and I've been heavily restructuring the business to bring it back to the UK,” Mr McEwan said.

The bank, which is 71%-owned by the taxpayer, has spent the past decade restructuring itself.

Mr McEwan said that 10 years ago RBS was the largest bank in the world, with a balance sheet of £2.2 trillion. This has now sunk to about £750bn.

“We've been restructuring the bank to being a really good UK/Republic of Ireland business,” he told the BBC.

“It's taken time but it's also taken a lot of cost to come out of countries and businesses that we just didn't want to be in.

“We are now operating in 12 countries as opposed to what was 38, so very focused on the UK.”

For the first time, RBS published the average pay gap between men and women in the bank, which it said was at 37.2%.

“Our gender pay gap reflects an under-representation of women at senior levels,” the bank said in its annual report. “That is not a satisfactory position and we know that we still have much to do to narrow the gap.”

When will the taxpayer recoup its RBS investment?

Analysis: BBC economics editor Kamal Ahmed

After nine years when accumulated losses totalled £58bn pounds – today a symbolic profit for RBS.

Does it mean the government can start planning more confidently about selling the 71% stake it holds on behalf of the taxpayer?

The fact the share price went down this morning by nearly 5% suggests not.

Investors are still nervous about the multi-billion pound fine the bank is expecting from the US.

At 269p, the RBS share price is still a long way below the 502p a share the government would need to break even on the billions of pounds it spent bailing out the bank a decade ago.

It has already sold some of its stake at a loss – and will have to continue on that path for a long period yet, in the hope that eventually the share price will rise above that 502p and, overall, a profit can be made.

Ross McEwan told me it would take three to five years before the government would have a “much smaller” level of ownership.

Selling the taxpayers' stake in RBS has proved a much tougher and longer process than anyone imagined a decade ago.

Critical report

On Tuesday, after months of wrangling, MPs released a report by regulators into the mistreatment of small business customers by the bank.

Mr McEwan said the report “did make for really tough reading”.

“We did not get it right for customers at the time they needed us when their businesses were struggling,” he said.

“We just didn't look after them well enough”.

The bank has now put in place a complaints process overseen by a former high court judge, Mr McEwan added.

 

 

 

Persimmon housebuilder to cut controversial bonuses to top three executives

(qlmbusinessnews.com via theguardian.com – – Fri, 23 Feb 2018) London, Uk – –

Housebuilder cuts controversial bonuses to top trio following public outcry

Persimmon is reducing bonus payouts to three top executives by £51m, including a £25m cut for its chief executive, after the UK’s second largest housebuilder was strongly criticised over its huge payout plans.

The FTSE 100 firm said a bonus of £100m for its chief executive, Jeff Fairburn, would be cut to £75m under the company’s long-term incentive bonus plan.

Finance director Mike Killoran will receive £24m less than the £78m he was originally due, and managing director Dave Jenkinson will see his bonus cut by £2m to £38m.

Persimmon has come under intense pressure both publicly and privately from politicians and shareholders for planning record-breaking bonus payouts to bosses after the company benefitted from the taxpayer-backed help-to-buy scheme.

This week the company’s sixth-largest shareholder, Aberdeen Standard Investments, labelled Fairburn’s bonus as “grossly excessive”, and said it remained “a huge concern” despite the executive’s recent pledge to donate some of his package to charity.

Last year, the Guardian revealed that Fairburn’s pay deal could be used to provide a council house for every homeless family in Yorkshire where Persimmon is based.

Announcing the bonus reduction, the company said its remuneration committee was “fully supportive” of the decision. Persimmon’s chairman, Nicholas Wrigley, resigned in December over his role in orchestrating the pay scheme.

Fairburn said earlier this month he decided some time ago to give some of his bonus awaybut that he had wanted to take an “old-fashioned approach” and keep the decision private.

Speaking this month, he said: “It’s now clear that this belief was misplaced and so I am making my plans public and recognise that I should have done so sooner. I am setting up a private charitable trust which I plan to use to benefit wider society over a sustained period of time by supporting, in a very meaningful way, my chosen charities.”

By Angela Monaghan

Uk’s GDP growth weaker than expected in the last quarter of 2017

(qlmbusinessnews.com via news.sky.com– Thur, 22 Feb 2018) London, Uk – –

The figures were down on the 0.5% expected, with a slowdown in household spending and flat business investment among the factors

The UK economy grew by 0.4% during the final quarter of 2017, according to the Office for National Statistics.

