BT boss Gavin Patterson signs off with better-than- expected third quarter profit forecast

(qlmbusinessnews.com via cityam.com – – Thur, 31st Jan 2019) London, Uk – –

Outgoing BT boss Gavin Patterson signed off today by beating revenue and profit expectations in the telecom giant’s third quarter.

Analysts said Patterson was leaving on “an upbeat note” on the back of today’s trading update.

The broadband giant reported a three per cent year-on-year decline in core earnings to £1.88bn. Over the nine months to the end of 2018, adjusted profit before tax dropped one per cent to £2.49bn.

Revenue dipped one per cent to £5.98bn for the three months to the end of December as it recorded a one-off £180m charge in regulated broadband price reductions at Openreach.

The drop-offs were partly offset as both revenue and earnings grew in BT’s consumer unit, with core profits up 15 per cent to £648m and revenue growing four per cent to £2.78bn.

The revenue boost came from higher prices and increased handset costs for customers.

However, BT’s other areas of enterprise, Openreach and global services all fell compared to the same period last year.

A steeper than expected decline in landline calls knocked enterprise revenue down six per cent, while global services fell five per cent as BT reduced its low margin businesses. Openreach profits plunged 19 per cent as a result of the regulatory charge.

Patterson signalled that despite the marginal declines, BT is on track to deliver underlying profit towards the top end of guidance for the current financial year of around £7.4bn.

He added: “We continue to expect regulation, market dynamics, cost inflation and legacy product declines to impact in the short term before being more than offset by improved trading and cost transformation by our 2020/21 financial year.

“I am handing over the business with good momentum behind its ongoing transformation programme and wish my colleagues all the best for the future.”

On a call with analysts, he added: “There have been some ups and downs no doubt but I think the business is more resilient better placed overall.”

Patterson also warned about potential disruption from a no-deal Brexit, saying: “A disorderly exit could damage consumer and business confidence although it’s too early to assess any potential impact.”

Shares fell around four per cent on the back of the update as analysts reeled off the list of pressures facing BT in 2019.

George Salmon, equity analyst at Hargreaves Lansdown, said: “Outgoing chief executive Gavin Patterson has had his critics in recent years, but these results mean he’s leaving on an upbeat note.

“BT’s drive to reduce costs is well underway, but there’s more to this positive performance than just cost cutting. The consumer business is again strong, and improvements in BT’s global operations are coming faster than expected.

“That’s not to say BT is out of the woods though. Competition is fierce in mobile and broadband, and falling profits at Openreach are a timely reminder that regulation has the potential to limit progress at any time.” With the combined pension and net debt position a rather daunting £16.1bn, it’s hard to see the new CEO raising the dividend in May’s full years.”

Lee Wild, head of equity strategy at Interactive Investor, added: “In the short term, expect BT to have its hands full dealing with increased regulation, fierce competition, rising costs and a drop off in contribution from legacy products. Add the threat of a no-deal Brexit to that list.

“For now, though, a pick-up in trading and heavy cost-cutting is offsetting headwinds, and restructuring put in place by Patterson continues to feed through.

“There’s a lot for BT to cope with both near and long-term, and questions about the dividend will not go away. Profit is steady over the past nine months at £5.55bn but huge investment in its fibre network reduced free cash flow by 11 per cent.”

By Joe Curtis

Barclays to transfers £170bn in assets to Dublin over no-deal Brexit fears

(qlmbusinessnews.com via theguardian.com – – Thur 31st Jan, 2019) London, Uk – –

Plan involves transferring assets linked to 5,000 clients to protect bank’s EU business

Barclays is to move €190bn (£166bn) worth of assets from the UK to Ireland as the bank readies itself for a possible no-deal Brexit.

The high court on Wednesday approved the lender’s Brexit contingency plans that include transferring the assets linked to about 5,000 of its clients to a Dublin-based unit.

“Barclays will use our existing licensed EU-based bank subsidiary to continue to serve our clients within the EU beyond 29 March 2019 regardless of the outcome of Brexit,” the bank said. “Our preparations are well advanced and we expect to be fully operational by 29 March 2019.”

Barclays will boost its Dublin headcount by about 150 to 300 as a result of the EU divorce.

The court approval came less than two months after Royal Bank of Scotland applied to transfer a third of its own investment bank clients and assets worth billions out of Britain to Amsterdam in preparation for Brexit.

The Dublin and Amsterdam moves safeguard the banks’ businesses against a no-deal Brexit, allowing them to continue serving European customers even if Britain fails to strike a trade deal that covers financial services contracts.

A no-deal Brexit would leave banks without a replacement for EU passporting rights, which currently allow firms to do cross-border business throughout the bloc.

In approving Barclays’ application, Mr Justice Snowden said in his judgment: “Due to the continuing uncertainty over whether there might be a ‘no-deal’ Brexit, the Barclays Group has determined that it cannot wait any longer to implement the scheme.”

He added that the Irish operation “must be legally and operationally ready to conduct all relevant regulated business with the in-scope clients by no later than 29 March 2019, which is the date currently set for Brexit.”

By Kalyeena Makortoff

UK’s consumer borrowing slows as Brexit nears

(qlmbusinessnews.com via uk.reuters.com — Wed, 30th Jan 2019) London, UK —

LONDON, Jan 30 (Reuters) – – Lending to British consumers grew at its slowest pace in four years in December, Bank of England data showed on Wednesday, underscoring the loss of momentum in the economy ahead of Brexit.

The annual growth rate in unsecured consumer lending weakened to 6.6 percent from 7.2 percent in November, the smallest increase since December 2014, the BoE figures showed.

There have been signs from many retailers that British households reined in their spending at the end of last year, faced with the possibility of the country leaving the European Union without a deal to smooth the economic shock.

Prime Minister Theresa May says she will seek changes to the Brexit deal she struck with other EU leaders last year but they have ruled out major alterations, leaving open the prospect of a no-deal Brexit in less than two months’ time.

The BoE said the number of mortgages approved for house purchase edged down to 63,793 in December, the lowest number since April but above a median forecast of 63,000 in a Reuters poll of economists.

Britain’s housing market stumbled in 2018 and the Royal Institution of Chartered Surveyors said earlier this month that its members had the most negative outlook for house sales over the coming three months since its records began in 1999.

BoE Governor Mark Carney has warned that in the event of a “disorderly” departure from the EU — which is not the central bank’s base-case scenario — house prices could slump by 30 percent as part of a broader economic shock.

The BoE data showed net mortgage lending, which tends to lag behind approvals, at 4.112 billion pounds in December, up from 3.631 billion pounds in November.

The figures also showed a 687 million-pound increase in unsecured lending, the weakest increase since March of last year and below economists’ forecasts of a rise of 800 million pounds.

Credit card lending rose by just 92 million pounds, the smallest increase since September 2014.

The BoE also said net gilt purchases by foreign investors totalled 11.960 billion pounds in December, compared with 2.418 billion pounds in November.

Reporting by William Schomberg and Huw Jones

Apple reveals first sales drop in two years as Tim Cook hints at cheaper iPhones

(qlmbusinessnews.com via telegraph.co.uk – – Wed, 30th Jan 2019) London, Uk – –

Apple has revealed its first sales drop in more than two years and warned of further falls in the coming months as it confirmed that its iPhone business had gone into decline.

The company revealed that revenues in the final three months of 2018, its traditionally lucrative Christmas period, had fallen by 5pc to $84.3bn (£64.5bn). 

The decline was most pronounced in the iPhone business, which makes up the majority of Apple’s profits. Sales of the iPhone fell by 15pc, with much of the drop due to waning demand for its products in China. Profits, at $20bn, were flat on the same period a year ago.

Tim Cook, Apple's chief executive, suggested that consumers outside of America could benefit from cheaper iPhone prices in future as he said the company could reverse a policy of pricing its phones in dollars, rather than local currencies.

The falling pound in the last two years has pushed up the price of the most expensive iPhone in Britain from £789 in 2015 to £1,449 today, an 83pc increase. In comparison, the price in dollars has risen by just 52pc over the same period. “When you look at foreign currencies and then particularly those markets that weakened over the last year those (iPhone price) increases were obviously more,” Mr Cook told Reuters.

Shares in the company rose  after the results, with the revenue figure marginally better than investors had expected. However, Apple warned that sales in the next quarter, the first three months of 2019, would decline again.

The news served as more evidence that iPhone sales may have peaked as the global smartphone market saturates and existing users upgrade their phones less regularly. Consumers are holding on to their old devices for longer as newer versions of the smartphone offer fewer of the must-have features they once did.

Apple became the world’s first public company to be valued at more than one trillion dollars last summer but its shares have sunk since amid growing signs that sales of its most popular product, the iPhone, have ceased growing.