The result was weaker than the expected 0.5% and was blamed on a slowdown in consumption and business investment.

Household spending grew by 1.8% between 2016 and 2017 – its slowest rate of annual growth since 2012 – in part reflecting the increased prices faced by consumers.

In year-on-year terms, downwardly revised growth of 1.4% was the weakest in more than five years.

Among the figures was a 0.6% growth in services. Between the third and fourth quarters, transport, storage and communication grew by 1.1%; business services and finance were up by 0.9%; and government and other services increased by 0.2%.

On the other hand, distribution, hotels and restaurants decreased by 0.2%.

There was no growth in business investment, which remained at £46bn in the fourth quarter. But, compared to the same quarter in 2016, it grew by 2.1%.

Construction output was estimated to have decreased by 0.7% in the fourth quarter and agriculture, which makes up the smallest proportion of of total output, decreased by 0.9%.

The ONS also revised its 2017 growth estimate down 0.1% to 1.7%, confirming the British economy cooled off somewhat in the year after Britons voted to leave the European Union.

This compares to the EU economy growing by 0.6% in the fourth quarter – the 19th consecutive quarter that the bloc showed positive growth.

The G7 countries (Canada, France, Germany, Italy, Japan, the UK and the US) saw economic growth of 0.5% during the same period.

Chris Williamson, chief business economist at IHS Markit, said: “Survey evidence indicates that investment and construction are being subdued by heightened business uncertainty, generally linked to Brexit, while consumer spending is being hit by high inflation.

“The depreciation of sterling meanwhile showed few signs of benefiting the economy in terms of trade, with exports in fact acting as a drag on the economy in the fourth quarter.

“However, manufacturing continued to expand at a solid pace in the fourth quarter, as did business and financial services and transport and communications, helping drive the upturn in GDP.

“The worry is that, with the exception of financial services, survey data hint at these sectors also losing steam in January.”

Pablo Shah, economist at the Centre for Economics and Business Research, said he expects the UK economy to “expand by 1.6% in 2018, as domestic uncertainty looks set to persist and monetary conditions tighten both in the UK and across the world”.

By Sharon Marris, Business Reporter

 

 

British gas owner Centrica to axe 4,000 jobs as profits dive

(qlmbusinessnews.com via telegraph.co.uk – – Thu, 22 Feb 2018) London, Uk – –

The boss of British Gas owner Centrica has attacked the Government’s cap on energy tariffs this morning as the company revealed plans for 4,000 job cuts following a customer exodus and a drop in annual profits.

Centrica lost 1.4m UK domestic customers in 2017 but blamed its declining earnings on problems in its commercial division, particularly in North America.

The energy provider has already scrapped 6,000 roles in a battle to remain profitable in the face of tighter regulation, mounting competition and rising costs.

The FTSE 100 company’s chief executive Iain Conn said a combination of “political and regulatory intervention in the UK and the profits slump in North America had “created material uncertainty around Centrica”, he said, adding: “Although we delivered on our financial targets for the year, this resulted in a very poor shareholder experience

“We regret this deeply, and I am determined to restore shareholder value and confidence,” he added.

The Government announced plans towards the end of last year to cap so-called standard variable tariffs, which customers are forced to pay if they fail to switch providers or negotiate a new tariff once their fixed deal expires.

In response, Centrica and its fellow “Big Six” suppliers E.on and Scottish Power said they would scrap the tariffs altogether.

Its adjusted operating profit, stripping out those and other one-off costs, was down 17pc to £1.25bn, while revenues grew 3pc to £28bn.

Centrica’s shares have been in decline since 2013, falling to their lowest point since 1999 earlier this month, but were up 2.6pc to 136p in morning trade.

Neil Wilson, an analyst at ETX Capital, said: “While this mea culpa from Conn looks bad, it was all fairly well guided in November, hence why the shares are responding positively this morning to news that Centrica plans to ramp up its cost-savings programme.”

The company also maintained its dividend at 12p per share.

By 

 

 

UK unemployment rate up for the first time in two years

(qlmbusinessnews.com via bbc.co.uk – – Wed, 21 Feb  2018) London, Uk – –

UK unemployment has increased slightly for the first time in two years.

The rate of unemployment rose from 4.3% to 4.4% for the three months to the end of December, the Office for National Statistics said.

Despite the slight increase in the unemployment rate, the total number of those in work increased by 88,000.