The company pre-empted the sales fall earlier this month, when it announced its first profit warning in 17 years due to an unexpectedly large decline in iPhone sales. The drop, which sent shares falling by 9pc at the time, was pinned largely on a stuttering Chinese economy, although Mr Cook admitted that consumers elsewhere were not upgrading their phones as regularly as the company had hoped.

Tuesday marked the first set of results since Apple decided to stop revealing how many iPhones, iPads and Mac computers it sells in each quarter, a move that had been interpreted as a sign that sales were in decline.

The company now merely gives revenue figures for each category, disguising whether the number of devices it sells has gone up or down.

While revenues from the iPhone fell, those from the iPad tablet and Mac computers rose, as did sales at Apple’s burgeoning wearables division, which includes the Apple Watch and its AirPod headphones.

Apple is hoping that revenues from its App Store and a growing investment in video streaming will serve as a new source of growth as iPhone sales stutter. Its services division, which also includes Apple Pay and its Apple Music streaming business, grew by 19pc year-on-year, a slightly slower growth rate than investors have become used to.

The iPhone continues to account for more than half of revenues, however.

The company predicted that sales in the next quarter would be between $55bn and $59bn, meaning they will fall again against the same period last year, when revenues were $61bn.

It came the day after Apple suffered a major privacy setback when it emerged that a group video-calling feature on its devices was transmitting people’s audio or video feeds before they had answered the phone call.

The Irish Data Protection Commissioner, its primary privacy regulator in Europe, said it had been in touch with the company over the matter.

By James Titcomb

Royal Mail shares fall to a record low

(qlmbusinessnews.com via news.sky.com– Tue, 29th Jan 2019) London, Uk – –

The company now expects group underlying earnings to decline to between £500m and £530m, compared with £694m last year.

Shares in Royal Mail have plummeted after the company warned that letter numbers by volume will be lower than expected next financial year.

Royal Mail said that letters by volume dropped 8% over the nine months to 23 December, with letter revenues down 6%.

It attributed the volume drop in part to the impact of the General Data Protection Regulation (GDPR) as well as “business uncertainty” in the run up to Brexit.

The company also confirmed that it expects group underlying earnings to decline to between £500m and £530m, compared with £694m last year.

This projected earnings fall comes after Royal Mail warned of a fall in annual profits last October.

The stock market reacted badly to Royal Mail's trading statement and shares fell by as as much as 13% on opening, making it the FTSE 250's worst performer at the start of business.

Shares rallied slightly within a hour to being down 8% on Monday's closing price of 301p.

Overall, Royal Mail reported a 2% rise in underlying revenues for the period, held up by an 8% revenue increase at its General Logistics Systems (GLS) division, which offset a 1% fall in its UK parcels and letters arm.

Royal Mail group chief executive Rico Back said: “We have had a busy Christmas season.

“In the UK we recruited 23,000 seasonal workers and opened six temporary parcel sorting centres to make sure we had the capacity to handle the high volumes of parcels and cards through our network.

“In the December trading period alone we handled 164 million parcels, up 10% compared with last year.”

Mr Back added: “Due to our letters performance to date, we expect addressed letter volume declines, excluding elections, to be in the range of 7% to 8% for 2018-19.

“While the rate of e-substitution remains in line with our expectations, business uncertainty is impacting letter volumes.

“As a result, addressed letter volume declines, excluding elections, are likely to be outside our forecast medium-term range next year.

“Otherwise, we are reconfirming the outlook and other guidance for 2018-19 provided in our half-year results.”

Nicholas Hyett, Equity Analyst at Hargreaves Lansdown said: “The continuing collapse in letter volumes is the big news in these numbers.

“Royal Mail's gone out of its way to say that's down to wider uncertainty, and the introduction of new privacy laws under GDPR, rather an uptick in companies using email rather than paper.

“Whatever the cause, we suspect those mailings are gone for good.”

“News that the capital markets day has been pushed back to after full year results suggests to us that the all-important cost savings may also be proving harder to deliver than hoped.

“Those efficiency gains remain central to the Royal Mail investment story, and if they can't be delivered then there's nothing to protect the group from the pains of an economic downturn in the UK.”

Domino’s sells over 500,000 pizzas in UK record trading day

(qlmbusinessnews.com via theguardian.com – – Tue, 29th Jan 2019) London, Uk – –

Chain reports bumper sales on Friday before Christmas, but slow global growth cuts profits

Domino’s sold more than 535,000 pizzas in the UK on the Friday before Christmas – equivalent to 12 a second over a 12-hour trading day – but a weaker international performance has forced the company to slice its profit guidance.

The strong run-up to Christmas helped group sales to rise by 5.5% year on year to £339.5m in the 13 weeks to 30 December, it said in a trading update published on Tuesday. Sales growth was driven by its Republic of Ireland operations, where like-for-like sales rose by 7.5%.

However, Domino’s efforts to expand to new markets after fast UK growthstumbled during the quarter. International sales fell by 2% year on year to £26.6m.

David Wild, the Domino’s Pizza Group chief executive officer, said the international operation had experienced growing pains this year. The company suffered “business integration challenges” in Norway in particular, he said.

The weaker international performance prompted Domino’s to guide that its full-year underlying profit before tax will be at the lower end of analysts’ expectations of between £93.9m and £98.2m. The company also said that investment in central functions would dent short-term profitability.

Shares in Domino’s fell by more than 5% as trading opened on Tuesday.

Domino’s, originally an American brand, opened its first UK outlet in 1985, before the British and Irish franchise was bought out in 1993.

The company sold almost 90m pizzas last year in the UK, but its addition of 59 stores during the year to the more than 1,200 it already ran was significantly below its plans at the start of the year. Domino’s on Tuesday reaffirmed its long-term target of 1,600 stores in the UK, but did not give guidance on how many it expects to add in the coming year.

Competition is increasing rapidly in food delivery, with Domino’s facing pressure from companies such as Just Eat, Deliveroo and Uber Eats, all of which enable rival pizza restaurants to offer home delivery. However, Domino’s is betting that its brand and record of profitability will enable it to fend off some of its loss-making competitors.

Wild said: “The UK delivered food market is vibrant and we estimate that it will grow at a compound rate of 8% a year to 2022. We aim to maintain our share of this market.”

By Jasper Jolly

Ocado shares rise after report suggest M&S deal

(qlmbusinessnews.com via bbc.co.uk – – Mon, 28th Jan, 2019) London, Uk – –

Ocado shares rose as much as 6.7% in London trading after a report suggested it may agree a deal with Marks and Spencer enabling the larger firm to make home deliveries.

Shares in M&S also rose.

M&S could buy distribution centres and vans from Ocado, the Mail on Sunday reported. It has been exploring options for food delivery online in a bid to catch up with rivals such as Sainsbury's.

Both companies declined to comment.

Ocado currently has a deal with southern England-focused Waitrose, which is due to come to an end in September 2020.

M&S has been experimenting with home delivery since 2017, when it opened a trial in north London to offer a small range of ready meals. Its website already offers wedding cakes, party food and alcoholic drinks for collection, but it lacks a delivery network the likes of Tesco, Morrison, Sainsbury's or Asda have.

After those earlier gains, Ocado shares settled to stand 3% higher at 975p. Marks and Spencer shares rose 2% to 295p.

M&S, founded in 1884, has been struggling in recent years to keep up online in both food and clothing. It said in November that sales excluding newer stores, were down 2.2% for the six months to the end of September. Food sales were down 2.9% and clothing and home sales slid 1.1%.

A deal of any kind is not certain, the newspaper reported.

Sir Philip Green drops legal action against the Daily Telegraph

(qlmbusinessnews.com via bbc.co.uk – – Mon, 28th Jan 2019) London, Uk – –

Sir Philip Green has dropped legal action against the Daily Telegraph, which prevented the newspaper publishing details of allegations of sexual harassment and racist behaviour.

Last October, the Telegraph published a story saying a prominent businessman had been accused of harassment.

The Topshop boss was later named as the businessman in the House of Lords.

As a result, Sir Philip said he had been the subject of “vicious” and “untrue” personal attacks in the media.

The statement also said that Sir Philip is “not guilty of unlawful sexual or racist behaviour”.

Sir Philip's representative would not say why the businessman had dropped the legal action.

When the allegations first emerged, Sir Philip acknowledged there had “been some banter”, but said it had “never been offensive”.

At the heart of the issue are non-disclosure agreements signed by five individuals.

In his statement, Sir Philip said that the Telegraph had helped break those agreements and threatened to make the information public.

In doing so, the newspaper had exposed the individuals to “significant risk and future legal action”, the statement said.

It also said: “Due to the ongoing confidentiality obligations and injunction still in place, Arcadia and Sir Philip cannot comment on the detail of any allegations, but confirm that any grievances are treated with the utmost seriousness and are investigated thoroughly in accordance with best practice.”

Fortune

Sir Philip used to be known as the king of the High Street.

He built a fortune from a retail empire that included Topshop, BHS, Burton and Miss Selfridge.