Wages grew by an average of 2.5%, up from 2.4% the previous month, although the increase remained below inflation.

The number of unemployed people rose by 46,000 to 1.47 million for the final quarter of the year, compared to the previous three months.

 

 

 

Lloyds Banking Group report record pre-tax profit of 5.3 billion pounds

Money Bright/Flickr

(qlmbusinessnews.com via uk.reuters.com — Wed, 21 Feb 2018) London, UK —

LONDON (Reuters) – Lloyds Banking Group reported its highest pre-tax profit since 2006 on Wednesday, announcing a share buy-back of up to one billion pounds and 3 billion pounds of strategic investment over the next three years.

The 24 percent rise in profit to 5.3 billion pounds beat last year’s record of 4.2 billion but fell short of the 5.73 billion expected by analysts in a poll provided by the bank.

Chief Executive Antonio Horta-Osorio said 2017 had been a “landmark year” for the group, which returned to full private ownership for the first time since 2008, when it was the subject of a bailout by taxpayers worth some 20.5 billion pounds.

“We have delivered another year of strong financial performance with improved profits and returns… and have now built the largest and top rated digital bank in the UK,” Horta-Osorio said in the statement.

The bank’s planned 3 billion pounds in strategic investment will be spent largely on digital technology and staff, although the bank said it remained committed to its branch network, which has seen scores of closures since the financial crisis.

The strategy responds to new regulation forcing big banks to open up their customers’ data to rival lenders and financial technology firms, enabling them to compete more effectively for customers.

The bank said it will revamp its app and digitise 70 percent of its processes by 2020, enabling it to lower its cost income ratio to the low 40s from 46.8 percent in 2017.

It also plans to ramp up its financial planning and retirement business, increasing open book assets by 50 billion pounds by 2020 and expanding its corporate pension customer base by 1 million.

By Emma Rumney

 

 

William Hill fined £6.2m over money laundering failures by Gambling Commission


Ian Sutton/Flickr

(qlmbusinessnews.com via news.sky.com– Tue, 20 Feb, 2018) London, Uk – –

Ten customers were allowed to deposit large sums of money linked to criminal offences, the Gambling Commission said.

William Hill has been fined £6.2m by regulators over money laundering and problem gambling failures.

It is the second biggest penalty ever levied by the Gambling Commission and the largest in relation to money laundering.

The regulator said 10 customers were allowed to deposit large sums of money linked to criminal offences.

It said William Hill did not seek information about the source of the funds or establish whether they were problem gamblers.

The commission said senior management at William Hill “failed to mitigate risks and have sufficient numbers of staff to ensure their anti-money laundering and social responsibility processes were effective”.

Gambling Commission executive director Neil McArthur said: “This was a systemic failing at William Hill which went on for nearly two years and today's penalty package reflects the seriousness of the breaches.

“Gambling businesses have a responsibility to ensure that they keep crime out of gambling and tackle problem gambling – and as part of that they must be constantly curious about where the money they are taking is coming from.”

The regulator identified failures taking place between November 2014 and August 2016.

On one occasion, a customer who was funding his gambling habit by stealing from his employer was allowed to deposit £541,000 over 14 months.

An operator had made the assumption, after a chat with the customer, that he was earning as much as £365,000 a year – when in fact he was on a salary of £30,000, the commission said.

In another instance, a customer deposited £653,000 over 18 months, during which he triggered an “amber risk” alert which should have seen his file passed to managers for review.

This did not occur due to a “systems failure” and the customer was allowed to gamble for a further six months despite continuing to activate financial alerts, the regulator said.

William Hill will pay a penalty of £5m plus return £1.2m – the amount it gained through the rule breaches – to people affected by crime linked to the breaches.

Chief executive Philip Bowcock said the company had fully cooperated with the commission and introduced “new and improved policies and increased levels of resourcing” as well as launching an independent review of its processes.

He added: “We are fully committed to operating a sustainable business that properly identifies risk and better protects customers.”

Online gambling firm 888 was handed a £7.8m penalty last year for “significant flaws” in its safeguarding of customers.

By John-Paul Ford Rojas, Business Reporter

 

 

HSBC pre-tax profit more than double to $17.2bn

Chris Beckett/Flickr

(qlmbusinessnews.com via theguardian.com – – Tue, 20 Feb 2018) London, Uk – –

Holdings’ pre-tax profit for 2017 has more than doubled to $17.2bn (£12.3bn), due largely to the absence of hefty restructuring costs, but the figure still lagged behind expectations as the bank took a writedown to take in US tax changes.