He sold BHS in March 2015 for £1, but it went into administration a year later, leaving a £571m hole in its pension fund.

He later agreed a £363m cash settlement with the Pensions Regulator to plug the gap.

In a report into the collapse of BHS, MPs called the episode “the unacceptable face of capitalism”.

He and his wife Cristina are estimated by Forbes to be worth £3.8bn.

Samsung Reveal Their New Shape-shifting TVs At CES Tech Show Vegas

Source: BBC News

Samsung has revealed a 75in (190cm) television made of modular micro LED panels, at the CES tech show in Las Vegas. The BBC's Chris Fox explains why micro LEDs, which have predominantly been used in large applications such as billboards, may soon be heading for our homes.

Vodafone second largest mobile operator ‘pauses’ Huawei deployment in its core network

(qlmbusinessnews.com via uk.reuters.com — Fri, 25th Jan 2019) London, UK —

LONDON (Reuters) – Vodafone, the world’s second largest mobile operator, said it was “pausing” the deployment of Huawei equipment in its core networks until Western governments resolve concerns about the Chinese company’s activities.

Huawei is facing increasing scrutiny over its ties with the Chinese government and a suspicion that its technology could be used by Beijing for spying. Huawei has denied the allegations.

Vodafone’s Chief Executive Nick Read said on Friday that the Huawei debate was playing out at a “too simplistic level”, adding that it was an important player in an equipment market dominated by three companies.

Read said its equipment was used in Vodafone’s core – the intelligent part of its networks – in part of Spain and some other smaller markets.

“Given that, we have decided to pause further Huawei in our core whilst we engage with the various agencies and governments and Huawei just to finalise the situation, of which I feel Huawei is really open and working hard,” he said after Vodafone reported third-quarter numbers.

Vodafone said its key revenue measure deteriorated in the third quarter, down 40 basis points quarter-on-quarter to 0.1 percent, reflecting continuing price competition in Spain and Italy and a slowdown in South Africa.

Analysts had expected growth of 0.3 percent.

Shares in the company fell to their lowest level since July 2010 after the update, and were trading down 1.1 percent at 142 pence at 0840 GMT.

Vodafone said competition in the Spanish and Italian markets had moderated through the quarter.

“Lower mobile contract churn across our markets and improved customer trends in Italy and Spain are encouraging, however these have not yet translated into our financial results,” Read said.

But he said the signs of improvement underpinned confidence in Vodafone’s full-year guidance.

Vodafone expects around 3 percent growth in underlying adjusted core earnings for the full year, with free cash flow before spectrum costs coming in at about 5.4 billion euros.

Reporting by Paul Sandle

Uk clothing manufacturers forced to pay almost £90,000 minimum wage non-payment

(qlmbusinessnews.com via bbc.co.uk – – Fri, 25th Jan 2019) London, Uk – –

British clothing manufacturers have been forced to pay almost £90,000 to employees for non-payment of the minimum wage.

An HM Revenue & Customs investigation found that over a six-year period 126 garment workers were paid wage arrears.

MP Mary Creagh, who reviewed the HMRC data, said it showed exploitation in the industry was still “rife”.

HMRC has 14 ongoing investigations, and it found underpayment in one in every four inspections.

“This [exploitation] must stop,” said Ms Creagh, chairwoman of the Environmental Audit Committee. “We need government action to end these 19th century practices in 21st century Britain.

“It has been 20 years since the introduction of the minimum wage but in our inquiry we heard that underpayment is rife and goes hand-in-hand with a culture of fear and intimidation in the UK's textile industry.”

The committee has been looking into the sustainability of the fashion industry.

In October, it warned that fast fashion is damaging the planet, and in November MPs quizzed retail executives on how firms could justify selling clothes for £5 or less.

According to Adam Mansell, chief executive of the UK Fashion and Textile Association (UKFTA), retailers have long been aware that problems exist with exploitation of workers in Britain, but the problems are numerous and difficult to solve.

Evasion

“There have been efforts in the past to shut down these factories, but unfortunately what happens is they operate under a phoenix system where they will close one day, and then open up under a different name the next day,” he told the BBC.

And following attempts by retailers to quell exploitation by publicly terminating contracts with certain factories, some factory owners have found other ways to evade detection of their business practices.

“For instance, you place an order with Factory A, but they outsource that manufacturing to Factory B or C [which might be exploiting workers], so the retailer doesn't get to see the factory where the goods are actually being made,” said Mr Mansell.

The trade body has also received anecdotal evidence that many of the exploited workers claim state benefits, which makes them more likely to accept being paid below minimum wage.

“The retailers and government enforcement agencies are aware of this and they don't want to put people who are being exploited in an even worse position,” he added.

UKFTA is working with the government and retailers to try to prevent exploitation.

“In London, there are 13,500 people employed making clothes for high-end fashion brands. Quite often these brands pay a London living wage,” said Mr Mansell.

“If you can afford to operate in London, make a profit and still pay a living wage, then there's no reason you can't do this anywhere else in the country.”

Airbus warns UK departure in the event of hard Brexit

(qlmbusinessnews.com via news.sky.com– Thur, 24th Jan 2019) London, Uk – –

Airbus makes its most explicit threat yet to move its wing operations abroad if the UK ends up with a hard Brexit.

The boss of Airbus has warned it could shift wing production from the UK in future in the event of hard Brexit “madness”.

In a company video, Tom Enders said that “potentially very harmful decisions” were ahead without a smooth divorce from the EU.

He described the failure of politicians to achieve clarity on the issue to date as a “disgrace”.

Mr Enders has been consistent in his opposition to Brexit from the outset but his comments were seen as his most explicit threat yet that its wing assembly lines would be moved abroad under a “no-deal” scenario.

That is essentially Brexit with no new EU trade deal in place.

Airbus said there would be no immediate change to its UK operations because of the company's production cycles but it warned the UK's position “at the forefront of global aviation for more than a century” was clearly threatened.

Airbus employs more than 14,000 staff in the country, with the bulk of the workforce stationed at its two biggest sites at Filton and Broughton – the latter where all wing assembly takes place.

The company said its current UK operations also support a further 110,000 roles in the wider economy.

In the video, Mr Enders hit out at the advocates of a hard Brexit.

He said: “Please don't listen to the Brexiteers' madness which asserts that because we have huge plants here, we will not move and we will always be here.

“They are wrong. Of course it's not possible to pick up and move our large UK factories to other parts of the world immediately, however aerospace is a long term business and we could be forced to redirect future investments in the event of a no-deal Brexit.”

He added: “In a global economy, the UK no longer has the capability to go it alone.”

His remarks tally with those of wider business groups, which expressed deep frustration earlier this month when Theresa May's Brexit deal with Brussels was heavily defeated by MPs.

The likes of the CBI and BCC said that while the terms were not perfect, they could have lived with them as they were far more preferable than the prospect of no deal.

A number of international businesses, especially those in the banking sector, have shifted some jobs – or created new ones – abroad to ensure continued access to EU markets as a precaution.

Just this week Sony said it was moving its European HQ from the UK in case Brexit disrupted its current trading arrangements.

Dyson, founded by the Brexit-supporting Sir James Dyson, attracted accusations of betrayal when it announced on Tuesday that it was moving its head office to Singapore.

The technology company insisted its decision was not linked to the UK's departure from the European Union.

Commenting on the Airbus announcement, the Brexit secreatry Stephen Barclay told MPs: “I take very seriously the warning from the chief executive of Airbus.

“What the chief executive and others in the business community are clear on is that they want a deal to avoid the uncertainty of no deal and that is why he is backing the prime minister.”Sponsored Links

By James Sillars

Carlos Ghosn resigns as Renault to name new bosses

(qlmbusinessnews.com via theguardian.com – – Thur, 24th Jan 2019) London, Uk – –

French carmaker’s board meets to appoint new chair and a CEO to end Renault-Nissan leadership crisis

Renault’s board was meeting on Thursday to appoint new leadership, after the chairman and CEO Carlos Ghosn resigned.

The French government, Renault’s biggest shareholder, confirmed the board was being asked to name outgoing Michelin boss Jean-Dominique Senard as chairman and Ghosn’s deputy Thierry Bollore as chief executive.

Ghosn resigned on Thursday following his arrest in Japan amid the financial scandal which has rocked the French carmaker and its alliance with Japan’s Nissan.

Senard and Bollore “will be presented this morning to the board of directors”, the French government said.

The widely expected appointments may begin to resolve a Renault-Nissan leadership crisis that erupted after Ghosn’s arrest in Japan in November and swift dismissal as Nissan chairman.

They also mark a clear end to one of the auto industry’s most feted careers, two decades after Ghosn was despatched by former Renault CEO Louis Schweitzer to rescue newly acquired Nissan from near-bankruptcy – a feat he pulled off in two years.

After 14 years as Renault CEO and a decade as chairman, Ghosn formally resigned from both roles on the eve of the board meeting, the French finance minister, Bruno Le Maire, said.