On the chief executive Stuart Gulliver’s last day in the job, Europe’s biggest lender by market capitalisation also announced plans to bolster its capital base by raising up to $7bn in the first half of 2018.

The pre-tax profit for 2017 compared with $7.1bn the year before but below the $19.7bn average estimate of 17 analysts polled by Thomson Reuters.

Those estimates did not all take into account the tax writedown, triggered by cuts in the US corporate tax rate that meant banks had to book losses on deferred tax assets built up during loss-making years.

HSBC said its 2017 financial results included a charge of $1.3bn relating to the “remeasurement of US deferred tax balances” to reflect the reduction in the US federal tax rate to 21% from 2018.

Banks including Credit Suisse and UBS have already reported multibillion-dollar writedowns from the tax change, while Barclays has said it expects a £1bn hit on its annual post-tax profit.

HSBC’s profit for 2016 reflected a $3.2bn impairment of goodwill in the global private banking business in Europe and the impact of its sale of operations in Brazil.

HSBC plans to boost its capital base with a $7bn fundraising.

 

 

 

Energean Oil and gas explorer plans £360m London listing

(qlmbusinessnews.com via telegraph.co.uk – – Mon, 19 Feb, 2018) London, Uk – –

Oil and gas explorer Energean plans to raise $500m (£357m) with a listing on the London Stock Exchange, as it hopes to capitalise on increasing demand for energy supplies from the eastern Mediterranean.

The firm plans to use $395m of the money raised to develop its offshore Israel Karish and Tanin gas fields and a further $10m would go to the company’s founders. The remaining $95m would be spent on fees, capital expenditure and other costs.

Mathios Rigas, chief executive of Energean, said the company had “advanced plans for the development of the Karish and Tanin fields, offshore Israel, together with the significant development programme for the Prinos licences in Greece”.

He said that the listing would help the firm to grow its pipeline of “attractive exploration projects”.

Chairman Simon Heale, who has previously served as chair of copper miner Kaz Minerals, said that the eastern Mediterranean was attracting interest from oil and gas majors.

Energean, which was founded in 2007, operates five projects in Greece, as well as others in Motenegro and Israel.

The eastern Mediterranean region has become an increasingly active exploration and production region, with recent discoveries the Zohr gas field in Egypt and the Leviathan site in Israel attracting investment in the region.

Exxon Mobil, Total, Edison and Repsol have already acquired or expressed interest in acquiring hydrocarbon interests in Greek exploration areas. These would help Greece to reduce its reliance on Russia, which currently provides about 60pc of its oil supplies.

“As an independent, locally based exploration and production company, the directors believe the group is well positioned to compete and move swiftly on opportunities in the region,” the company said.

 

KFC forced to close a number of branches across the UK due to chicken shortage


Wikimedia

(qlmbusinessnews.com via bbc.co.uk – – Mon, 19 Feb, 2018) London, Uk – –

Fast-food chain KFC has closed a number of outlets across the UK after they ran out of chicken.

Things were not so finger-licking good for disappointed fried chicken fans after problems with a new distribution system forced the closures.

Last week, KFC switched its delivery contract to DHL, which blamed “operational issues” for the supply disruption.

KFC has about 900 UK restaurants, with more than 80% run by franchisees.

Closures have been reported in areas including London and the South East, the Midlands, East Anglia, the North East and Wales.

Until last Tuesday, KFC's chicken was delivered by South African-owned distribution group Bidvest, which describes itself as “the leading supplier of logistical and supply chain solutions to the UK hospitality and restaurant sector”.

But after the change in the contract, many of the food giant's outlets began running out of chicken products.

“We've brought a new delivery partner onboard, but they've had a couple of teething problems – getting fresh chicken out to 900 restaurants across the country is pretty complex!” it added, apologising to customers for the inconvenience.

“We won't compromise on quality, so no deliveries has meant some of our restaurants are closed, and others are operating a limited menu or shortened hours.”

The statement listed KFC restaurants that were still open despite the problems.

DHL said: “Due to operational issues, a number of deliveries in recent days have been incomplete or delayed. We are working with our partners to rectify the situation as a priority and apologise for any inconvenience.”

Disgruntled KFC customers have been taking to Twitter to express their dismay at the shortages.