Ghosn’s arrest and indictment for financial misconduct has strained Renault-Nissan relations, threatening the future of the partnership he transformed into a carmaking giant over two decades.

For two months, the tensions deepened as Renault and the French government stuck by Ghosn despite the revelation he had arranged to be paid tens of millions of dollars in additional income, unknown to shareholders.

Ghosn has been charged with failing to disclose more than $80m (£60m) in additional compensation for 2010-18 that he had agreed to be paid later. Nissan director Greg Kelly and the Japanese company itself have also been indicted.

Both men deny the deferred pay was illegal or required disclosure, while not contesting the agreements’ existence. Ghosn has denied a separate breach of trust charge over personal investment losses he temporarily transferred to Nissan in 2008.Advertisement

Ghosn finally agreed to step down from Renault after the French government called for leadership change and his bail requests were rejected by the Japanese courts.

Senard, 65, faces the immediate task of soothing relations with Nissan, which is 43.4% owned by Renault but the larger partner by sales.

Nissan currently owns a 15% non-voting stake in its French parent and 34% in Mitsubishi Motors, a third major partner in the manufacturing alliance.

Sony to move European headquarters from the UK to the Netherlands

(qlmbusinessnews.com via bbc.co.uk – – Wed, 23rd Jan 2019) London, Uk – –

Sony will move its European headquarters from the UK to the Netherlands to avoid disruptions caused by Brexit.

The company said the move would help it avoid customs issues tied to Britain's exit from the EU.

Despite the move, Sony won't shift personnel and operations from the existing UK operations.

It is the latest Japanese company to flag a move to the continent in response to Brexit.

And on Tuesday appliance maker Dyson announced it was moving its headquarters to Singapore, from Malmesbury in Wiltshire, although it said it had nothing to do with Brexit.

The UK is on course to leave the European Union in March, but the two sides have yet to strike a deal.

On a recent trip to the UK, Japan's Prime Minister Shinzo Abe expressed concern over a no-deal Brexit.

He said it could hurt Japanese companies, which employ up to 150,000 people in the UK.

Electronics firms switch off

In a statement Sony said the move would mean “we can continue our business as usual without disruption once the UK leaves the EU. All our existing European business functions, facilities, departments, sites and location of our people will remain unchanged from today.”

Sony spokesperson Takashi Iida said the move would make Sony a “company based in the EU” so the common customs procedures will apply to Sony's European operations after Britain leaves the bloc.

Sony's rival Panasonic has already moved its headquarters to Amsterdam, mostly because of tax issues potentially created by Brexit.

Both companies say the decision is unlikely to have a major impact on jobs in the UK.

When Panasonic announced its move, it said “fewer than approximately 10” people would be affected out of a staff of 30.

Bank withdrawal

Several Japanese firms, including Nomura Holdings, Daiwa Securities and Sumitomo Mitsui Financial Group, have said they plan to move their main EU bases out of London.

Japanese bank Norinchukin announced earlier this month that it would set up a wholly-owned subsidiary in the Netherlands in response to Brexit and other economic changes in Europe.

Hitting the brakes

A number of Japanese carmakers have also expressed concern over the impact of a hard Brexit.

Toyota has warned that a no-deal Brexit would affect investment and would temporarily halt output at its plant in Burnaston.

Honda has already planned a six day halt in April to plan for “all possible outcomes caused by logistics and border issues”.

Santander announced plans to close 140 branches across the UK

(qlmbusinessnews.com via cityam.com – – Wed, 23rd Jan 2019) London, Uk – –

A total of 1,270 jobs are at risk after Santander announced plans to close 140 branches across the UK today.

The bank said it expects to redeploy around a third of the employees affected within the business.

A shift in customer behaviour is to blame for the closures, the lender said, after research found that the number of transactions carried out in Santander branches has fallen by 23 per cent over the last three years while digital transactions have grown by 99 per cent.

The bank plans to refurbish 100 of its remaining 614 branches over the next two years, with an investment of £55m.

Santander head of retail and business banking Susan Allen said: “The way our customers are choosing to bank with us has changed dramatically in recent years, with more and more customers using online and mobile channels. As a result, we have had to take some very difficult decisions over our less visited branches, and those where we have other branches in close proximity.

“We will support customers of closing branches to find alternative ways to bank with us that best suit their individual needs. We are also working alongside our unions to support colleagues through these changes and to find alternative roles for those impacted wherever possible.”

By Jessica Clark

EasyJet fork out £15m over Gatwick drone sightings chaos

(qlmbusinessnews.com via news.sky.com– Tue, 22nd Jan, 2019) London, Uk – –

The airline says it did its best to look after customers when drone sightings forced the runway to be shut down for 36 hours

EasyJet has said the chaos at Gatwick caused by drone sightings before Christmas cost it £15m, describing it as a “wake-up call” for UK airports.

The airline said welfare costs had topped £10m for 82,000 customers affected by 400 flight cancellations.

It added that the cost of cancelling the services and lost sales would hit first-quarter revenues by £5m.

Almost 1,000 flights in total were axed across 19 and 20 December at the start of the festive getaway.

Police blamed the closure of the airport on “numerous instances” of illegal drone activity in and around the perimeter.

Their inquiry is continuing after a couple arrested in the early stages of the investigation were released without charge.

EasyJet outlined the impact on its business in a trading statement which remained largely positive, the company saying bookings remained “encouraging” despite uncertainty over Brexit.

It reported revenues in the three months to 31 December of almost £1.3bn – a rise of 13.7% on the same period in 2017.

Passenger numbers were 15% up at 21.6 million, despite capacity being hit by the drone issue.

Chief executive Johan Lundgren said the company “did everything we could to help our customers affected by the incident”.

But he later added: “We were disappointed that it took a long time to resolve.

“You can't always protect yourself from that, but it's a wake-up call and airports will be better prepared going forward.”

The chaos did prompt other airports, including Heathrow, to re-examine their defences against drones, though there have been a number of further scares since.

Brexit remains another major risk for the airline sector.

Those with particular exposure to EU travel, including easyJet and Ryanair, have been scrambling to shield themselves from potential disruption in the event of a “no-deal” scenario clouding the current open-skies arrangement.

EasyJet said on Tuesday that it was “well prepared for Brexit. It now has 130 aircraft registered in Austria and has made good progress in ensuring it has a spare parts pool in the EU27 and in transferring crew licences, both of which will be completed by 29 March”.

It added: “Despite the consumer and economic uncertainty created by Brexit, demand currently remains solid and forward bookings for the period after 29th March are robust.”

EasyJet shares opened almost 1% lower when trading began on the London Stock Exchange.

Dixons Carphone keeping its full-year profit guidance makes small rise in revenue

(qlmbusinessnews.com via uk.reuters.com — Tue, 22nd Jan 2019) London, UK —

LONDON (Reuters) – Dixons Carphone’s (DC.L) turnaround plan has made a good start, the British retailer said on Tuesday, reporting a small rise in underlying revenue in the key Christmas period and keeping its full-year profit guidance.

The group, which trades as Currys PC World and Carphone Warehouse in Britain, reported a rise in electricals sales in its main UK business but another big fall in mobile phone sales.

Dixons Carphone has been hurt by tougher conditions in the mobile phone market as customers keep their handsets for longer.

Last December it slumped to a 440 million pound first-half loss, cut its dividend and launched a new strategy.

Under Chief Executive Alex Baldock the group plans to focus on its core electricals business while restoring its mobile business to profit by revamping its relationships with network operators. It also wants to bring its stores and online businesses closer together and develop its credit operations.

It said on Tuesday the early signs were encouraging.

Group like-for-like revenue rose 1 percent in the 10 weeks to Jan. 5 – just ahead of analysts’ average forecast for a flat outcome.

Shares in Dixons Carphone, down 26 percent over the last year, were up 1.2 percent at 0820 GMT, valuing the business at about 1.6 billion pounds.

The stock rose sharply on Monday after Sky News reported that activist investor Elliott Advisors was exploring plans to buy a “big stake” in the firm, and might want it to sell its overseas businesses which account for about 40 percent of total sales.

In Dixons Carphone’s main UK & Ireland business, electricals like-for-like sales rose 2 percent but mobile sales on the same basis fell 7 percent, reflecting a continued decline in the post-pay market.

“In UK electricals we grew sales, despite a challenging backdrop and a declining market,” said Baldock, highlighting strong performances in televisions, smart technology and gaming.

“In UK mobile, performance was as expected,” he added.

The group also trades as Elkjøp, Elgiganten and Gigantti in Nordic countries and Kotsovolos in Greece. Like-for-like sales rose 3 percent in the Nordics and jumped 19 percent in Greece.

Gross profit margins across the group were stable and it kept its guidance for a 2018-19 underlying pretax profit of around 300 million pounds, down from 382 million in 2017-18.

Reporting by James Davey